LEGGETT & PLATT INCLEG
LEGGETT & PLATT INC Stock Compensation Disclosure
Stock-Based Compensation
Discount Stock Plan
PSU Awards
We use various forms of share-based compensation, which are summarized below. One stock unit is equivalent to one common share for accounting and earnings-per-share purposes. Shares are issued from treasury for the majority of our stock plans’ activity. All share information is presented in millions.
Stock options and stock units are available for grant pursuant to our Flexible Stock Plan (the "Plan"). On May 8, 2024, the Flexible Stock Plan changed the way awards granted under the plan are charged against the number of available shares. Under the 2024 Plan modification, shares issued pursuant to an award will count as one share against the shares available under the Plan.
At December 31, 2025, the following common shares were authorized for issuance under the Plan:
| Common Shares | |||||
| Unexercised options | .4 | ||||
| Outstanding stock units—vested | 4.5 | ||||
| Outstanding stock units—unvested | 2.5 | ||||
| Available for grant | 6.3 | ||||
| Authorized for issuance at December 31, 2025 | 13.7 | ||||
The following table recaps the impact of stock-based compensation on the results of operations for each of the periods presented:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| To Be Settled With Stock | To Be Settled In Cash | To Be Settled With Stock | To Be Settled In Cash | To Be Settled With Stock | To Be Settled In Cash | ||||||||||||||||||||||||||||||
Executive Stock Unit (ESU) program matching contributions 1 | $ | 2.7 | $ | .7 | $ | 3.7 | $ | .7 | $ | 3.0 | $ | .7 | |||||||||||||||||||||||
| Discounts on various stock awards: | |||||||||||||||||||||||||||||||||||
Deferred Stock Compensation Program 2 | .6 | — | 1.2 | — | 1.5 | — | |||||||||||||||||||||||||||||
ESU program 1 | .5 | — | 1.0 | — | 1.2 | — | |||||||||||||||||||||||||||||
Discount Stock Plan 3 | .6 | — | .7 | — | .7 | — | |||||||||||||||||||||||||||||
Performance Stock Unit (PSU) awards 4 | 1.1 | 1.5 | .1 | (.8) | 2.6 | .6 | |||||||||||||||||||||||||||||
Restricted Stock Unit (RSU) awards 5 | 8.8 | — | 11.8 | — | 8.8 | — | |||||||||||||||||||||||||||||
| Other, primarily non-employee directors restricted stock | .7 | — | .8 | — | .8 | — | |||||||||||||||||||||||||||||
| Total stock-related compensation expense (income) | 15.0 | $ | 2.2 | 19.3 | $ | (.1) | 18.6 | $ | 1.3 | ||||||||||||||||||||||||||
| Employee contributions for above stock plans | 4.6 | 7.2 | 9.0 | ||||||||||||||||||||||||||||||||
| Total stock-based compensation | $ | 19.6 | $ | 26.5 | $ | 27.6 | |||||||||||||||||||||||||||||
| Tax benefits on stock-based compensation expense | $ | 3.6 | $ | 4.7 | $ | 4.5 | |||||||||||||||||||||||||||||
| Tax (expense)/benefits on stock-based compensation payments | (2.8) | (1.1) | .4 | ||||||||||||||||||||||||||||||||
| Total tax benefits associated with stock-based compensation | $ | .8 | $ | 3.6 | $ | 4.9 | |||||||||||||||||||||||||||||
The following table recaps the impact of stock-based compensation on assets and liabilities for each of the periods presented:
ESU Program| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Current | Long-term | Total | Current | Long-term | Total | ||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
Diversified investments associated with the ESU program 1 | $ | 4.3 | $ | 55.9 | $ | 60.2 | $ | 3.7 | $ | 51.4 | $ | 55.1 | |||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||
ESU program 1 | $ | 4.4 | $ | 58.0 | $ | 62.4 | $ | 3.7 | $ | 50.2 | $ | 53.9 | |||||||||||||||||||||||
PSU awards 4 | — | 2.6 | 2.6 | — | 1.0 | 1.0 | |||||||||||||||||||||||||||||
| Other - primarily timing differences between employee withholdings and related employer contributions to be submitted to various plans' trust accounts | 5.0 | — | 5.0 | 5.5 | — | 5.5 | |||||||||||||||||||||||||||||
| Total liabilities associated with stock-based compensation | $ | 9.4 | $ | 60.6 | $ | 70.0 | $ | 9.2 | $ | 51.2 | $ | 60.4 | |||||||||||||||||||||||
The ESU program is a stock-based retirement plan for highly compensated employees. We make a matching contribution of 50% and will make another matching contribution of up to 50% of the
employee’s contributions for the year if certain profitability levels, as defined in the ESU program, are obtained.
Participants in the ESU program may contribute up to 10% (depending upon certain qualifications) of their compensation above a defined threshold. Participant contributions are credited to a diversified investment account established for the participant, and we make premium contributions to the diversified investment accounts equal to 17.65% of the participant’s contribution. A participant’s diversified investment account balance is adjusted to mirror the investment experience, whether positive or negative, of the diversified investments selected by the participant. Participants may change investment elections in the diversified investment accounts, but cannot purchase Company common stock or stock units. The diversified investment accounts consist of various mutual funds and retirement target funds and are unfunded, unsecured obligations of the Company that will be settled in cash. Both the assets and liabilities associated with this program are presented in the table above and are adjusted to fair value at each reporting period.
Company matching contributions to the ESU program, including dividend equivalents, are used to acquire stock units at 85% of the common stock market price on the acquisition date. Stock units are converted to common stock at a 1-to-1 ratio upon distribution from the program and may be settled in cash, except for distributions to the Company's Section 16 Officers.
Company matches in the ESU program fully vest upon five years of cumulative service, subject to certain participation requirements. Distributions are triggered by an employee’s retirement, death, disability, or separation from Leggett.
In 2025, employee contributions were $4.6, and employer premium contributions to diversified investment accounts were $.8. See the stock-based compensation table above for information regarding employer contributions.
Details regarding stock unit activity for the ESU program are reflected in the stock units summary table below.
Deferred Compensation Program We offer a Deferred Compensation Program under which key managers and outside directors may elect to receive stock units or interest-bearing cash deferrals in lieu of cash compensation:
•Until January 1, 2025, stock options under this program were granted in the last month of the year prior to the year the compensation was earned. There have been no material stock option grants in the years presented.
•Deferred stock units (DSU) under this program are acquired every two weeks (when the compensation would have otherwise been paid) at a 20% discount to the market price of our common stock on each acquisition date, and they vest immediately. Expense is recorded as the compensation is earned. Stock units earn dividend equivalents at the same rate as cash dividends paid on our common stock, which are then used to acquire stock units at a 20% discount. Stock units are converted to common stock and distributed in accordance with the participant’s pre-set election. However, stock units may be settled in cash, but only if there is not a sufficient amount of shares reserved for future issuance under the Flexible Stock Plan. Participants must begin receiving distributions no later than 10 years after the effective date of the deferral, and installment distributions cannot exceed 10 years.
•Interest-bearing cash deferrals under this program are reported in "Other long-term liabilities" on the Consolidated Balance Sheets and are disclosed in Note I.| Options | Units | Cash | |||||||||||||||
| Aggregate amount of compensation deferred during 2025 | $ | .1 | $ | 2.2 | $ | .3 | |||||||||||
Under the Discount Stock Plan (DSP), a tax-qualified §423 stock purchase plan, eligible employees may purchase shares of Leggett common stock at 85% of the closing market price on the last business day of each month. Shares are purchased and issued on the last business day of each month and generally cannot be sold or transferred for one year.
| Average 2025 purchase price per share (net of discount) | $ | 7.90 | |||
| 2025 number of shares purchased by employees | .4 | ||||
| Shares purchased since inception in 1982 | 24.7 | ||||
| Maximum shares under the plan | 27.0 | ||||
Our long-term incentive awards are split between PSUs and RSUs. Corporate officers receive 60% PSUs and 40% RSUs. For other selected participants, the award is granted at either half PSUs and half RSUs or 100% RSUs.
We intend to pay 50% in shares of our common stock and 50% in cash, although we reserve the right (subject to the Human Resources and Compensation (HRC) Committee's approval) to pay up to 100% in cash. Cash settlements are recorded as a liability and adjusted to fair value at each reporting period.
The awards are based on two performance conditions as detailed below. The base payout percentage will be determined by the level of achievement of these performance conditions, and then adjusted by a payout multiplier based on our Total Shareholder Return (TSR) compared to a peer group. Participants will earn from 0% to 200% of the base award.
Grant date fair values are calculated based on the grant date stock price and a Monte Carlo simulation of stock and volatility data for Leggett and each of the peer companies for the payout multiplier. Expense is adjusted quarterly over the three-year vesting period based on the number of shares expected to vest.
The PSU awards contain the following conditions:
•A service requirement—Awards generally "cliff" vest three years following the grant date.
•Two performance conditions over the three-year performance period:
•50% of the awards are based on Return on Invested Capital (ROIC). ROIC is calculated as our average annual net operating profit after tax divided by our average invested capital.
•50% of the awards are based on achieving specified Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) performance targets.
•A market condition—The payout multiplier is based upon our relative TSR compared to a group of peer companies during the three-year performance period. The peer group consists of all the companies in the Industrial, Materials, and Consumer Discretionary sectors of the S&P 500 and S&P Midcap 400 (approximately 320 companies). The multiplier will increase or decrease the payout by up to 25%, not to exceed the maximum 200% payout, and may not increase the payout above 100% if our TSR is negative.
Below is a summary of shares and grant date fair value related to PSU awards for the periods presented:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Total shares base award | .5 | .3 | .1 | ||||||||||||||
| Grant date per share fair value | $ | 8.99 | $ | 15.30 | $ | 29.31 | |||||||||||
| Risk-free interest rate | 4.0 | % | 4.5 | % | 4.4 | % | |||||||||||
| Vesting period in years | 3.0 | 3.0 | 3.0 | ||||||||||||||
| Expected volatility | 38.9 | % | 30.9 | % | 45.7 | % | |||||||||||
| Expected dividend yield | 2.2 | % | 9.0 | % | 5.5 | % | |||||||||||
The performance for the 2021-2023 award years (covering the three-year performance periods ending December 31, 2023, 2024, and 2025) resulted in payouts of less than 10% for the 2021 and 2022 award years, with distributions under .1 and cash payments of $.1 or less for each three-year cycle. The 2023 cycle did not meet the required performance thresholds, resulting in no payout.
5 Restricted Stock Unit Awards
RSU awards are generally granted as follows:
•As part of our long-term incentive awards, along with PSUs as discussed above
•As annual awards to selected managers
•On a discretionary basis to selected employees
•As compensation for outside directors
The value of these awards is determined by the stock price on the day of the award, and expense is generally recognized over the three-year vesting period, except for retirement-eligible employees that are expensed immediately at the RSU grant date or as they become retirement eligible. Those who are retirement eligible (after age 65 or on the date where the participant’s age plus years of service is greater than or equal to 70 years) will continue to receive shares that will vest after the retirement date.
Stock Units Summary
As of December 31, 2025, the unrecognized cost of non-vested stock units that is not adjusted to fair value was $6.1 with a weighted-average remaining contractual life of one year.
Stock unit information for the plans discussed above is presented in the table below:
| DSU | ESU | PSU | RSU | Total Units | Weighted Average Grant Date Fair Value per Unit | Aggregate Intrinsic Value | |||||||||||||||||||||||||||||||||||
| Unvested at December 31, 2024 | — | — | 1.1 | .3 | 1.4 | $ | 13.19 | ||||||||||||||||||||||||||||||||||
| Granted based on current service | .3 | .4 | — | 1.3 | 2.0 | 8.66 | |||||||||||||||||||||||||||||||||||
| Granted based on future conditions* | — | — | 1.1 | — | 1.1 | 4.50 | |||||||||||||||||||||||||||||||||||
| Vested | (.3) | (.4) | — | (.9) | (1.6) | 9.89 | |||||||||||||||||||||||||||||||||||
| Forfeited* | — | — | (.3) | (.1) | (.4) | 13.34 | |||||||||||||||||||||||||||||||||||
| Unvested at December 31, 2025 | — | — | 1.9 | .6 | 2.5 | $ | 7.70 | $ | 27.2 | ||||||||||||||||||||||||||||||||
| Fully vested shares available for issuance at December 31, 2025 | 4.5 | $ | 50.1 | ||||||||||||||||||||||||||||||||||||||
*Stock-settled PSU awards (50%) are presented at maximum payout of 200% at grant date and when forfeited.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Total intrinsic value of vested stock units converted to common stock | $ | — | $ | .1 | $ | 1.9 | |||||||||||
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.