SHARE-BASED COMPENSATION.
We grant stock options, restricted stock units and performance share units to employees under the 2022 Long-Term Incentive Plan. Grants made under all plans must be approved by the Management Development and Compensation Committee of GE Aerospace’s Board of Directors, which is composed entirely of independent directors. We record compensation expense for awards expected to vest over the vesting period. We estimate forfeitures based on experience and adjust expense to reflect actual forfeitures. When options are exercised, restricted stock units vest and performance share awards are earned, we issue shares from treasury stock.Stock options provide employees the opportunity to purchase GE Aerospace shares in the future at the market price of our stock on the date the award is granted (the strike price). The options become exercisable over the vesting period, typically three years, and expire 10 years from the grant date if not exercised. Restricted stock units (RSUs) represent the right to receive, upon vesting and lapse of restrictions, one share of GE Aerospace common stock for each unit granted. Performance stock units (PSUs) represent the right to receive, upon vesting and achievement of applicable performance or market conditions, shares of GE Aerospace common stock. We value stock options using a Black-Scholes option pricing model, RSUs using market price on grant date, and PSUs and performance shares using market price on grant date and a Monte Carlo simulation as needed based on performance metrics.
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| WEIGHTED AVERAGE GRANT DATE FAIR VALUE | 2025 | 2024 | 2023 |
| Stock options | $ | 79.55 | | $ | 65.16 | | $ | 36.10 | |
| RSUs | 212.45 | | 160.70 | | 89.6 | |
| PSUs | 221.46 | | 150.05 | | 89.44 | |
Key assumptions used in the Black-Scholes valuation for stock options include: risk free rates of 4.1%, 4.6%, and 4.2%, dividend yields of 0.7%, 0.7%, and 0.4%, expected volatility of 36%, 36%, and 36%, expected lives of 6.1 years, 6.1 years, and 6.8 years, and strike prices of $202.16, $160.51, and $88.15 for 2025, 2024 and 2023, respectively.
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| STOCK-BASED COMPENSATION ACTIVITY | Stock options | | RSUs |
| Shares (in thousands) | Weighted average exercise price | Weighted average contractual term (in years) | Intrinsic value (in millions) | | Shares (in thousands) | Weighted average grant date fair value | Weighted average contractual term (in years) | Intrinsic value (in millions) |
| Outstanding at January 1, 2025 | 10,917 | | $ | 91.78 | | | | | 3,607 | | $ | 103.70 | | | |
| Granted | 569 | | 202.16 | | | | | 380 | | 212.45 | | | |
| Exercised | (4,102) | | 104.40 | | | | | (1,459) | | 67.10 | | | |
| Forfeited | (83) | | 172.13 | | | | | (137) | | 135.42 | | | |
| Expired | (37) | | 122.58 | | | | | N/A | N/A | | |
| Outstanding at December 31, 2025 | 7,264 | | $ | 92.22 | | 3.8 | $ | 1,568 | | | 2,391 | | $ | 141.49 | | 1.2 | $ | 736 | |
| Exercisable at December 31, 2025 | 5,829 | | $ | 72.33 | | 2.6 | $ | 1,374 | | | N/A | N/A | N/A | N/A |
| Expected to vest | 1,265 | | $ | 172.50 | | 8.6 | $ | 171 | | | 2,194 | | $ | 139.74 | | 1.2 | $ | 676 | |
Total outstanding target PSUs at December 31, 2025 were 1,482 thousand shares with a weighted average fair value of $157.45. The intrinsic value and weighted average contractual term of target PSUs outstanding were $456 million and 1.1 years, respectively.
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| 2025 | 2024 | 2023 |
| Compensation expense (after-tax)(a) | $ | 325 | | $ | 286 | | $ | 192 | |
| Cash received from stock options exercised | 428 | | 1,492 | | 565 | |
| Intrinsic value of stock options exercised and RSU/PSU/Performance shares vested | 853 | | 1,754 | | 561 | |
(a)Unrecognized compensation cost related to unvested equity awards as of December 31, 2025 was $303 million, which will be amortized over a weighted average period of 1.7 years. Income tax benefit recognized in net income on stock-based compensation was $165 million, $152 million and $29 million in 2025, 2024 and 2023, respectively.