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SHARE-BASED COMPENSATION | 3 Months Ended
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Mar. 31, 2025
Share-Based Payment Arrangement [Abstract] |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Bausch Health’s Long-Term Incentive Plan In May 2014, shareholders approved Bausch Health’s 2014 Omnibus Incentive Plan (the “2014 Plan”) which has been amended from time to time to, among other things, increase the number of common shares authorized for issuance under the 2014 Plan. Effective May 14, 2024, Bausch Health further amended and restated the 2014 Plan, as subsequently amended and restated (the “Amended and Restated 2014 Plan”). Such amendment and restatement increased the number of common shares authorized for issuance under the Amended and Restated 2014 Plan by an additional 20,000,000 common shares. Approximately 24,603,000 common shares were available for future grants as of March 31, 2025. The Company uses reserved and unissued common shares to satisfy its obligations under its share-based compensation plans. Bausch Health has a long-term incentive program with the objective of aligning the share-based awards granted to senior management with the Company’s focus on generating operating cash flow while maintaining focus on improving total shareholder return (“TSR”) over the long-term. The share-based awards granted under this long-term incentive program may consist of time-based stock options, time-based restricted stock units (“RSUs”) and performance-based RSUs. Performance-based RSUs are comprised of awards that vest upon the attainment of certain targets that are based on the Company’s adjusted operating cash flow (“Adjusted Operating Cash Flow”) with a TSR modifier. Bausch + Lomb Long-Term Incentive Plan Prior to May 5, 2022, Bausch + Lomb participated in Bausch Health’s long-term incentive program. Effective May 5, 2022, Bausch + Lomb established the Bausch + Lomb Corporation 2022 Omnibus Incentive Plan (as subsequently amended and restated, the “B+L Plan”) and a total of 28,000,000 common shares of Bausch + Lomb were originally authorized for issuance under the B+L Plan. The B+L Plan was amended and restated effective April 24, 2023, and further amended and restated on May 29, 2024, to increase the number of shares authorized for issuance thereunder, resulting in an aggregate 52,000,000 common shares of Bausch + Lomb authorized for issuance under the B+L Plan. The B+L Plan provides for the grant of various types of awards including RSUs, restricted stock, stock appreciation rights, stock options, performance-based awards and cash awards. Under the B+L Plan, the exercise price of awards, if any, is set on the grant date and may not be less than the fair market value per share on that date. Generally, stock options have a term of ten years and a three-year vesting period, subject to limited exceptions. Share-based awards granted to senior management align with Bausch + Lomb’s focus on enhancing its revenue growth while maintaining focus on total shareholder return over the long-term. The share-based awards granted under this long-term incentive program consist of time-based stock options, time-based RSUs and performance-based RSUs (“PSUs”). The PSUs are comprised of awards that vest upon: (i) achievement of certain share price appreciation conditions, including absolute and relative TSR (the “TSR PSUs”), (ii) attainment of certain performance targets that are based on Bausch + Lomb’s Organic Revenue Growth (the “Organic Revenue Growth PSUs”) and (iii) outperformance of performance goals, based on the level of achievement of: (a) a revenue metric (measured for fiscal year 2026) and (b) relative TSR metric (if applicable) (“OPG PSU”). If Bausch + Lomb’s performance is below a specified performance level, no common shares will be paid. Each vested PSU represents the right of a holder to receive a number of Bausch + Lomb’s common shares up to a specified maximum. Approximately 13,300,000 Bausch + Lomb common shares were available for future grants as of March 31, 2025. Bausch + Lomb uses reserved and unissued common shares to satisfy its obligations under its share-based compensation plans. The following table summarizes the components and classification of the Company’s share-based compensation expenses related to stock options and RSUs for the three months ended March 31, 2025 and 2024:
|  | Three Months Ended March 31, |  |
(in millions) |  | 2025 |  | 2024 |  |  |  |
Stock options |  | $ | 4 |  |  | $ | 3 |  |  |  |  |
RSUs |  | 39 |  |  | 30 |  |  |  |  |
|  | $ | 43 |  |  | $ | 33 |  |  |  |  |
Research and development expenses |  | $ | 3 |  |  | $ | 3 |  |  |  |  |
Selling, general and administrative expenses |  | 40 |  |  | 30 |  |  |  |  |
|  | $ | 43 |  |  | $ | 33 |  |  |  |  |
Share-based awards granted for the three months ended March 31, 2025 and 2024 consist of:
| Three Months Ended March 31,
| 2025 |  | 2024
Bausch Health Share-Based Awards |  |  |
Time-based RSUs |  |  |
Granted | 5,379,000 |  |  | 4,246,000 |
Weighted-average grant date fair value | $ | 7.70 |  |  | $ | 9.39 |
Adjusted Operating Cash Flow performance-based RSUs |  |  |
Granted | 2,096,000 |  |  | 1,232,000 |
Weighted-average grant date fair value | $ | 7.36 |  |  | $ | 9.89 |
Bausch + Lomb Share-Based Awards |  |  |
Stock options |  |  |
Granted | 1,374,000 |  |  | 1,317,000 |
Weighted-average exercise price | $ | 15.86 |  |  | $ | 16.85 |
Weighted-average grant date fair value | $ | 4.66 |  |  | $ | 4.92 |
RSUs |  |  |
Granted | 3,033,000 |  |  | 2,967,000 |
Weighted-average grant date fair value | $ | 15.95 |  |  | $ | 16.84 |
TSR PSUs |  |  |
Granted | 388,000 |  |  | 826,000 |
Weighted-average grant date fair value | $ | 15.86 |  |  | $ | 21.21 |
Organic Revenue Growth PSUs |  |  |
Granted | 753,000 |  |  | 379,000 |
Weighted-average grant date fair value | $ | 15.98 |  |  | $ | 16.08 |
OPG PSU |  |  |
Granted | — |  |  | 1,758,000 |
Weighted-average grant date fair value | $ | — |  |  | $ | 17.04 |
As of March 31, 2025, the remaining unrecognized compensation expense related to all outstanding non-vested stock options, time-based RSUs and performance-based RSUs under the Company’s 2014 Plan and the B+L Plan amounted to $276 million, which will be amortized over a weighted-average period of 1.87 years. As of March 31, 2025, the remaining unrecognized compensation expense related to all outstanding non-vested stock options, time-based RSUs and PSUs under the B+L Plan amounted to $181 million, which will be amortized over a weighted-average period of 1.86 years.

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