Stock Purchase and Award Plans

12 Months Ended

Apr. 25, 2025

Share-Based Payment Arrangement [Abstract]

In fiscal year 2025, the Company granted stock awards under the 2021 Medtronic plc Long Term Incentive Plan (2021 Plan). The 2021 Plan provides for the grant of non-qualified and incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, and other stock and cash-based awards. At April 25, 2025, there were approximately 67 million shares available for future grants under the 2021 Plan.

Stock-Based Compensation Expense The following table presents the components and classification of stock-based compensation expense recognized for stock options, restricted stock, performance share units, and employee stock purchase plan (ESPP) in fiscal years 2025, 2024, and 2023:


	Fiscal Year
(in millions)	2025		2024		2023
Stock options	$	66	$	76	$	77
Restricted stock	216		184		166
Performance share units	111		97		74
Employee stock purchase plan	35		36		38
Total stock-based compensation expense	$	429	$	393	$	355

Cost of products sold	$	46	$	35	$	36
Research and development expense	52		47		39
Selling, general, and administrative expense	331		310		280
Total stock-based compensation expense	429		393		355
Income tax benefits	(70)		(64)		(60)
Total stock-based compensation expense, net of tax	$	358	$	329	$	295

Stock Options Options are granted at the exercise price, which is equal to the closing price of the Company’s ordinary shares on the grant date. The majority of the Company’s options are non-qualified options with a ten-year life and a four-year ratable vesting term. The Company uses the Black-Scholes option pricing model (Black-Scholes model) to determine the fair value of stock options at the grant date. The fair value of stock options under the Black-Scholes model requires management to make assumptions regarding projected employee stock option exercise behaviors, risk-free interest rates, volatility of the Company’s stock price, and expected dividends. Expected volatility is based on a blend of historical volatility and an implied volatility of the Company’s ordinary shares. Implied volatility is based on market traded options of the Company’s ordinary shares.

The following table provides the weighted average fair value of options granted to employees and the related assumptions used in the Black-Scholes model:


	Fiscal Year
	2025			2024			2023
Weighted average fair value of options granted	$	16.43		$	18.49		$	17.76
Assumptions used:
Expected life (years)	6.1			6.1			6.0
Risk-free interest rate	4.07		%	4.16		%	2.70		%
Volatility	24.47		%	24.29		%	24.05		%
Dividend yield	3.48		%	3.18		%	2.92		%

The following table summarizes stock option activity during fiscal year 2025:


	Options (in thousands)	Wtd. Avg. Exercise Price		Wtd. Avg. Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at April 26, 2024	32,339	$	93.32
Granted	3,414	80.61
Exercised	(6,058)	77.30
Expired/Forfeited/Cancelled	(1,928)	96.31
Outstanding at April 25, 2025	27,766	95.04		5.2	$	22
Expected to vest at April 25, 2025	7,764	88.49		8.3	14
Exercisable at April 25, 2025	19,467	97.93		3.9	7

The following table summarizes the total cash received from the issuance of new shares upon stock option award exercises, the total intrinsic value of options exercised, and the related tax benefit during fiscal years 2025, 2024, and 2023:


	Fiscal Year
(in millions)	2025		2024		2023
Cash proceeds from options exercised	$	305	$	78	$	77
Intrinsic value of options exercised	66		28		42
Tax benefit related to options exercised	14		6		9

Unrecognized compensation expense related to outstanding stock options at April 25, 2025 was $66 million and is expected to be recognized over a weighted average period of 2.3 years.

Restricted Stock Restricted stock units are expensed over the vesting period and are subject to forfeiture if employment terminates prior to the lapse of the restrictions. The expense recognized for restricted stock units is equal to the grant date fair value, which is equal to the closing stock price on the date of grant. The majority of the Company's restricted stock units either have a four-year ratable vesting term or cliff vest after three years. Restricted stock units are not considered issued or outstanding ordinary shares of the Company. Dividend equivalent units are accumulated on restricted stock units during the vesting period.

The following table summarizes restricted stock activity during fiscal year 2025:


	Units (in thousands)	Wtd. Avg. Grant Price
Nonvested at April 26, 2024	6,142	$	92.57
Granted	4,207	82.37
Vested	(2,068)	99.19
Forfeited/Cancelled	(636)	88.62
Nonvested at April 25, 2025	7,644	85.64

The following table summarizes the weighted-average grant date fair value of restricted stock granted, total fair value of restricted stock vested and related tax benefit during fiscal years 2025, 2024, and 2023:


	Fiscal Year
(in millions, except per share data)	2025		2024		2023
Weighted-average grant-date fair value per restricted stock	$	82.37	$	82.80	$	91.83
Fair value of restricted stock vested	205		186		256
Tax benefit related to restricted stock vested	33		29		45

Unrecognized compensation expense related to restricted stock as of April 25, 2025 was $414 million and is expected to be recognized over a weighted average period of 2.6 years.

Performance Share Units Performance share units typically cliff vest after three years. The awards include three metrics: relative total shareholder return (rTSR), revenue growth, and return on invested capital (ROIC). rTSR is considered a market condition metric, and the expense is determined at the grant date and will not be adjusted even if the market condition is not met. Revenue growth and ROIC are considered performance metrics, and the expense is recorded over the performance period, which will be reassessed each reporting period based on the probability of achieving the various performance conditions. The number of shares earned at the end of the three-year period will vary, based on only actual performance, from 0% to 200% of the target number of performance share units granted. Performance share units are subject to forfeiture if employment terminates prior to the lapse of the restrictions. Performance share units are not considered issued or outstanding ordinary shares of the Company. Dividend equivalent units are accumulated on performance share units for each component of the award during the vesting period.

The Company calculates the fair value of the performance share units for each component individually. The fair value of the rTSR metric will be determined using the Monte Carlo valuation model. The fair value of the revenue growth and ROIC metrics are equal to the closing stock price on the grant date.

The following table summarizes performance share unit activity during fiscal year 2025:


	Units (in thousands)	Wtd. Avg. Grant Price
Nonvested at April 26, 2024	2,422	$	106.50
Granted	1,444	98.49
Vested	(260)	147.85
Performance adjustments (1)	(256)	97.75
Forfeited/Cancelled	(209)	103.56
Nonvested at April 25, 2025	3,141	100.51

(1)Performance adjustments are adjustments to grants where the performance period has ended and actual performance is known.

The following table summarizes the weighted-average grant date fair value of performance share units granted, total fair value of performance share units vested and related tax benefit during fiscal year 2025, 2024, and 2023:


	Fiscal Year
(in millions, except per share data)	2025		2024		2023
Weighted-average grant-date fair value per performance share units	$	98.49	$	104.78	$	98.17
Fair value of performance share units vested	38		78		—
Tax benefit related to performance share units vested	3		3		—

Unrecognized compensation expense related to performance share units as of April 25, 2025 was $90 million and is expected to be recognized over a weighted average period of 1.6 years.

Employees Stock Purchase Plan (ESPP) The Medtronic plc 2024 Employee Stock Purchase Plan allows participating employees to purchase the Company's ordinary shares at a discount through payroll deductions. The expense recognized for shares purchased under the Company’s ESPP is equal to the 15 percent discount the employee receives. Employees purchased 3 million shares at an average price of $72.27 per share in fiscal year 2025. At April 25, 2025, approximately 26 million ordinary shares were available for future purchase under the ESPP.