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SHARE-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2025
Share-Based Payment Arrangement [Abstract] |
SHARE-BASED COMPENSATION | Share-based Compensation In 2023, the Company amended The Franklin Electric Co., Inc. 2017 Stock Plan, which is called The Franklin Electric Co., Inc. Amended and Restated 2017 Stock Plan ("the 2017 Amended and Restated Stock Plan") and increased the number of shares available under the Plan by 900,000 to 2,300,000. The 2017 Amended and Restated Stock Plan is a stock-based compensation plan that provides for discretionary grants of stock options, stock awards, stock unit awards, and stock appreciation rights (“SARs”) to key employees and non-employee directors. Stock options and SARs reduce the number of available shares by one share for each share subject to the option or SAR, and stock awards and stock unit awards settled in shares reduce the number of available shares by 1.5 shares for every one share delivered. The Company also maintains the Franklin Electric Co., Inc. 2012 Stock Plan (the “2012 Stock Plan”), which is a share-based compensation plan that provides for discretionary grants of stock options, stock awards and stock unit awards to key employees and non-employee directors. The 2012 Stock Plan authorized 2,400,000 shares for issuance as follows:
2012 Stock Plan |  | Authorized Shares
Stock Options |  | 1,680,000
Stock/Stock Unit Awards |  | 720,000
No additional options and awards are granted out of the 2012 Stock Plan. However, there are still unvested awards and unexercised options under this plan. The Company currently issues new shares from its common stock balance to satisfy option exercises and the settlement of stock awards and stock unit awards made under the outstanding stock plans. The Company recognizes share-based compensation expense only for the portion of shares that it expects to vest. As such, an estimated forfeiture rate is applied to calculate the share-based compensation expense, which is based on historical forfeiture data. The total share-based compensation expense recognized in 2025, 2024, and 2023 was $13.2 million, $12.1 million, and $10.1 million, respectively. The tax benefit recognized in 2025, 2024, and 2023 was $3.7 million, $5.0 million, and $5.6 million. Included in the benefit in 2025, 2024, and 2023 were excess tax benefits on share-based compensation of $0.6 million, $2.3 million, and $3.2 million, respectively. Stock Options: Under the above plans, the exercise price of each option equals the market price of the Company’s common stock on the date of grant, and the options expire 10 years after the date of the grant. Options vest at 33 percent a year and become fully vested and fully exercisable after 3 years. Vesting is accelerated upon retirement, death or disability. Subject to the terms of the plans, in general, the aggregate option exercise price and any applicable tax withholding may be satisfied in cash or its equivalent, by the plan participant’s delivery of shares of the Company’s common stock having a fair market value at the time of exercise equal to the aggregate option exercise price and/or the applicable tax withholding or by having shares otherwise subject to the award withheld by the Company or via cashless exercise through a broker-dealer. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model with a single approach and amortized using a straight-line attribution method over the option’s vesting period. Options granted to retirement eligible employees are immediately expensed. The Company uses historical data to estimate the expected volatility of its stock, the weighted average expected life, the period of time options granted are expected to be outstanding, and its dividend yield. The risk-free rates for periods within the contractual life of the option are based on the U.S. Treasury yield curve in effect at the time of the grant. The table below provides the weighted average grant-date fair values and key assumptions used for the Black-Scholes model to determine the fair value of options granted during 2025, 2024, and 2023:
|  | 2025 |  | 2024 |  | 2023
Risk-free interest rate |  | 4.39 | % |  | 4.38 | % |  | 4.02 | %
Dividend yield |  | 1.00 | % |  | 1.03 | % |  | 0.95 | %
Volatility factor |  | 32.50 | % |  | 33.01 | % |  | 33.81 | %
Expected term |  | 6.0 years |  | 6.0 years |  | 6.0 years
Weighted average grant-date fair value of options |  | $ | 38.08 |  |  | $ | 35.03 |  |  | $ | 34.51 |
A summary of the Company’s outstanding stock option activity and related information is as follows:
(Shares in thousands) |  | Shares |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term |  | Aggregate Intrinsic Value (000’s)
Stock Options |  |  |  |
Outstanding at beginning of 2025 |  | 861 |  |  | $ | 66.15 |  |  |  |  |
Granted |  | 63 |  |  | 106.00 |  |  |  |  |
Exercised |  | (93) |  |  | 57.48 |  |  |  |  |
Forfeited |  | (5) |  |  | 102.01 |  |  |  |  |
Expired |  | (15) |  |  | 96.71 |  |  |  |  |
Outstanding at end of 2025 |  | 811 |  |  | $ | 69.44 |  |  | 4.60 years |  | $ | 21,974 |
Expected to vest after applying forfeiture rate |  | 808 |  |  | $ | 69.32 |  |  | 4.59 years |  | $ | 21,972 |
Vested and exercisable at end of period |  | 695 |  |  | $ | 64.18 |  |  | 3.93 years |  | $ | 21,927 |
(In millions) |  | 2025 |  | 2024 |  | 2023
Intrinsic value of options exercised |  | $ | 3.6 |  |  | $ | 8.8 |  |  | $ | 11.6 |
Cash received from the exercise of options |  | 5.3 |  |  | 7.2 |  |  | 9.2 |
Fair value of shares vested |  | 4.2 |  |  | 2.5 |  |  | 3.1 |
Tax benefit of options exercised |  | 0.6 |  |  | 1.8 |  |  | 2.9 |
As of December 31, 2025, there was $2.1 million of total unrecognized compensation cost related to non-vested stock options granted under the stock plans. That cost is expected to be recognized over a weighted-average period of 1.63 years. Stock/Stock Unit Awards: Under the 2017 Stock Plan, non-employee directors and employees may be granted stock awards and stock units. Stock awards to non-employee directors are generally fully vested when made. Stock/stock unit awards to employees cliff vest over 3 years (subject to accelerated vesting of a pro rata portion in the case of retirement, death or disability) and may be contingent on the attainment of certain performance goals, which are based on specified growth objectives measured relative to an established market benchmark. Dividends are paid to the recipient prior to vesting, except that dividends on performance-based stock awards under the 2012 Stock Plan and the 2017 Stock Plan will be paid only to the extent the performance goals are met. Stock/stock unit awards granted to retirement eligible employees are expensed over the vesting period. Compensation cost for the performance stock/stock unit awards is accrued based on the probable outcome of specified performance conditions. A summary of the Company’s restricted stock/stock unit award activity and related information is as follows:
(Shares in thousands) |  | Shares |  | Weighted-Average Grant- Date Fair Value
Restricted Stock/Stock Unit Awards |  |
Non-vested at beginning of 2025 |  | 314 |  |  | $ | 92.83 |
Awarded |  | 120 |  |  | 101.28 |
Vested |  | (98) |  |  | 84.89 |
Forfeited |  | (23) |  |  | 96.50 |
Non-vested at end of 2025 |  | 313 |  |  | $ | 98.28 |
The weighted-average grant date fair value of restricted stock/stock unit awards granted in 2025, 2024, and 2023, is $101.28, $93.97, and $87.31, respectively. The fair value of restricted stock/stock unit awards that vested in 2025, 2024, and 2023, was $8.3 million, $7.9 million, and $8 million, respectively. As of December 31, 2025, there was $11.1 million of total unrecognized compensation cost related to non-vested stock/stock unit awards granted under the stock plans. That cost is expected to be recognized over a weighted-average period of 1.22 years.

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