nVent Electric plcNVT
nVent Electric plc Stock Compensation Disclosure
Share-Based Compensation
As of December 31, 2025, the Company had various share-based awards outstanding which were issued to executives and other eligible employees and directors. Awards with service conditions or both service and market conditions are expensed over the period during which an employee is required to provide service in exchange for the award. The Company estimates forfeitures as part of recording share-based compensation expense.
The Company’s long-term incentive program for awarding share-based compensation includes a combination of restricted stock, performance shares and stock options of the Company’s common stock pursuant to the nVent Electric plc 2018 Omnibus Incentive Plan (“2018 Omnibus Incentive Plan”). nVent's sole shareholder approved the 2018 Omnibus Incentive Plan in 2018. The Company's shareholders approved a subsequent amendment to increase the shares authorized for issuance under the 2018 Omnibus Incentive Plan in 2020. The 2018 Omnibus Incentive Plan authorizes the issuance of 18.5 million shares to settle awards. Our practice is to settle share-based awards by issuing new shares of common stock. Upon vesting, dividends that have accumulated during the vesting period are paid on earned awards.
Total share-based compensation expense for the years ended 2025, 2024 and 2023, was as follows:
| In millions | 2025 | 2024 | 2023 | ||||||||
| Restricted stock units | $ | 18.8 | $ | 14.0 | $ | 10.5 | |||||
| Performance share units | 11.5 | 7.9 | 7.1 | ||||||||
| Stock options | 7.2 | 5.4 | 4.2 | ||||||||
| Total | $ | 37.5 | $ | 27.3 | $ | 21.8 | |||||
The total income tax benefit recognized for share-based compensation arrangements for continuing operations for the years ended December 31, 2025, 2024 and 2023 was $6.1 million, $8.1 million and $3.9 million, respectively.
Restricted stock units (RSUs)
Under the 2018 Omnibus Incentive Plan, the Company may award RSUs of our common stock to certain eligible employees and directors. RSUs generally vest one-third each year over a period of three years commencing on the grant date, subject to continuous employment and certain other conditions. The fair values of the RSUs are based on the closing price of the Company’s stock on the date of grant, and are expensed over the vesting period.
The following table summarizes restricted stock unit activity for the year ended December 31, 2025:
| Shares in millions | Number of shares | Weighted-average grant date fair value | ||||||
Outstanding as of January 1, 2025 | 0.5 | $ | 55.69 | |||||
| Granted | 0.4 | 56.46 | ||||||
| Vested | (0.3) | 50.41 | ||||||
Outstanding as of December 31, 2025 | 0.6 | 58.17 | ||||||
As of December 31, 2025, there was $15.8 million of unrecognized compensation expense related to RSUs granted, which is expected to be recognized over a weighted-average period of 2.3 years. The total fair value of RSUs vested during the years ended December 31, 2025, 2024 and 2023 was $14.3 million, $11.9 million and $9.4 million, respectively.
Performance share units (“PSUs”)
Under the 2018 Omnibus Incentive Plan, the Company may award PSUs whose vesting is based on the satisfaction of a service period of three years and the achievement of certain performance metrics over that same period.
For PSU awards granted in 2025, 2024 and 2023, the awards vest based on the satisfaction of a three-year service period and total shareholder return (“TSR”) relative to the S&P 400 Industrials. Awards earned at the end of the three-year vesting period range from 0% to 200% of the targeted number of PSUs granted based on the ranking of TSR of the Company, assuming reinvestment of all dividends, relative to the S&P 400 Industrials. Expense is recognized over the period during which an employee is required to provide service in exchange for the award, and is recognized irrespective of the market condition being achieved.
The grant-date fair value of PSUs with market conditions was determined based upon a lattice model. The principal assumptions used in the lattice model include the expected share price volatility of the Company and members of the defined peer group (based on the most recent three-year period as of the grant date) and the risk-free interest rate (an estimate based on the yield of the U.S. Treasury yield curve in effect at the time of the grant for the expected term of the award). A summary of the assumptions used in determining the fair value of these PSUs is as follows:
2025 | 2024 | 2023 | |||||||||
| Risk-free interest rate | 3.94 | % | 4.36 | % | 4.66 | % | |||||
| Expected share price volatility | 39.9 | % | 43.0 | % | 51.5 | % | |||||
| Grant-date fair value | $ | 59.17 | $ | 103.93 | $ | 68.72 | |||||
The following table summarizes PSU activity for the year ended December 31, 2025:
| Shares in millions | Number of shares | Weighted-average grant date fair value | ||||||
Outstanding as of January 1, 2025 | 0.3 | $ | 66.95 | |||||
| Granted | 0.4 | 59.17 | ||||||
| Vested | (0.3) | 43.31 | ||||||
Outstanding as of December 31, 2025 | 0.4 | 73.00 | ||||||
As of December 31, 2025, there was $6.1 million of unrecognized compensation expense related to performance share compensation arrangements granted under the 2018 Omnibus Incentive Plan. The expense is expected to be recognized over a weighted-average period of 1.8 years. The total fair value of PSUs vested during the years ended December 31, 2025, 2024 and 2023 was $13.1 million, $14.2 million and $9.6 million, respectively.
Stock Options
Under the 2018 Omnibus Incentive Plan, the Company may grant stock options to any eligible employee with an exercise price equal to the market value of the shares on the dates the options were granted. Options generally vest one-third each year over a period of three years commencing on the grant date and expire ten years after the grant date.
We estimated the fair value of each stock option award issued in the annual share-based compensation grant using a Black-Scholes option pricing model, modified for dividends, and using the following assumptions for the years ended December 31:
2025 | 2024 | 2023 | |||||||||
| Risk-free interest rate | 4.33 | % | 4.06 | % | 3.77 | % | |||||
| Expected dividend yield | 1.16 | % | 1.27 | % | 1.73 | % | |||||
| Expected share price volatility | 37.6 | % | 37.1 | % | 36.6 | % | |||||
| Expected term (years) | 6.1 | 6.8 | 6.5 | ||||||||
| Weighted-average grant-date fair value for options granted during the year | $ | 22.05 | $ | 27.16 | $ | 16.56 | |||||
These estimates require us to make assumptions based on historical results, observance of trends in our share price, changes in option exercise behaviors, future expectations and other relevant factors. If other assumptions had been used, share-based compensation expense, as calculated and recorded under the accounting guidance, could have been affected.
We based the expected life assumption on historical experience as well as the terms and vesting periods of the options granted. For purposes of determining expected volatility, we considered historical volatilities of peer companies over a period approximately equal to the expected option term. The risk-free rate for periods that coincide with the expected life of the options is based on the U.S. Treasury Department yield curve in effect at the time of grant.
The following table summarizes stock option activity for the year ended December 31, 2025:
| Shares and intrinsic value in millions | Number of shares | Weighted-average exercise price | Weighted-average remaining contractual life (years) | Aggregate intrinsic Value | ||||||||||
Outstanding as of January 1, 2025 | 3.2 | $ | 30.64 | |||||||||||
| Granted | 0.3 | 56.35 | ||||||||||||
| Exercised | (1.1) | 25.40 | ||||||||||||
Outstanding as of December 31, 2025 | 2.4 | 36.30 | ||||||||||||
Options exercisable as of December 31, 2025 | 1.9 | 29.93 | 4.4 | $ | 134.1 | |||||||||
Options expected to vest as of December 31, 2025 | 0.5 | 58.16 | 8.5 | 23.5 | ||||||||||
As of December 31, 2025, there was $3.1 million of unrecognized compensation cost related to non-vested options expected to be recognized over a weighted-average period of 2.0 years. The total intrinsic value of options exercised for the years ended December 31, 2025, 2024 and 2023 was $71.6 million, $51.7 million and $10.4 million, respectively.
Cash received from option exercised for the years ended December 31, 2025, 2024 and 2023 was $28.8 million, $20.4 million and $10.8 million, respectively. The actual tax benefit realized for the tax deductions from options exercised for continuing operations totaled $2.4 million, $3.4 million and $1.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 28, 2023 | |
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.