XML 29 R17.htm IDEA: XBRL DOCUMENT v3.25.2
Stock-Based Compensation
 9 Months Ended
Jun. 30, 2025
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation
Note 9 — Stock-Based Compensation
Stock-Based Compensation Expense
Total stock-based compensation expense for the three and nine months ended June 30, 2025 and 2024 and the respective income tax benefits recognized by the Company in the Condensed Consolidated Statements of Income are as follows:
 Three months ended June 30,Nine months ended June 30,
2025202420252024
Cost of products sold$0.7 $0.6 $1.9 $2.6 
Selling and administrative expense5.1 5.3 17.2 16.1 
Research and development expense0.1 0.6 0.3 1.7 
Other operating expense— — 2.8 — 
Total Stock-Based Compensation Expense$5.9 $6.5 $22.2 $20.4 
Tax benefit associated with stock-based compensation costs recognized$0.9 $0.6 $3.1 $1.8 
The following table summarizes the Company's total stock-based compensation expense by classification of award for the three and nine months ended June 30, 2025 and 2024:
Three months ended June 30,Nine Months Ended June 30,
2025202420252024
Equity Awards$5.9 $6.3 $22.1 $20.1 
Liability Awards— 0.2 0.1 0.3 
Total$5.9 $6.5 $22.2 $20.4 
The following table summarizes the Company's total stock-based compensation expense by award type for the three and nine months ended June 30, 2025 and 2024:
Three months ended June 30,Nine Months Ended June 30,
2025202420252024
Time-Vested Restricted Stock Units (TVUs)
$5.1 $4.8 $16.9 $15.4 
Performance-Based Restricted Stock Units (PSUs)
0.5 0.7 3.8 2.0 
Stock Appreciation Rights (SARs)
0.3 1.0 1.5 3.0 
Total$5.9 $6.5 $22.2 $20.4 
Time Vested Restricted Stock Units ("TVUs")
During the nine months ended June 30, 2025, Embecta granted 1,576,493 restricted stock units ("RSUs") in the form of TVUs to employees. TVUs vest on a graded basis over a period of three years. The related stock-based compensation expense is recorded over the requisite service period, which is the vesting period or is based on retirement eligibility. These awards accumulate dividend equivalents, which are provided as additional units and are subject to the same vesting requirements as the underlying grant.
A summary of TVUs outstanding as of June 30, 2025 and changes during the nine months ended June 30, 2025 are as follows:
TVUs (in thousands)Weighted Average Grant Date Fair Value
Nonvested at October 11,918.0 $21.34 
Granted*1,576.5 18.53 
Distributed**(1,085.4)22.48 
Forfeited, canceled or expired(326.0)18.86 
Nonvested at June 302,083.1 $18.93 
Expected to vest at June 301,974.9 $18.98 
*Includes accumulated nonvested dividend equivalents
**The TVUs distributed include shares withheld for taxes that are not formally issued to the market.
The weighted average grant date fair value of TVUs granted during the nine months ended June 30, 2025 is $18.53 and the total fair value of TVUs vested during the nine months ended June 30, 2025 is $25.1 million.
At June 30, 2025, the weighted average remaining vesting term of TVUs is 1.8 years.
Performance Based Restricted Stock Units ("PSUs")
During the nine months ended June 30, 2025, Embecta awarded 538,031 RSUs in the form of PSUs to certain executive officers and employees which cliff vest after three years, subject to continued employment of the recipients and the achievement of certain performance metric targets. The Company has identified certain performance metrics associated with these awards and certain targets will be fully established at a future date. The Company has determined that the service inception date precedes the grant date for these awards as (a) the awards were authorized prior to establishing an accounting grant date, (b) the recipients began providing services prior to the grant date, and (c) there are performance conditions that, if not met by the accounting grant date, will result in the forfeiture of the awards. As the service inception date precedes the accounting grant date, the Company recognizes stock-based compensation expense for each separately-vesting tranche over the requisite service period based on the fair value at each reporting date. The requisite service period is equal to the vesting period or is based on retirement eligibility. These awards accumulate dividend equivalents, which are provided as additional units and are subject to the same vesting requirements as the underlying grant. As of June 30, 2025, there were 945,269 RSUs in the form of PSUs that have been awarded, inclusive of accumulated dividend equivalents, for which a grant date has not yet been established.
A summary of PSUs outstanding as of June 30, 2025 and changes during the nine months ended June 30, 2025 are as follows:
Stock Units (in thousands)Weighted Average Grant Date Fair Value
Nonvested at October 156.7 $30.24 
Granted*216.1 18.17 
Distributed
(47.6)18.76 
Forfeited, canceled or expired(6.2)18.96 
Nonvested at June 30219.0 $21.52 
Expected to vest at June 30219.0 $21.52 
*Includes accumulated nonvested dividend equivalents
At June 30, 2025, the weighted average remaining vesting term of PSUs is 0.4 years.
Stock Appreciation Rights
A summary of stock appreciation rights ("SARs") outstanding as of June 30, 2025 and changes during the nine months ended June 30, 2025 are as follows:
SARs (in thousands)Weighted Average Exercise PriceWeighted Average Remaining Contractual Term (Years)Aggregate Intrinsic Value
Balance at October 11,760.4 $29.11 
Exercised*(3.4)13.30 
Forfeited, canceled or expired(250.0)29.19 
Balance at June 301,507.0 $29.14 6.0$— 
Vested and expected to vest at June 301,497.9 29.14 6.0$— 
Exercisable at June 301,341.6 $29.16 5.9$— 
*The amounts exercised include shares withheld for taxes that are not formally issued to the market.
3,400 SARs were exercised during the nine months ended June 30, 2025.
Unrecognized Stock-Based Compensation Expense and Other Stock Plans
The amount of unrecognized compensation expense for all non-vested stock-based awards granted as of June 30, 2025, is approximately $30.9 million which is expected to be recognized over a weighted-average remaining life of approximately 1.9 years. At June 30, 2025, 3.3 million shares were authorized for future grants under the Company's 2022 Employee and Director Equity Based Compensation Plan, as amended.