Aon plcAON

Aon plc Stock Compensation Disclosure

10-KFiled Feb 13, 20263 min read
Share-Based Compensation Plans
The following table summarizes share-based compensation expense recognized in the Consolidated Statements of Income in Compensation and benefits (in millions):
Years Ended December 31
202520242023
Restricted share units$297 $309 $283 
Performance share awards 124 155 143 
Employee share purchase plans and other11 10 12 
  Total share-based compensation expense432 474 438 
Tax benefit87 101 91 
  Share-based compensation expense, net of tax$345 $373 $347 
Restricted Share Units
RSUs generally vest between three to five years. The fair value of RSUs is based upon the market value of the Company’s class A ordinary shares at the date of grant, reduced by the present value of estimated dividends foregone during the vesting period where applicable. With certain limited exceptions, any break in continuous employment will cause the forfeiture of all non-vested awards. Compensation expense associated with RSUs is recognized on a straight-line basis over the requisite service period. Dividend equivalents are paid on certain RSUs, based on the initial grant amount.
The following table summarizes the status of the Company’s RSUs (shares in thousands, except fair value):
Shares
Fair Value (1)
Non-vested balance at December 31, 2024
2,786 $289 
Granted999 $364 
Vested(1,020)$284 
Forfeited(160)$303 
  Non-vested balance at December 31, 2025
2,605 $319 
(1)Represents per share weighted average fair value of award at date of grant.
The weighted-average grant date fair value of the Company's RSU awards granted during the years ended December 31, 2025, December 31, 2024, and December 31, 2023 was $364, $300, and $302, respectively. The fair value of RSUs that vested during 2025, 2024, and 2023 was $385 million, $332 million, and $354 million, respectively.
Unamortized deferred compensation expense amounted to $544 million as of December 31, 2025, with a remaining weighted average amortization period of approximately 2.1 years.
Performance Share Awards
The vesting of PSAs is contingent upon the achievement of certain objectives. The most significant plan is the LPP for which payout is based on a cumulative level of adjusted diluted earnings per share related performance over a three-year period. The actual issuance of shares may range from 0-200% of the target number of LPPs granted, based on the terms of the plan and level of achievement of the related performance target. The grant date fair value of LPPs is based upon the market price of the Company’s class A ordinary shares at the date of grant, reduced by the present value of estimated dividends foregone during the vesting period. The performance conditions are not considered in the determination of the grant date fair value for these awards. Compensation expense is recognized over the performance period based on management’s estimate of the number of units expected to vest. Management evaluates its estimate of the actual number of shares expected to be issued at the end of the programs on a quarterly basis. The cumulative effect of the change in estimate is recognized in the period of change as an adjustment to Compensation and benefits in the Consolidated Statements of Income, if necessary. Dividend equivalents are not paid on PSAs.
The following table summarizes the status of the Company's LPPs at 100% of the targeted amount (shares in thousands, except fair value):
Shares
Fair Value (1)
Non-vested balance at December 31, 2024
904 $309 
Granted268 $384 
Vested(285)$311 
Forfeited(24)$350 
Non-vested balance at December 31, 2025
863 $331 
(1)Represents per share weighted average fair value of award at date of grant.

The per share weighted-average grant date fair value of the Company's LPP awards granted during the years ended December 31, 2025, December 31, 2024, and December 31, 2023 was $384, $319, and $298, respectively. The payout of shares in 2025 with respect to the LPP awards granted in 2022 based on performance for the three-year performance period ended 2024 was, in aggregate, 465 thousand shares. The fair value of LPPs that vested during 2025, 2024, and 2023 was $182 million, $226 million, and $296 million, respectively.

Unamortized compensation expense, based on current performance levels, amounted to $110 million as of December 31, 2025, with a remaining weighted average amortization period of approximately 1.3 years.
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Historical Timeline

Fiscal YearFiled
2025Feb 13, 2026Showing above
2024Feb 18, 2025
2023Feb 16, 2024
2022Feb 17, 2023
2021Feb 18, 2022
2020Feb 19, 2021
2019Feb 14, 2020
2018Feb 19, 2019
2017Feb 20, 2018
2016Feb 23, 2017
2015Feb 22, 2016

About Stock Compensation Disclosures

Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.

Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.

Other Available Disclosures

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