ECOLAB INC. Stock Compensation Disclosure

11. EQUITY COMPENSATION PLANS

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The Company’s equity compensation plans provide for grants of stock options, performance-based restricted stock units (“PBRSUs”) and non-performance-based restricted stock units (“RSUs”) and restricted stock awards (“RSAs”). Common shares available for grant as of December 31, 2025, 2024 and 2023 were 17,081,775, 18,052,830 and 18,840,265, respectively. The Company generally issues authorized but previously unissued shares to satisfy stock option exercises and stock award vesting.

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The Company’s annual long-term incentive share-based compensation program is made up of 40% stock options and 60% PBRSUs for 2025, 2024 and 2023. The Company also periodically grants RSUs. Total compensation expense related to all share-based compensation plans was $136.6 million, $134.8 million and $95.1 million for 2025, 2024 and 2023, respectively. As of December 31, 2025, there was $196.3 million of total measured but unrecognized compensation expense related to non-vested share-based compensation arrangements granted under all of the Company’s plans. That cost is expected to be recognized over a weighted-average period of 2.0 years.

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Stock Options

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Stock options are granted to purchase shares of the Company’s stock at the average daily share price on the date of grant. These options generally expire within ten years from the grant date. The Company generally recognizes compensation expense for these awards on a straight-line basis over the three year vesting period. Stock option grants to retirement eligible recipients are attributed to expense using the non-substantive vesting method.

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A summary of stock option activity and average exercise prices is as follows:

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The total aggregate intrinsic value of options (the amount by which the stock price exceeded the exercise price of the option on the date of exercise) that were exercised during 2025, 2024 and 2023 was $132.0 million, $162.4 million and $47.7 million, respectively.

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The total aggregate intrinsic value of options outstanding as of December 31, 2025 was $302.8 million, with a corresponding weighted-average remaining contractual life of 6.5 years. The total aggregate intrinsic value of options exercisable as of December 31, 2025 was $281.3 million, with a corresponding weighted-average remaining contractual life of 5.6 years. The total aggregate intrinsic value of options vested and expected to vest as of December 31, 2025 was $300.4 million, with a corresponding weighted-average remaining contractual life of 6.4 years.

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The lattice (binomial) option-pricing model is used to estimate the fair value of options at grant date. The Company’s primary employee option grant occurs during the fourth quarter. The weighted-average grant-date fair value of options granted and the significant assumptions used in determining the underlying fair value of each option grant, on the date of grant were as follows:

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The risk-free rate of return is determined based on a yield curve of U.S. treasury rates from one month to ten years and a period commensurate with the expected life of the options granted. Expected volatility is established based on historical volatility of the Company’s stock price. The expected dividend yield is determined based on the Company’s annual dividend amount as a percentage of the average stock price at the time of the grant.

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PBRSUs, RSUs and RSAs

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The expense associated with PBRSUs is based on the average of the high and low share price of the Company’s common stock on the date of grant, adjusted for the absence of future dividends. The awards vest based on the Company achieving a defined performance target from 0% to 200% and with continued service for a three year period. Upon vesting and following certification of performance by the Compensation & Human Capital Management Committee of the Board of Directors, the Company issues shares of its common stock such that one award unit equals one share of common stock. The Company assesses the probability of achieving the performance target and recognizes expense over the three year vesting period when it is probable the performance target will be met. PBRSU awards granted to retirement eligible recipients are attributed to expense using the non-substantive vesting method. The awards are generally subject to forfeiture in the event of termination of employment.

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The expense associated with shares of non-performance based RSUs and RSAs is based on the average of the high and low share price of the Company’s common stock on the date of grant, adjusted for the absence of future dividends and is amortized on a straight-line basis over the periods during which the restrictions lapse. The Company currently has RSUs that vest over periods between 24 and 48 months. The awards are generally subject to forfeiture in the event of termination of employment.

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A summary of non-vested PBRSUs and restricted stock activity is as follows:

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