Aggregate value of shares withheld to satisfy tax requirement

[Table of Conten](#i207805ce14724a60909000a6c8cb9e11_7)[t](#i207805ce14724a60909000a6c8cb9e11_7)[s](#i207805ce14724a60909000a6c8cb9e11_7)thousand shares of Fortive common stock with an aggregate value of approximately $17 million, were withheld to satisfy this requirement. The tax withholding is treated as a reduction in Additional paid-in capital in the Consolidated Statement of Changes in Equity.Stock-based Compensation ExpenseStock-based compensation has been recognized as a component of Selling, general, and administrative expenses in the Consolidated Statements of Earnings. The amount of stock-based compensation expense recognized during a period is based on the portion of the awards that are ultimately expected to vest. We estimate pre-vesting forfeitures at the time of grant by analyzing historical data and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the total expense recognized over the vesting period will equal the fair value of awards that actually vest. The following summarizes the components of our stock-based compensation expense under the Stock Plan for the years ended December 31 ($ in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   | 2021 |  | 2020 |  | 2019 |
| Stock Awards: |  |  |  |  |  |
| Pretax compensation expense | $ | 48.6  |  |  | $ | 38.6  |  |  | $ | 34.1  |  |
| Income tax benefit | (7.9) |  |  | (6.0) |  |  | (6.6) |  |
| Stock Award expense, net of income taxes | 40.7  |  |  | 32.6  |  |  | 27.5  |  |
| Stock options: |  |  |  |  |  |
| Pretax compensation expense | 28.8  |  |  | 24.0  |  |  | 18.4  |  |
| Income tax benefit | (5.0) |  |  | (3.7) |  |  | (2.8) |  |
| Stock option expense, net of income taxes | 23.8  |  |  | 20.3  |  |  | 15.6  |  |
| Total stock-based compensation: |  |  |  |  |  |
| Pretax compensation expense | 77.4  |  |  | 62.6  |  |  | 52.5  |  |
| Income tax benefit | (12.9) |  |  | (9.7) |  |  | (9.4) |  |
| Total stock-based compensation expense, net of income taxes | $ | 64.5  |  |  | $ | 52.9  |  |  | $ | 43.1  |  |

When stock options are exercised by the employee or Stock Awards vest, we derive a tax deduction measured by the excess of the market value on such date over the grant date price. Accordingly, we record the excess of the tax benefit related to the exercise of stock options and vesting of Stock Awards over the expense recorded for financial statement reporting purposes (the “Excess Tax Benefit”) as a component of Income tax expense and as an operating cash inflow in the consolidated financial statements. During the years ended December 31, 2021, 2020, and 2019 we realized an Excess Tax Benefit of $10 million, $13 million, and $10 million, respectively, related to stock options that were exercised and Stock Awards that vested. The following summarizes the unrecognized compensation cost for the Stock Plan awards as of December 31, 2021. This compensation cost is expected to be recognized over a weighted average period of approximately two years, representing the remaining service period related to the awards. Future compensation amounts will be adjusted for any changes in estimated forfeitures ($ in millions):

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Stock Awards | $ | 83.6  |  |
| Stock options | 48.4  |  |
| Total unrecognized compensation cost | $ | 132.0  |  |

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