Share-Based Compensation (Tables)

12 Months Ended

Jan. 03, 2026

Compensation expense included in net income for our share-based compensation plans is as follows:


(In millions)	2025		2024		2023
Compensation expense	$	81	$	66	$	94
Income tax benefit	(20)		(16)		(23)
Total compensation expense included in net income	$	61	$	50	$	71

The assumptions used in our option-pricing model for these grants and the weighted-average fair value for these options are as follows:


	2025		2024		2023
Fair value of options at grant date	$	22.01	$	27.69	$	23.83
Dividend yield	0.1%		0.1%		0.1%
Expected volatility	25.1%		27.2%		29.4%
Risk-free interest rate	4.1%		4.3%		4.2%
Expected term (in years)	4.8		4.8		4.8

The stock option activity during 2025 is provided below:


(Options in thousands)	Number of Options	Weighted- Average Exercise Price
Outstanding at beginning of year	6,649	$	61.70
Granted	1,022	74.73
Exercised	(809)	(52.23)
Forfeited or expired	(70)	(79.25)
Outstanding at end of year	6,792	$	64.61
Exercisable at end of year	4,791	$	58.58

The 2025 activity for restricted stock units is provided below:


	Units Payable in Stock			Units Payable in Cash
(Shares/Units in thousands)	Number of Shares	Weighted- Average Grant Date Fair Value		Number of Units	Weighted- Average Grant Date Fair Value
Outstanding at beginning of year, nonvested	331	$	75.50	631	$	77.75
Granted	129	73.07		259	74.72
Vested	(101)	(70.65)		(195)	(71.14)
Forfeited	—	—		(22)	(78.39)
Outstanding at end of year, nonvested	359	$	75.99	673	$	78.48

The fair value of the restricted stock unit awards that vested and/or amounts paid under these awards is as follows:

The fair value of the performance share units that vested and/or amounts paid under these awards is as follows:

The 2025 activity for our performance share units is as follows:


(Units in thousands)	Number of Units	Weighted- Average Grant Date Fair Value
Outstanding at beginning of year, nonvested	394	$	80.81
Granted	202	74.73
Vested	(200)	(73.19)

Outstanding at end of year, nonvested	396	$	81.57