Schwab’s 2022 Stock Incentive Plan provides for granting options and restricted stock units to employees and non-employee directors. In addition, we offer retirement and employee stock purchase plans to eligible employees and sponsor deferred compensation plans for certain eligible employees and non-employee directors.


Year Ended December 31,	2025		2024		2023
Restricted stock unit expense	$	264	$	266	$	262
Stock option expense	24		47		33
Employee stock purchase plan expense	29		24		25
Total share-based compensation expense	$	317	$	337	$	320
Income tax benefit on share-based compensation expense (1)	$	(76)	$	(80)	$	(76)

(1) Excludes income tax benefits from stock options exercised and restricted stock units vested of $40 million, $20 million, and $31 million in 2025, 2024, and 2023, respectively.

The Company issues shares for stock options and restricted stock units from treasury stock. At December 31, 2025, the Company was authorized to grant up to 102 million common shares under the 2022 Stock Incentive Plan. Additionally, at December 31, 2025, the Company had 21 million shares reserved for future issuance under its employee stock purchase plan.

As of December 31, 2025, there was $328 million of total unrecognized compensation cost related to outstanding stock options and restricted stock units, which is expected to be recognized through 2029 with a remaining weighted-average service period of 0.6 years for stock options, 1.6 years for restricted stock units without performance conditions, and 0.4 years for performance-based restricted stock units.

Options are granted for the purchase of shares of common stock at an exercise price not less than market value on the date of grant, and expire ten years from the date of grant. Options generally vest annually over a one- to four-year period from the date of grant.


	Number of Options (in millions)	Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2024	16	$	52.50	5.04	$	358

Granted	1	78.65
Exercised	(4)	40.61
Forfeited (1)	—	62.90
Expired (1)	—	62.83
Outstanding at December 31, 2025	13	$	57.77	4.90	$	567
Vested and expected to vest at December 31, 2025	13	$	57.77	4.90	$	567
Vested and exercisable at December 31, 2025	11	$	53.74	4.08	$	496

The aggregate intrinsic value in the table above represents the difference between CSC’s closing stock price and the exercise price of each in-the-money option on the last trading day of the period presented.


Year Ended December 31,	2025		2024		2023
Weighted-average fair value of options granted per share	$	21.99	$	19.08	$	19.72
Cash received from options exercised	156		84		49
Tax benefit realized on options exercised	32		17		12
Aggregate intrinsic value of options exercised	178		98		62

We use an option pricing model to estimate the fair value of options granted. The model takes into account the contractual term of the stock option, expected volatility, dividend yield, and the risk-free interest rate. Expected volatility is based on the implied volatility of publicly-traded options on CSC’s stock. Dividend yield is based on the average historical CSC dividend yield. The risk-free interest rate is based on the yield of a U.S. Treasury zero-coupon issue with a remaining term similar to the contractual term of the option. We use historical option exercise data, which includes employee termination data, to estimate the probability of future option exercises. The assumptions used to value the options granted during the years presented and their expected lives were as follows:


Year Ended December 31,	2025		2024		2023
Weighted-average expected dividend yield	1.53	%	1.70	%	1.70	%
Weighted-average expected volatility	30	%	30	%	31	%
Weighted-average risk-free interest rate	3.7	%	3.9	%	3.9	%
Expected life (in years)	4.1 - 5.2		4.1 - 5.2		4.1 - 5.3

Restricted stock units are awards that entitle the holder to receive shares of CSC’s common stock following a vesting period and are restricted from transfer or sale until vested. Restricted stock units without performance conditions generally vest annually over a one- to four-year period, while performance-based restricted stock units generally cliff vest over a three-year period and also require the Company to achieve certain financial or other measures prior to vesting. The fair value of restricted stock units is based on the market price of the Company’s stock on the date of grant. The fair value of the restricted stock units that vested during each of the years 2025, 2024, and 2023 was $295 million, $281 million, and $288 million, respectively.


	Restricted Stock Units Without Performance Conditions (in millions)	Performance-Based Restricted Stock Units (in millions)	Total Number of Restricted Stock Units (in millions)	Weighted- Average Grant Date Fair Value per Unit
Outstanding at December 31, 2024	8	2	10	$	72.10

Granted (1)	3	—	3	79.07
Vested	(3)	(1)	(4)	73.50
Forfeited (1)	—	—	—	73.30
Outstanding at December 31, 2025	8	1	9	$	74.20

Employees can participate in Schwab’s qualified retirement plan, the SchwabPlan Retirement Savings and Investment Plan. The Company may match certain employee contributions or make additional contributions to this plan at its discretion. The Company’s total expense was $238 million, $219 million, and $233 million in 2025, 2024, and 2023, respectively.

Schwab’s deferred compensation plan for certain eligible employees permits participants to defer the receipt of certain cash compensation. The deferred compensation plan for non-employee directors permits participants to defer receipt of all or a portion of their cash compensation and to receive either a grant of stock options or restricted stock units. The deferred compensation liability was $283 million and $251 million at December 31, 2025 and 2024, respectively.

The financial consultant career achievement plan is a noncontributory, unfunded, nonqualified plan for eligible financial consultants. A financial consultant is eligible for earned cash payments after retirement contingent upon meeting certain performance levels, tenure, age, and client transitioning requirements. Allocations to the plan are calculated annually based on performance levels achieved and eligible compensation, and are subject to general creditors of the Company. Among other conditions, full vesting occurs when a financial consultant reaches 60 years of age and has at least ten years of service with the Company.


	2025		2024
Projected benefit obligation at beginning of year	$	134	$	125
Benefit cost (1)	17		17
Actuarial loss (gain) (2)	12		(8)
Projected benefit obligation at end of year (3)	$	163	$	134

(1) Includes service cost and interest cost, which are recognized in compensation and benefits expense and other expense, respectively, in the consolidated statements of income.

(2) Actuarial loss (gain) is reflected in the consolidated statements of comprehensive income and is included in AOCI on the consolidated balance sheets. The portion, if any, beyond certain thresholds is subsequently amortized over the participants’ expected remaining service period into other expense on the consolidated statements of income.