KIMBERLY CLARK CORPKMB
KIMBERLY CLARK CORP Stock Compensation Disclosure
Stock-Based Compensation
We have a stock-based Equity Participation Plan and an Outside Directors' Compensation Plan (the "Plans"), under which we can grant stock options, restricted share units ("RSUs") and other types of awards described further in the Plans to employees and outside directors. As of December 31, 2025, the number of shares of common stock available for grants under the Plans aggregated to 6.3 million shares. Unless specifically stated, the following reflects consolidated information for the Company inclusive of the IFP Business.
Stock options are granted at an exercise price equal to the fair market value of our common stock on the date of grant, and they have a term of 10 years. Stock options are subject to graded vesting whereby options vest 30% at the end of each of the first two 12-month periods following the grant and 40% at the end of the third 12-month period.
Time-vested RSUs are valued at the closing market price of our common stock on the grant date and are generally subject to graded vesting whereby shares vest 30% at the end of each of the first two 12-month periods following the grant and 40% at the end of the third 12-month period. Time-vested restricted share unit grants issued for special one-time awards and performance-based RSUs granted to employees are valued at the closing market price of our common stock on the grant date and vest generally at the end of three years. The number of performance-based RSUs that ultimately vest ranges from zero to 200% of the number granted based on the attainment of performance metrics. Performance metrics are tied to modified free cash flow and organic sales growth during the three-year performance period. Modified free cash flow and organic sales growth targets are set at the beginning of the performance period. RSUs granted to outside directors are valued at the closing market price of our common stock on the grant date and vest when they are granted. These shares are subject to a restricted period that begins on the date of grant and expires within ninety days following the date the outside director retires from or otherwise terminates service on our Board.
At the time stock options are exercised or RSUs vest, common stock is issued from our accumulated treasury shares. Dividend equivalents are credited on RSUs on the same date and at the same rate as dividends are paid on Kimberly-Clark's common stock. These dividend equivalents, net of estimated forfeitures, are charged to retained earnings.
Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the award, net of estimated forfeitures, based on the fair value of the award at the date of grant. Stock-based compensation costs from continuing operations of $130, $122 and $160 and related deferred income tax benefits of $25, $27 and $34 were recognized for 2025, 2024 and 2023, respectively.
The fair value of stock option awards is determined on the date of grant using a Black-Scholes-Merton option-pricing model utilizing a range of assumptions related to dividend yield, volatility, risk-free interest rate, and historical employee exercise behavior. Dividend yield is based on historical experience and expected future dividend actions. Expected volatility is based on a blend of historical volatility and implied volatility from traded options on Kimberly-Clark's common stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. We estimate forfeitures based on historical data.
During 2025, 2024 and 2023, no stock options were granted.
Total remaining unrecognized compensation costs and amortization periods for our outstanding stock-based awards are as follows:
| December 31, 2025 | Weighted-Average Service Years | |||||||||||||
| Time-vested RSUs | $ | 71 | 1.3 | |||||||||||
| Performance-based RSUs | 16 | 1.6 | ||||||||||||
A summary of stock-based compensation activity and related information for outstanding stock options and RSUs is presented below:
| Stock Options | Shares (in thousands) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||||
| Outstanding as of January 1, 2025 | 2,976 | $ | 131.05 | |||||||||||||||||||||||
| Granted | — | — | ||||||||||||||||||||||||
| Exercised | (331) | 124.47 | ||||||||||||||||||||||||
| Forfeited or expired | (69) | 119.22 | ||||||||||||||||||||||||
| Outstanding as of December 31, 2025 | 2,576 | 131.75 | 3.7 | $ | — | |||||||||||||||||||||
| Exercisable as of December 31, 2025 | 2,575 | 131.75 | 3.7 | $ | — | |||||||||||||||||||||
The total intrinsic value of options exercised during 2025, 2024 and 2023 was $6, $19 and $23, respectively.
| Time-Vested RSUs | Performance-Based RSUs | |||||||||||||||||||||||||
| RSUs | Shares (in thousands) | Weighted-Average Grant-Date Fair Value | Shares (in thousands) | Weighted-Average Grant-Date Fair Value | ||||||||||||||||||||||
| Nonvested as of January 1, 2025 | 1,392 | $ | 137.79 | 686 | $ | 134.87 | ||||||||||||||||||||
| Granted | 889 | 129.57 | 608 | 131.63 | ||||||||||||||||||||||
| Vested | (698) | 137.34 | (557) | 133.09 | ||||||||||||||||||||||
| Forfeited | (134) | 135.90 | (41) | 138.59 | ||||||||||||||||||||||
| Nonvested as of December 31, 2025 | 1,449 | 133.15 | 696 | 135.76 | ||||||||||||||||||||||
The total fair value of RSUs that vested during 2025, 2024 and 2023 was $170, $185 and $99, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 8, 2024 | |
| 2022 | Feb 9, 2023 | |
| 2021 | Feb 10, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 7, 2019 | |
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.