PERRIGO Co plcPRGO
PERRIGO Co plc Stock Compensation Disclosure
SHARE-BASED COMPENSATION PLANS
The were no RTSR performance share units that vested during the years ended December 31, 2025, 2024 or 2023.
All share-based compensation for employees and directors is granted under the 2019 Long-Term Incentive Plan, as amended (the "Plan"), which has been approved by our shareholders. The purpose of the Plan is to attract and retain individuals of exceptional talent and encourage these individuals to acquire a vested interest in our success and prosperity. The awards that may be granted under this program include non-qualified stock options, stock appreciation rights, restricted stock and restricted share units. Restricted shares are generally service-based, requiring a certain length of service before vesting occurs, while restricted share units can be either service-based or performance-based. Performance-based restricted share units also require a certain length of service until vesting, but contain an additional performance feature, which can vary the amount of shares ultimately paid out based on certain performance criteria specified in the Plan or award. Performance share units that are based on relative total shareholder return are subject to a market condition. Awards granted under the Plan vest and may be exercised and/or sold from one year to ten years after the date of grant based on a vesting schedule. As of December 31, 2025, there were 1.7 million shares available to be granted.
Share-based compensation expense was as follows (in millions):
| Year Ended | ||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||
| $ | 54.6 | $ | 64.8 | $ | 68.8 | |||||||||
As of December 31, 2025, unrecognized share-based compensation expense was $67.8 million, and the weighted-average period over which the expense is expected to be recognized was approximately 1.4 years. Proceeds from the exercise of stock options are credited to ordinary shares.
Stock Options
A summary of activity related to stock options is presented below (options in thousands):
| Number of Options | Weighted-Average Exercise Price Per Share | Weighted- Average Remaining Term in Years | |||||||||||||||
Options outstanding at December 31, 2023 | 951 | $ | 91.36 | 3.2 | |||||||||||||
| Forfeited or expired | (111) | $ | 132.36 | ||||||||||||||
Options outstanding at December 31, 2024 | 840 | $ | 85.94 | 2.4 | |||||||||||||
| Forfeited or expired | (19) | $ | 86.19 | ||||||||||||||
Options outstanding at December 31, 2025 | 821 | $ | 85.93 | 1.5 | |||||||||||||
The aggregate intrinsic value for options exercised and the weighted-average fair value per share at the grant date for options granted was zero for the years ended December 31, 2025, December 31, 2024, and December 31, 2023.
Non-Vested Service-Based Restricted Share Units
A summary of activity related to non-vested service-based restricted share units is presented below (units in thousands):
| Number of Non-vested Service- Based Share Units | Weighted- Average Grant Date Fair Value Per Share | Weighted- Average Remaining Term in Years | Aggregate Intrinsic Value | ||||||||||||||||||||
Non-vested service-based share units outstanding at December 31, 2023 | 2,241 | $ | 36.92 | 0.9 | $ | 72.1 | |||||||||||||||||
| Granted | 1,609 | $ | 30.97 | ||||||||||||||||||||
| Vested | (1,110) | $ | 37.00 | ||||||||||||||||||||
| Forfeited | (137) | $ | 34.77 | ||||||||||||||||||||
Non-vested service-based share units outstanding at December 31, 2024 | 2,603 | $ | 33.32 | 0.9 | $ | 66.9 | |||||||||||||||||
| Granted | 1,958 | $ | 26.24 | ||||||||||||||||||||
| Vested | (1,329) | $ | 33.71 | ||||||||||||||||||||
| Forfeited | (157) | $ | 30.75 | ||||||||||||||||||||
Non-vested service-based share units outstanding at December 31, 2025 | 3,075 | $ | 28.78 | 1.0 | $ | 42.8 | |||||||||||||||||
The weighted-average fair value per share at the date of grant for service-based restricted share units granted was as follows:
| Year Ended | ||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||
| $ | 26.24 | $ | 30.97 | $ | 36.44 | |||||||||
The total fair value of service-based restricted share units that vested was as follows (in millions):
| Year Ended | ||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||
| $ | 44.8 | $ | 41.1 | $ | 45.9 | |||||||||
Non-Vested Performance-Based Restricted Share Units
A summary of activity related to non-vested performance-based restricted share units is presented below (units in thousands):
| Number of Non-vested Performance- Based Share Units | Weighted- Average Grant Date Fair Value Per Share | Weighted- Average Remaining Term in Years | Aggregate Intrinsic Value | ||||||||||||||||||||
Non-vested performance-based share units outstanding at December 31, 2023 | 1,271 | $ | 37.65 | 1.3 | $ | 40.9 | |||||||||||||||||
| Granted | 795 | $ | 30.87 | ||||||||||||||||||||
| Vested | (377) | $ | 40.79 | ||||||||||||||||||||
| Forfeited | (48) | $ | 34.77 | ||||||||||||||||||||
Non-vested performance-based share units outstanding at December 31, 2024 | 1,641 | $ | 33.99 | 1.4 | $ | 42.2 | |||||||||||||||||
| Granted | 547 | $ | 26.19 | ||||||||||||||||||||
| Vested | (552) | $ | 36.39 | ||||||||||||||||||||
| Forfeited | (57) | $ | 33.76 | ||||||||||||||||||||
Non-vested performance-based share units outstanding at December 31, 2025 | 1,579 | $ | 30.19 | 1.5 | $ | 22.0 | |||||||||||||||||
The weighted-average fair value of performance-based restricted share units can fluctuate depending upon the success or failure of the achievement of performance criteria as set forth in the Plan. The weighted-average fair value per share at the date of grant for performance-based restricted share units granted was as follows:
| Year Ended | ||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||
| $ | 26.19 | $ | 30.87 | $ | 36.44 | |||||||||
The total fair value of performance-based restricted share units that vested was as follows (in millions):
| Year Ended | ||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||
| $ | 20.1 | $ | 15.4 | $ | 13.9 | |||||||||
Non-vested Relative Total Shareholder Return Performance Share Units
The fair value of the RTSR performance share units is determined using the Monte Carlo pricing model as the number of shares to be awarded is subject to a market condition. The valuation model considers a range of possible outcomes, and compensation cost is recognized regardless of whether the market condition is actually satisfied.
The assumptions used in estimating the fair value of the RTSR performance share units granted during each year were as follows:
| Year Ended | |||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
| Dividend yield | 4.4 | % | 3.5 | % | 3.0 | % | |||||||||||
| Volatility, as a percent | 33.0 | % | 33.0 | % | 32.0 | % | |||||||||||
| Risk-free interest rate | 4.0 | % | 4.5 | % | 4.6 | % | |||||||||||
| Expected life in years | 2.6 | 2.7 | 2.8 | ||||||||||||||
A summary of activity related to non-vested RTSR performance share units is presented below (units in thousands):
| Number of Non-vested RTSR Performance Share Units | Weighted- Average Grant Date Fair Value Per Share | Weighted- Average Remaining Term in Years* | Aggregate Intrinsic Value | ||||||||||||||||||||
Non-vested RTSR performance share units outstanding at December 31, 2023 | 329 | $ | 41.33 | 1.2 | $ | 10.6 | |||||||||||||||||
| Granted | 19 | $ | 31.15 | ||||||||||||||||||||
Non-vested RTSR performance share units outstanding at December 31, 2024 | 348 | $ | 38.27 | 1.1 | $ | 8.9 | |||||||||||||||||
| Granted | 9 | $ | 26.20 | ||||||||||||||||||||
| Forfeited | (8) | $ | 42.59 | ||||||||||||||||||||
Non-vested RTSR performance share units outstanding at December 31, 2025 | 349 | $ | 32.26 | 1.4 | $ | 4.9 | |||||||||||||||||
* Midpoint used in calculation.
The weighted-average fair value per share at the date of grant for RTSR performance share units granted was as follows:
| Year Ended | ||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||
| $ | 26.20 | $ | 31.15 | $ | 42.09 | |||||||||
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.