ESSENTIAL UTILITIES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (continued) (In thousands of dollars, except per share amounts)
Stock Awards – Stock awards represent the issuance of the Company’s common stock, without restriction. Stock awards are granted to the Company’s non-employee directors. The issuance of stock awards results in compensation expense which is equal to the fair market value of the stock on the grant date, and is expensed immediately upon grant. The following table provides compensation cost and income tax benefit for stock-based compensation related to stock awards:
Years ended December 31, 2025 2024
2023
Stock-based compensation within operations and maintenance expense
$ $
810 $ 221 $
840$ 810 233$ 228
Income tax benefit
The following table summarizes the value of stock awards:
Years ended December 31, 2025 2024
2023
Intrinsic and fair value of stock awards vested Weighted average fair value of stock awards granted
$ $
810$ 840$ 810 37.42$ 36.82$ 41.58
The following table summarizes stock award transactions for year ended December 31, 2025:
Number of Stock Awards
Weighted Average Fair Value
Nonvested stock awards at beginning of period
- $
-
Granted Vested
21,648
37.42 37.42
(21,648)
Nonvested stock awards at end of period
- $
-
Note 17 – Pension Plans and Other Post-retirement Benefits
The Company maintains a qualified, defined benefit pension plan that covers its full-time employees who were hired prior to the date their respective pension plan was closed to new participants. Retirement benefits under the plan are generally based on the employee’s total years of service and compensation during the last five years of employment. The Company’s policy is to fund the plan annually at a level which is deductible for income tax purposes and which provides assets sufficient to meet its pension obligations over time. To offset some limitations imposed by the Internal Revenue Code with respect to payments under qualified plans, the Company has a non- qualified Supplemental Pension Benefit Plan for Salaried Employees in order to prevent some employees from being penalized by these limitations, and to provide certain retirement benefits based on employee’s years of service and compensation. The net pension costs and obligations of the qualified and non-qualified plans are included in the tables which follow. Employees hired after their respective pension plan was closed, may participate in a defined contribution plan that provides a Company matching contribution on amounts contributed by participants and an annual profit-sharing contribution based upon a percentage of the eligible participants’ compensation. The Company’s qualified defined benefit pension plan has a permanent lump sum option on the form of benefit payments offered to participants upon retirement or termination. The plan paid $8,062 and $4,003 to participants who elected this option during 2025 and 2024, respectively.
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