REGAL REXNORD CORP

9. SHAREHOLDERS’ EQUITY

Share-Based Compensation

Performance share unit awards ("PSUs") consist of the right to shares of the Company's stock awarded to associates of the Company. PSUs vest upon the Board of Director's approval of PSU metric achievement, generally in the first quarter after the conclusion of thethree-year overall performance period. PSUs are granted at performance target of 100%.

For the six months ended June 30, 2026, the Company issued 42,568 Performance Share Units ("2026 PSUs"). The 2026 PSUs includetwo performance metrics: Return on Invested Capital weighted at 75% and Revenue Growth weighted at 25%. The payout for each performance metric ranges from 0% to 200%. The 2026 PSUs also include a 20% modifier (increase or decrease) based on relative Total Shareholder Return (“rTSR”) as compared to the S&P 900 Industrials index, which allows for up to a maximum 240% total payout. The 2026 PSUs are valued using a Monte Carlo simulation model as of the grant date. As set forth in the individual grant agreements, acceleration of vesting may occur under a change in control, death or disability. There are no voting rights with these instruments until vesting occurs and a share of stock is issued.

The Company recognized approximately $2.3 million and $10.3 million in share-based compensation expense for the three months ended June 30, 2026 and June 30, 2025, respectively, and approximately $10.4 million and $19.8 million for the six months ended June 30, 2026 and June 30, 2025, respectively. The total income tax benefit recognized in the Condensed Consolidated Statements of Income for share-based compensation expense was $0.0 million and $1.6 million for the three months ended June 30, 2026 and June 30, 2025, respectively, and $5.3 million and $2.7 million for the six months ended June 30, 2026 and June 30, 2025, respectively. The Company recognizes compensation expense on grants of share-based compensation awards on a straight-line basis over the vesting period of each award.

During thesix months ended June 30, 2026, the Company granted the following share-based incentive awards: