BECTON DICKINSON & COBDX
BECTON DICKINSON & CO Stock Compensation Disclosure
Share-Based Compensation
The Company grants share-based awards under the 2004 Employee and Director Equity-Based Compensation Plan (“2004 Plan”), which provides long-term incentive compensation to employees and directors consisting of: stock appreciation rights (“SARs”), performance-based restricted stock units, time-vested restricted stock units and other stock awards.
The fair value of share-based payments is recognized as compensation expense in net income. BD estimates forfeitures based on experience at the time of grant and adjusts expense to reflect actual forfeitures. The amounts and location of compensation cost relating to share-based payments included in the consolidated statements of income is as follows:
| (Millions of dollars) | 2025 | 2024 | 2023 | ||||||||||||||
| Cost of products sold | $ | 53 | $ | 51 | $ | 50 | |||||||||||
| Selling and administrative expense | 160 | 156 | 170 | ||||||||||||||
| Research and development expense | 44 | 42 | 41 | ||||||||||||||
| Integration, restructuring and transaction expense | 5 | — | — | ||||||||||||||
| Total share-based compensation cost | $ | 262 | $ | 249 | $ | 261 | |||||||||||
| Tax benefit associated with share-based compensation costs recognized | $ | 60 | $ | 58 | $ | 58 | |||||||||||
Stock Appreciation Rights
SARs represent the right to receive, upon exercise, shares of common stock having a value equal to the difference between the market price of common stock on the date of exercise and the exercise price on the date of grant. SARs generally vest over a period of four years and have a term of ten years. The fair value of awards was estimated on the date of grant using a lattice-based binomial option valuation model and these valuations were largely based upon the following weighted-average assumptions:
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk-free interest rate | 4.24% | 4.51% | 3.78% | ||||||||||||||
| Expected volatility | 21.0% | 22.0% | 21.0% | ||||||||||||||
| Expected dividend yield | 1.86% | 1.59% | 1.53% | ||||||||||||||
| Expected life | 7.0 years | 7.0 years | 7.0 years | ||||||||||||||
| Fair value derived | $54.39 | $63.05 | $57.80 | ||||||||||||||
Expected volatility is based upon historical volatility for the Company’s common stock and other factors. The expected life of SARs granted is derived from the output of the lattice-based model, using assumed exercise rates based on historical exercise and termination patterns, and represents the period of time that SARs granted are expected to be outstanding. The risk-free interest rate used is based upon the published U.S. Treasury yield curve in effect at the time of grant for instruments with a similar life. The dividend yield is based upon the most recently declared quarterly dividend as of the grant date. The Company issued 0.1 million shares during 2025 to satisfy the SARs exercised.
A summary of SARs outstanding as of September 30, 2025 and changes during the year then ended is as follows:
| SARs (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (Millions of dollars) | ||||||||||||||||||||
| Balance at October 1 | 4,995 | $ | 217.07 | ||||||||||||||||||||
| Granted | 520 | 221.60 | |||||||||||||||||||||
| Exercised | (373) | 136.19 | |||||||||||||||||||||
| Forfeited, canceled or expired | (181) | 232.87 | |||||||||||||||||||||
| Balance at September 30 | 4,961 | $ | 223.05 | 5.00 | $ | 22 | |||||||||||||||||
| Vested and expected to vest at September 30 | 4,842 | 222.83 | 4.92 | $ | 22 | ||||||||||||||||||
| Exercisable at September 30 | 3,769 | $ | 220.25 | 3.99 | $ | 22 | |||||||||||||||||
A summary of SARs exercised during 2025, 2024 and 2023 is as follows:
| (Millions of dollars) | 2025 | 2024 | 2023 | ||||||||||||||
| Total intrinsic value of SARs exercised | $ | 31 | $ | 25 | $ | 126 | |||||||||||
| Total fair value of SARs vested | $ | 30 | $ | 31 | $ | 34 | |||||||||||
Performance-Based and Time-Vested Restricted Stock Units
Performance-based restricted stock units cliff vest three years after the date of grant. These units are tied to the Company’s performance against pre-established targets over a performance period of three years. The performance measures for fiscal years 2025, 2024 and 2023 were average annual currency-neutral revenue growth and average annual return on invested capital, with the combined factor subject to adjustment based on the Company's relative total shareholder return (measures the Company’s stock performance during the performance period against that of peer companies). Under the Company’s long-term incentive program, the actual payout under these awards may vary from zero to 200% of an employee’s target payout, based on the Company’s actual performance over the performance period of three years.
Time-vested restricted stock unit awards generally vest on a graded basis over a period of three years. The related share-based compensation expense is recorded over the requisite service period, which is the vesting period or is based on retirement eligibility. The fair value of all time-vested restricted stock units is based on the market value of the Company’s stock on the date of grant.
A summary of restricted stock units outstanding as of September 30, 2025 and changes during the year then ended is as follows:
| Performance-Based | Time-Vested | |||||||||||||||||||||||||
| Stock Units (in thousands) | Weighted Average Grant Date Fair Value | Stock Units (in thousands) | Weighted Average Grant Date Fair Value | |||||||||||||||||||||||
| Balance at October 1 | 991 | $ | 229.02 | 1,693 | $ | 227.20 | ||||||||||||||||||||
| Granted | 493 | 214.38 | 1,167 | 211.46 | ||||||||||||||||||||||
| Distributed | (127) | 238.50 | (561) | 231.65 | ||||||||||||||||||||||
| Forfeited or canceled | (240) | 231.73 | (408) | 229.05 | ||||||||||||||||||||||
| Balance at September 30 | 1,117 | (a) | $ | 220.89 | 1,891 | $ | 215.75 | |||||||||||||||||||
| Expected to vest at September 30 | 393 | (b) | $ | 221.45 | 1,788 | $ | 215.80 | |||||||||||||||||||
(a)Based on 200% of target payout for performance-based restricted units.
(b)Net of expected forfeited units and units in excess of the expected performance payout of 78 thousand and 645 thousand shares, respectively.
The weighted average grant date fair value of restricted stock units granted during the years 2025, 2024 and 2023 are as follows:
| Performance-Based | Time-Vested | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| Weighted average grant date fair value of units granted | $ | 214.38 | $ | 223.60 | $ | 227.11 | $ | 211.46 | $ | 231.32 | $ | 231.58 | |||||||||||||||||||||||
The total fair value of stock units vested during 2025, 2024 and 2023 was as follows:
| Performance-Based | Time-Vested | ||||||||||||||||||||||||||||||||||
| (Millions of dollars) | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||
| Total fair value of units vested | $ | 45 | $ | 45 | $ | 28 | $ | 189 | $ | 179 | $ | 169 | |||||||||||||||||||||||
At September 30, 2025, the weighted average remaining vesting term of performance-based and time vested restricted stock units is 1.27 and 0.92 years, respectively.
Unrecognized Compensation Expense and Other Stock Plans
The amount of unrecognized compensation expense for all non-vested share-based awards as of September 30, 2025, is approximately $266 million, which is expected to be recognized over a weighted-average remaining life of approximately 1.9 years. At September 30, 2025, 8.5 million shares were authorized for future grants under the 2004 Plan. The Company has a policy of satisfying share-based payments through either open market purchases or shares held in treasury. At September 30, 2025, the Company has sufficient shares held in treasury to satisfy these payments.
As of September 30, 2025, 88 thousand shares were held in trust relative to a Director's Deferral plan, which provides a means to defer director compensation, from time to time, on a deferred stock or cash basis. Also as of September 30, 2025, 179 thousand shares were issuable under a Deferred Compensation Plan that allows certain highly-compensated employees, including executive officers, to defer salary, annual incentive awards and certain equity-based compensation.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 25, 2025 | Showing above |
| 2024 | Nov 27, 2024 | |
| 2023 | Nov 21, 2023 | |
| 2022 | Nov 22, 2022 | |
| 2021 | Nov 24, 2021 | |
| 2020 | Nov 25, 2020 | |
| 2019 | Nov 27, 2019 | |
| 2018 | Nov 21, 2018 | |
| 2017 | Nov 22, 2017 | |
| 2016 | Nov 23, 2016 | |
| 2015 | Nov 25, 2015 | |
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.