IDEX CORP /DE/IEX
IDEX CORP /DE/ Stock Compensation Disclosure
Share-Based Compensation
The Company maintains a share-based compensation plan for executives, non-employee directors and certain key employees that authorize the granting of restricted stock, performance share units and stock options and other types of awards consistent with the purpose of the plan. A total of 9.9 million shares of the Company’s common stock have been authorized for issuance under the Company’s share-based compensation plan. As of December 31, 2025, 9.4 million shares of the Company’s common stock were available for future issuance.
The Company typically grants equity awards annually at its regularly scheduled first quarter meeting of the Company’s Board of Directors based on the recommendation from the Compensation Committee of the Company’s Board of Directors.
Stock Options
Stock options granted under the Company’s plan are generally non-qualified and are granted with an exercise price equal to the market price of the Company’s common stock on the date of grant. The fair value of each option grant in the periods presented was estimated on the date of the grant using the Black Scholes valuation model. Stock options generally vest ratably over four years, with vesting beginning one year from the date of grant, and generally expire 10 years from the date of grant.
The service period for certain retiree eligible participants is accelerated. The assumptions used in determining the fair value of the stock options granted during December 31, 2025, 2024 and 2023 were as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Weighted average fair value of grants | $46.74 | $63.61 | $59.77 | ||||||||||||||
| Dividend yield | 1.41% | 1.09% | 1.09% | ||||||||||||||
| Volatility | 23.06% | 26.66% | 27.14% | ||||||||||||||
| Risk-free interest rate | 4.28% | 4.31% | 4.15% | ||||||||||||||
| Expected life (in years) | 4.70 | 4.60 | 4.50 | ||||||||||||||
The assumptions were determined as follows:
•The Company estimated volatility using its historical share price performance over the expected life of the option.
•The Company uses historical data to estimate the expected life of the option based on IDEX’s own exercise and cancellation history adjusted for current vesting schedules.
•The risk-free interest rate is based on the U.S. Treasury yield curve commensurate with the expected life of the option. The Company presents the spot rate used in the Black Scholes valuation model.
•The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the option.
A summary of the Company’s stock option activity as of December 31, 2025, and changes during the year ended December 31, 2025, are presented in the following table:
| Shares | Weighted Average Exercise Price | Weighted-Average Remaining Contractual Term (years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| Stock Options | |||||||||||||||||||||||
| Outstanding at January 1, 2025 | 998,856 | $ | 191.96 | 6.63 | $ | 24.9 | |||||||||||||||||
| Granted | 82,470 | 196.07 | |||||||||||||||||||||
| Exercised | (28,408) | 128.86 | |||||||||||||||||||||
| Forfeited | (98,717) | 212.92 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 954,201 | $ | 192.03 | 5.82 | $ | 8.9 | |||||||||||||||||
| Vested and expected to vest at December 31, 2025 | 942,815 | $ | 191.69 | 5.79 | $ | 8.9 | |||||||||||||||||
| Exercisable at December 31, 2025 | 671,427 | $ | 181.50 | 4.95 | $ | 8.9 | |||||||||||||||||
The intrinsic value for stock options outstanding and exercisable is defined as the difference between the market value of the Company’s common stock as of the end of the period and the grant price. The total intrinsic value of options exercised in 2025, 2024 and 2023 was $1.8 million, $9.6 million and $14.9 million, respectively. In 2025, 2024 and 2023, cash received from options exercised was $3.7 million, $19.4 million and $26.3 million, respectively, while the actual tax benefit realized for the tax deductions from stock options exercised totaled $0.4 million, $2.0 million and $3.1 million, respectively.
As of December 31, 2025, there was $4.5 million of total unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.1 years.
Restricted Stock
Restricted stock awards generally cliff vest after three years for employees and generally cliff vest after one year for non-employee directors. The service period for certain retiree eligible participants is accelerated. Unvested restricted stock granted after the adoption of the 2024 Incentive Award Plan earn dividend equivalents for the award period, which will be paid to participants upon vesting of the underlying awards. Unvested restricted stock granted prior to the adoption of the 2024 Incentive Award Plan earn and are paid dividends on a current basis. The sale of the shares is restricted prior to the date of vesting. The fair value of restricted stock is equal to the market price of the Company’s common stock at the date of the grant. A summary of the Company’s restricted stock activity as of December 31, 2025, and changes during the year ended December 31, 2025, are presented in the following table:
| Restricted Stock | Shares | Weighted-Average Grant Date Fair Value | |||||||||
| Unvested at January 1, 2025 | 175,991 | $ | 201.27 | ||||||||
| Granted | 106,875 | 191.13 | |||||||||
| Vested | (64,072) | 190.37 | |||||||||
| Forfeited | (27,972) | 205.42 | |||||||||
| Unvested at December 31, 2025 | 190,822 | $ | 198.64 | ||||||||
As of December 31, 2025, there was $14.9 million of total unrecognized compensation cost related to restricted stock that is expected to be recognized over a weighted-average period of 0.9 years.
Cash-Settled Restricted Stock
The Company also maintains a cash-settled share-based compensation plan for certain employees. Cash-settled restricted stock awards generally cliff vest after three years. The service period for certain retiree eligible participants is accelerated. Cash-settled restricted stock awards are recorded at fair value on a quarterly basis using the market price of the Company’s common stock on the last day of the quarter. At December 31, 2025 and 2024, the Company had accrued $3.6 million and $4.0 million, respectively, for cash-settled restricted stock in Accrued expenses in the Consolidated Balance Sheets and had accrued $2.4 million in both periods for cash-settled restricted stock in Other noncurrent liabilities in the Consolidated Balance Sheets. These recurring fair value measurements are classified as Level 1 in the fair value hierarchy. Dividend equivalents are earned throughout the award period and paid upon vesting for certain cash-settled restricted stock awards granted after the adoption of the 2024 Incentive Award Plan. Dividend equivalents are paid on a current basis on certain cash-settled restricted stock awards granted prior to the adoption of the 2024 Incentive Award Plan. A summary of the Company’s unvested cash-settled restricted stock activity as of December 31, 2025, and changes during the year ended December 31, 2025, are presented in the following table:
| Cash-Settled Restricted Stock | Shares | Weighted-Average Fair Value | |||||||||
| Unvested at January 1, 2025 | 55,395 | $ | 209.29 | ||||||||
| Granted | 32,090 | 195.10 | |||||||||
| Vested | (19,131) | 186.52 | |||||||||
| Forfeited | (6,062) | 177.94 | |||||||||
| Unvested at December 31, 2025 | 62,292 | $ | 177.94 | ||||||||
As of December 31, 2025, there was $3.9 million of total unrecognized compensation cost related to cash-settled restricted stock that is expected to be recognized over a weighted-average period of 1.0 year.
Performance Share Units
The Company grants performance share units to selected key employees. Performance share unit awards represent rights to receive shares of the Company’s common stock and will vest between 0% to 250% of the target share unit amount. Performance share units are expected to be made annually and are paid out at the end of a three-year period following the date of grant, based on the Company’s performance, as described below. Performance share units granted in 2025 are earned over a three-year performance period based on an internal income growth metric (a performance condition), weighted 25%, and the total shareholder return of the Company’s common stock in relation to the total shareholder return of companies in the S&P 500 Index (a market condition), weighted 75%. Performance share unit awards granted prior to 2025 are earned solely based on the Company’s total shareholder return ranking in relation to the total shareholder return of companies in the S&P 500 Index over a three-year period following the date of grant. A target payout of 100% of the market condition portion of the award is earned if total shareholder return is equal to the 50th percentile of the peer group. Performance share units earn dividend equivalents for the award period, which will be paid to participants with the award payout at the end of the period based on the actual number of performance share units that are earned. Payments made at the end of the award period will be in the form of stock for performance share units and will be in cash for dividend equivalents.
The fair value of the performance condition portion of the 2025 awards is equal to the market price of the Company’s common stock at the date of the grant, and the amount of expense recognized over the vesting period is subject to adjustment based on the expected attainment of the performance condition. The fair value of the market condition portion of the 2025
awards and all awards granted prior to 2025 is determined using a Monte Carlo simulation model, and the amount of expense recognized over the vesting period is not subject to change based on future market conditions.
The assumptions used in the Monte Carlo simulation model to determine the fair value of the market condition portion of the performance share units granted during December 31, 2025, 2024 and 2023 were as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Weighted average fair value of grants | $232.44 | $349.59 | $308.18 | ||||||||||||||
| Dividend yield | —% | —% | —% | ||||||||||||||
| Volatility | 22.93% | 22.23% | 27.00% | ||||||||||||||
| Risk-free interest rate | 4.23% | 4.45% | 4.37% | ||||||||||||||
| Expected life (in years) | 2.94 | 2.94 | 2.94 | ||||||||||||||
The assumptions used in the Monte Carlo simulation model were determined as follows:
•The Company estimated volatility using its historical share price performance over the remaining performance period as of the grant date.
•The Company uses a Monte Carlo simulation model that uses an expected life commensurate with the performance period. As a result, the expected life of the performance share units was assumed to be the period from the grant date to the end of the performance period.
•The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with a term commensurate with the remaining performance period.
•Total shareholder return is determined assuming that dividends are reinvested in the issuing entity over the performance period, which is mathematically equivalent to utilizing a 0% dividend yield.
A summary of the Company’s performance share unit activity as of December 31, 2025, and changes during the year ended December 31, 2025, are presented in the following table:
| Performance Share Units | Shares | Weighted-Average Grant Date Fair Value | |||||||||
| Unvested at January 1, 2025 | 72,825 | $ | 299.87 | ||||||||
| Granted | 43,360 | 216.98 | |||||||||
| Vested | (15,530) | 234.23 | |||||||||
| Forfeited | (22,450) | 264.20 | |||||||||
| Unvested at December 31, 2025 | 78,205 | $ | 267.78 | ||||||||
The performance period for the 2022 grants ended as of January 31, 2025. The 2022 grants achieved a 65% payout factor and the Company issued 15,530 shares of the Company’s common stock in February 2025 for awards that vested in 2025. The performance period for the 2023 grants ended as of January 31, 2026. The 2023 grants achieved a 0% payout factor, and as such, the Company did not issue any shares of the Company’s stock for awards that vested in 2026.
As of December 31, 2025, there was $2.4 million of total unrecognized compensation cost related to performance share units that is expected to be recognized over a weighted-average period of 1.0 year.
Summary of Share-Based Compensation Expense
The Company’s policy is to recognize compensation cost on a straight-line basis, assuming forfeitures, over the requisite service period for the entire award. Classification of share-based compensation cost within the Consolidated Statements of Income is consistent with the classification of cash compensation for the same employees. Total compensation cost related to all share-based awards was as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Stock options expense | $ | 6.1 | $ | 9.8 | $ | 9.9 | |||||||||||
| Restricted stock expense | 15.2 | 8.3 | 5.7 | ||||||||||||||
| Cash-settled restricted stock expense | 3.2 | 3.4 | 3.4 | ||||||||||||||
| Performance share units expense | 6.0 | 7.7 | 6.0 | ||||||||||||||
Total pre-tax share-based compensation expense(1) | 30.5 | 29.2 | 25.0 | ||||||||||||||
| Income tax benefit | (4.1) | (3.2) | (2.7) | ||||||||||||||
| Total share-based compensation expense, net of income taxes | $ | 26.4 | $ | 26.0 | $ | 22.3 | |||||||||||
(1) Pre-tax compensation cost is recognized in the Company’s Consolidated Statements of Income depending on the functional area of the underlying employees, as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cost of sales | $ | 1.9 | $ | 1.6 | $ | 1.4 | |||||||||||
| Selling, general and administrative expenses | 29.2 | 27.6 | 23.6 | ||||||||||||||
Restructuring expenses and asset impairments(2) | (0.6) | — | — | ||||||||||||||
| Total pre-tax share-based compensation expense | $ | 30.5 | $ | 29.2 | $ | 25.0 | |||||||||||
(2) During the year ended December 31, 2025, a benefit of $0.6 million was recognized in Restructuring expenses and asset impairments in the Company’s Consolidated Statements of Income related to forfeitures of share-based compensation awards resulting from previously announced restructuring actions initiated during the first quarter of 2025.
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 24, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 19, 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.