Bausch Health Companies Inc.BHC
Bausch Health Companies Inc. Stock Compensation Disclosure
SHARE-BASED COMPENSATION
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”).
Approximately 25,890,000 common shares were available for future grants as of December 31, 2025. The Company uses reserved and unissued common shares to satisfy its obligations under its share-based compensation plans.
Bausch Health’s Long-Term Incentive Plan
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.
The following table summarizes the components and classification of the Company’s share-based compensation expense related to stock options and RSUs for the years 2025, 2024 and 2023:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Stock options | $ | 15 | $ | 13 | $ | 17 | ||||||||||||||
| RSUs | 201 | 137 | 115 | |||||||||||||||||
| Share-based compensation expense | $ | 216 | $ | 150 | $ | 132 | ||||||||||||||
| Research and development expenses | $ | 13 | $ | 11 | $ | 11 | ||||||||||||||
| Selling, general and administrative expenses | 203 | 139 | 121 | |||||||||||||||||
| Share-based compensation expense | $ | 216 | $ | 150 | $ | 132 | ||||||||||||||
Stock Options
Stock options granted under the 2011 Plan and the Amended and Restated 2014 Plan generally expire on th anniversary of the grant date. The exercise price of any stock option granted under the 2011 Plan and the Amended and Restated 2014 Plan will not be less than the closing price per common share on the date of grant. Stock options generally vest 33% each year over a three-year period, on the anniversary of the date of grant.
There were no stock options granted in 2025 and 2024. The fair values of all stock options granted in 2023 were estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
| 2023 | ||||||||
| Expected stock option life (years) | 3.0 | |||||||
| Expected volatility | 76.1 | % | ||||||
| Risk-free interest rate | 4.8 | % | ||||||
| Expected dividend yield | — | % | ||||||
The expected stock option life was determined based on historical exercise and forfeiture patterns. The expected volatility was determined based on implied volatility in the market traded options of the Company’s common stock. The risk-free interest rate was determined based on the rate at the time of grant for zero-coupon U.S. government bonds with maturity dates equal to the expected life of the stock option. The expected dividend yield was determined based on the stock option’s exercise price and expected annual dividend rate at the time of grant.
The Black-Scholes option-pricing model used by the Company to calculate stock option values was developed to estimate the fair value of freely tradeable, fully transferable stock options without vesting restrictions, which significantly differ from the Company’s stock option awards. This model also requires highly subjective assumptions, including future stock price volatility and expected time until exercise, which greatly affect the calculated values.
The following table summarizes stock option activity during 2025:
| (in millions, except per share amounts) | Options | Weighted- Average Exercise Price Per Share | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||||
Outstanding, January 1, 2025 | 8.1 | $ | 22.96 | |||||||||||||||||||||||
| Expired or forfeited | (2.7) | $ | 24.89 | |||||||||||||||||||||||
Outstanding, December 31, 2025 | 5.4 | $ | 21.96 | 4.3 | $ | — | ||||||||||||||||||||
Vested and expected to vest, December 31, 2025 | 5.3 | $ | 22.03 | 4.2 | $ | — | ||||||||||||||||||||
Vested and exercisable, December 31, 2025 | 5.1 | $ | 22.43 | 4.2 | $ | — | ||||||||||||||||||||
The weighted-average fair values of all stock options granted in 2023 were $4.87. No stock options were exercised in 2025, 2024 and 2023.
As of December 31, 2025, the total remaining unrecognized compensation expense related to non-vested stock options amount to less than $1 million, which will be amortized over the weighted-average remaining requisite service period of approximately 0.2 years.
RSUs
RSUs generally vest 33% a year over a three-year period. Annual RSUs granted to non-management directors vest immediately prior to the next Annual Meeting of Shareholders. Pursuant to the applicable RSU agreement, certain RSUs may be subject to the attainment of any applicable performance goals specified by the Board of Directors. If the vesting of the RSUs is conditional upon the attainment of performance goals, any RSUs that do not vest as a result of a determination that the prescribed performance goals failed to be attained will be forfeited immediately upon such determination. RSUs are credited with dividend equivalents, in the form of additional RSUs, when dividends are paid on the Company’s common shares. Such additional RSUs will have the same vesting dates and will vest under the same terms as the RSUs in respect of which such additional RSUs are credited.
To the extent provided for in a RSU agreement, the Company may, in lieu of all or a portion of the common shares which would otherwise be provided to a holder, elect to pay a cash amount equivalent to the market price of the Company’s common shares on the vesting date for each vested RSU. The amount of cash payment will be determined based on the average market price of the Company’s common shares on the vesting date. The Company’s current intent is to settle vested RSUs through the issuance of common shares.
Time-Based RSUs
Each vested time-based RSU represents the right of a holder to receive one of the Company’s common shares. The fair value of each RSU granted is estimated based on the trading price of the Company’s common shares on the date of grant.
The following table summarizes non-vested time-based RSU activity during 2025:
| (in millions, except per share amounts) | Time-Based RSUs | Weighted- Average Grant-Date Fair Value Per Share | ||||||||||||
Non-vested, January 1, 2025 | 8.1 | $ | 9.34 | |||||||||||
| Granted | 6.3 | $ | 7.40 | |||||||||||
| Vested | (4.2) | $ | 9.59 | |||||||||||
| Forfeited | (1.0) | $ | 7.79 | |||||||||||
Non-vested, December 31, 2025 | 9.2 | $ | 8.05 | |||||||||||
As of December 31, 2025, the total remaining unrecognized compensation expense related to non-vested time-based RSUs amounted to $33 million, which will be amortized over the weighted-average remaining requisite service period of approximately 1.6 years. The total fair value of time-based RSUs vested in 2025, 2024 and 2023 were $40 million, $55 million and $74 million, respectively.
Performance-Based RSUs
Each vested performance-based RSU represents the right of a holder to receive a number of the Company’s common shares up to a specified maximum. Performance-based RSUs vest upon the attainment of certain performance targets and the achievement of certain share price appreciation conditions. If the Company’s performance is below a specified performance level, no common shares will be paid.
The fair value of each Adjusted Operating Cash Flow performance-based RSU granted during 2025, 2024 and 2023 respectively, was estimated using a Monte Carlo Simulation model, which utilizes multiple input variables to estimate the probability that the performance condition will be achieved. Expense recognized for the performance-based RSUs in each reporting period reflects the Company’s latest estimate of the number of performance-based RSUs that are expected to vest. If the performance-based RSUs do not ultimately vest due to the targets not being met, no compensation expense is recognized and any previously recognized compensation expense is reversed.
The fair values of performance-based RSUs granted during 2025, 2024 and 2023 were estimated with the following assumptions:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Contractual term (years) | 2.2 | 3.0 | 3.0 | |||||||||||||||||
| Expected Company share volatility | 64% | 64% | 76% | |||||||||||||||||
| Risk-free interest rate | 4% | 4% | 5% | |||||||||||||||||
The expected company share volatility was determined based on implied volatility in the market traded options of the Company’s common stock. The risk-free interest rate was determined based on the rate at the time of grant for zero-coupon U.S. government bonds with maturity dates equal to the contractual term of the performance-based RSUs.
The following table summarizes non-vested performance-based RSU activity during 2025:
| (in millions, except per share amounts) | Performance-based RSUs | Weighted- Average Grant-Date Fair Value Per Share | ||||||||||||
Non-vested, January 1, 2025 | 1.9 | $ | 9.87 | |||||||||||
| Granted | 2.0 | $ | 7.36 | |||||||||||
| Vested | — | $ | — | |||||||||||
| Forfeited | (0.1) | $ | 8.46 | |||||||||||
Non-vested, December 31, 2025 | 3.8 | $ | 8.51 | |||||||||||
As of December 31, 2025, the total remaining unrecognized compensation expense related to non-vested performance-based RSUs amounted to $24 million, which will be amortized over the weighted-average remaining requisite service period of approximately 1.4 years. A maximum of approximately 6,606,000 common shares could be issued upon vesting of the performance-based RSUs outstanding as of December 31, 2025.
Bausch Health 2025 Employee Stock Purchase Plan
On May 13, 2025, the shareholders of the Company approved the Bausch Health Companies Inc. 2025 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides eligible employees with an opportunity to purchase common shares from the Company at a discount through accumulated payroll deductions. The ESPP will be implemented through a series of offering periods to eligible employees. Under the ESPP, the offering periods will have a duration of six months commencing on June 1 or December 1 and ending on November 30 or May 31, respectively. The purchase price will be specified pursuant to the offering, but cannot, under the terms of the ESPP, be less than 85% of the lower of the fair market value per common share on either the grant date or the purchase date.
The first offering period to purchase common shares under the ESPP is December 1, 2025 through May 31, 2026. The fair value of all ESPP awards expected to be granted for the period December 1, 2025 through May 31, 2026 was less than $1 million and was estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
| Expected term (years) | 0.5 | |||||||
| Expected volatility | 54.7 | % | ||||||
| Risk-free interest rate | 3.7 | % | ||||||
| Expected dividend yield | — | % | ||||||
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 13,800,000 Bausch + Lomb common shares were available for future grants as of December 31, 2025 under the B+L Plan. Bausch + Lomb uses reserved and unissued common shares to satisfy its obligations under its share-based compensation plans.
In July 2025, the Talent and Compensation Committee of Bausch + Lomb approved certain amendments to the employment agreement by and between Brent Saunders, Chief Executive Officer (the “B+L CEO”) and Chair of the Board of Directors of Bausch + Lomb, and Bausch + Lomb, dated as of February 14, 2023, and the award agreement underlying certain performance stock units previously granted to Mr. Saunders in connection with his appointment as the B+L CEO (the “New Hire PSUs”). The amendments to the New Hire PSUs provided that the New Hire PSUs will now vest and payout between 120% - 330% of the target award on February 23, 2029 (the “New Performance End Date”), based on the level of achievement of (x) specified share-price hurdle goals ranging from $26.57 per share to $39.06 per share measured as of the New Performance End Date and (y) a new cumulative Adjusted EBITDA performance modifier goal for Bausch + Lomb’s 2025 - 2028 fiscal years measured against specified cumulative targets (which modifies the payout between a range of -40% to +40% of the payout level under the share-price hurdle performance goal, subject to Mr. Saunders’ continued employment through the New Performance End Date (subject to certain exceptions).
Stock Options
Stock options granted under the B+L Plan generally expire on the th anniversary of the grant date. The exercise price of any stock option granted under the B+L Plan will not be less than the closing price per common share on the date of grant. Stock options generally vest 33% each year over a three-year period, on the anniversary of the date of grant.
The fair values of all stock options granted under the Bausch + Lomb Plan for the years 2025, 2024 and 2023 were estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Expected stock option life (years) | 3.0 | 3.0 | 3.0 | |||||||||||||||||
| Expected volatility | 36.8 | % | 35.1 | % | 35.3 | % | ||||||||||||||
| Risk-free interest rate | 3.8 | % | 4.5 | % | 4.6 | % | ||||||||||||||
| Expected dividend yield | — | % | — | % | — | % | ||||||||||||||
The expected stock option life was determined based on historical exercise and forfeiture patterns associated with historical stock options granted to Bausch + Lomb employees under the Company’s long-term incentive plan. The expected volatility was determined based on implied and historical volatility of Bausch + Lomb’s selected peer companies. Bausch + Lomb will continue to leverage the Company’s historical stock option experience and peer company data until it has sufficient experience with its own equity awards and market data. The risk-free interest rate was determined based on the rate at the time of grant for zero-coupon U.S. government bonds with maturity dates equal to the expected life of the stock option. The expected dividend yield was determined based on the stock option’s exercise price and expected Bausch + Lomb annual dividend rate at the time of grant.
The Black-Scholes option-pricing model used by the Company to calculate stock option values was developed to estimate the fair value of freely tradable, fully transferable stock options without vesting restrictions, which significantly differ from Bausch + Lomb’s stock option awards. This model also requires highly subjective assumptions, including future stock price volatility and expected time until exercise, which greatly affect the calculated values.
The following table summarizes stock option activity under Bausch + Lomb’s Plan during 2025:
| (in millions, except per share amounts) | Options | Weighted- Average Exercise Price Per Share | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||||
Outstanding, January 1, 2025 | 9.0 | $ | 17.90 | |||||||||||||||||||||||
| Granted | 1.4 | $ | 15.86 | |||||||||||||||||||||||
| Expired or forfeited | (0.4) | $ | 18.00 | |||||||||||||||||||||||
Outstanding, December 31, 2025 | 10.0 | $ | 17.62 | 6.3 | $ | 2.0 | ||||||||||||||||||||
Vested and expected to vest, December 31, 2025 | 9.6 | $ | 17.62 | 6.2 | $ | 1.9 | ||||||||||||||||||||
Vested and exercisable, December 31, 2025 | 4.2 | $ | 17.97 | 4.7 | $ | 0.1 | ||||||||||||||||||||
The weighted-average fair values of stock options granted to Bausch + Lomb employees in 2025, 2024 and 2023 were $4.66, $4.94 and $5.33, respectively. There were no stock options exercised in 2025 and 2023. The stock options exercised in 2024 were not material.
As of December 31, 2025, the total remaining unrecognized compensation expense related to non-vested stock options amounted to $8 million, which will be amortized over the weighted-average remaining requisite service period of approximately 1.1 years.
Time-Based RSUs
RSUs under the Bausch + Lomb Corporation Plan generally vest 33% a year over a three-year period with the exception of the RSUs granted pursuant to the IPO Founder Grants and the RSUs granted to B+L’s Chief Executive Officer in connection with his appointment, which vest in two equal installments, such that 50% vest on the second anniversary and 50% vest on the third anniversary of the grant date. RSUs are credited with dividend equivalents, in the form of additional RSUs, when dividends are paid on Bausch + Lomb’s common shares. Such additional RSUs will have the same vesting dates and will vest under the same terms as the RSUs in respect of which such additional RSUs are credited.
To the extent provided for in a RSU agreement, Bausch + Lomb may, in lieu of all or a portion of the common shares which would otherwise be provided to a holder, elect to pay a cash amount equivalent to the market price of Bausch + Lomb’s common shares on the vesting date for each vested RSU. The amount of cash payment will be determined based on the average market price of Bausch + Lomb’s common shares on the vesting date. Bausch + Lomb’s current intent is to settle vested RSUs through the issuance of common shares.
Each vested RSU represents the right of a holder to receive one of Bausch + Lomb’s common shares. The fair value of each RSU granted is estimated based on the trading price of Bausch + Lomb’s common shares on the date of grant.
The following table summarizes non-vested RSU activity under Bausch + Lomb’s Plan during 2025:
| (in millions, except per share amounts) | RSUs | Weighted-Average Grant-Date Fair Value Per Share | ||||||||||||
Non-vested, January 1, 2025 | 6.2 | $ | 16.89 | |||||||||||
| Granted | 4.0 | $ | 15.47 | |||||||||||
| Vested | (2.7) | $ | 17.04 | |||||||||||
| Forfeited | (0.7) | $ | 15.98 | |||||||||||
Non-vested, December 31, 2025 | 6.8 | $ | 16.08 | |||||||||||
As of December 31, 2025, the total remaining unrecognized compensation expense related to non-vested RSUs amounted to $48 million, which will be amortized over the weighted-average remaining requisite service period of approximately 1.4 years. The total fair value of RSUs vested in 2025, 2024 and 2023 was $47 million, $41 million and $27 million, respectively.
Performance-Based RSUs
Each vested PSU represents the right of a holder to receive a number of Bausch + Lomb’s common shares up to a specified maximum. The performance-based PSUs are comprised of awards that vest upon: (i) achievement of certain share price appreciation conditions, including absolute and relative total shareholder return, (ii) attainment of certain performance targets that are based on Bausch + Lomb’s Organic Revenue Growth and (iii) level of achievement of: (a) a revenue metric and (b) a relative TSR metric (if applicable). If Bausch + Lomb’s performance is below a specified performance level, no common shares will be paid. The maximum level of achievement of the performance goals is 200% - 300% of the target.
The fair value of the TSR PSUs granted during 2025, 2024 and 2023 and the OPG PSUs granted during 2025 and 2024 were estimated using a Monte Carlo Simulation model, which utilizes multiple input variables to estimate the probability that the performance condition will be achieved. The fair value of the Organic Revenue Growth PSUs is estimated based on the trading price of Bausch + Lomb’s common shares on the date of grant. Expense recognized for the Organic Revenue Growth PSUs in each reporting period reflects Bausch + Lomb’s latest estimate of Organic Revenue Growth in determining the number of PSUs that are expected to vest. Expense recognized for the OPG PSUs in each reporting period reflects the latest probability of Bausch + Lomb’s achieving certain revenue targets in determining the number of PSUs that are expected to vest. If the Organic Revenue Growth PSUs do not ultimately vest due to the Organic Revenue Growth not being met and/or the OPG PSUs do not ultimately vest due to certain revenue targets not being met, no compensation expense is recognized and any previously recognized compensation expense is reversed.
The fair values of TSR PSUs and OPG PSUs granted during 2025, 2024 and 2023 were estimated with the following assumptions:
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Contractual term (years) | 3.0 | 3.0 | 3.6 | |||||||||||||||||||||||
| Expected volatility | 36.7% | 35.1% | 35.4% | |||||||||||||||||||||||
| Risk-free interest rate | 3.8% | 4.5% | 4.5% | |||||||||||||||||||||||
The expected volatility was determined based on implied and historical volatility of Bausch + Lomb’s selected peer companies. The risk-free interest rate was determined based on the rate at the time of grant for zero-coupon U.S. government bonds with maturity dates equal to the contractual terms of the TSR PSU and OPG PSU.
The following table summarizes the performance-based PSU activity during 2025:
| (in millions, except per share amounts) | Performance-based RSUs | Weighted-Average Grant-Date Fair Value Per Share | ||||||||||||
Non-vested, January 1, 2025 | 4.1 | $ | 20.61 | |||||||||||
| Granted | 1.2 | $ | 15.90 | |||||||||||
| Forfeited | (0.2) | $ | 16.59 | |||||||||||
Non-vested, December 31, 2025 | 5.1 | $ | 19.67 | |||||||||||
During 2025, Bausch + Lomb granted approximately 1,166,000 performance-based RSUs, consisting of: (i) approximately 753,000 Organic Revenue Growth PSUs with a weighted-average grant date fair value of $15.98 per RSU, (ii) approximately 388,000 TSR PSUs with an average grant date fair value of $15.86 per RSU and (iii) approximately 25,000 OPG PSUs with a weighted-average grant date fair value of $14.06 per RSU.
As of December 31, 2025, the total remaining unrecognized compensation expense related to non-vested performance-based RSUs amounted to $79 million, which will be amortized over the weighted-average remaining requisite service period of approximately 1.8 years. A maximum of approximately 11,900,000 common shares could be issued upon vesting of the performance-based RSUs outstanding as of December 31, 2025. There were no performance-based RSUs that vested during 2025, 2024 and 2023.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 19, 2020 | |
| 2018 | Feb 20, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Apr 29, 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.