American Airlines Group Inc.AAL
American Airlines Group Inc. Stock Compensation Disclosure
Share-based Compensation
In May 2023, the stockholders of AAG approved the 2023 Incentive Award Plan (the 2023 Plan). The 2023 Plan replaces and supersedes AAG’s 2013 Incentive Award Plan (the 2013 Plan). No further awards will be granted under the 2013 Plan; however, the terms and conditions of the 2013 Plan will continue to govern any outstanding awards granted thereunder. The 2023 Plan provides that an award may be in the form of a stock option, including an incentive stock option and nonqualified stock option, stock appreciation right, restricted stock, restricted stock unit, performance bonus award, performance stock unit, other stock or cash-based award and dividend equivalent to eligible individuals.
The 2023 Plan authorizes the grant of awards for the issuance of 17.2 million shares less any shares granted under the 2013 Plan after March 22, 2023, the date the Board of Directors of AAG approved the 2023 Plan. Any shares underlying awards granted under the 2023 Plan or 2013 Plan that are forfeited, terminate or are settled in cash (in whole or in part) without the delivery of shares will again be available for grant under the 2023 Plan.
Share-based compensation expense for American’s equity awards, including awards settled in AAG common stock or cash, was $106 million, $124 million and $97 million for the years ended December 31, 2025, 2024 and 2023, respectively, and is included in salaries, wages and benefits on its consolidated statements of operations.
During 2025, 2024 and 2023, AAG withheld approximately 2.0 million, 1.6 million and 1.5 million shares of AAG common stock, respectively, and paid approximately $28 million, $27 million and $23 million, respectively, in satisfaction of certain tax withholding obligations associated with employee equity awards.
Restricted Stock Unit Awards (RSUs)
AAG has granted RSUs with service conditions (time vested primarily over three years) and performance conditions. The grant-date fair value of these RSUs is equal to the market price of the underlying shares of AAG common stock on the date of grant. For time vested awards, the expense is recognized on a straight-line basis over the vesting period for the entire award. For awards with performance conditions, the expense is recognized based on the expected achievement at each reporting period. Stock-settled RSUs are equity-classified as the vesting results in the issuance of shares of AAG common stock. Cash-settled restricted stock unit awards (CRSUs) are liability-classified as the vesting results in payment of cash by AAG.
Stock-settled RSU award activity for all plans for the years ended December 31, 2025, 2024 and 2023 is as follows:
| Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
| (In thousands) | |||||||||||
| Outstanding at December 31, 2022 | 10,263 | $ | 17.51 | ||||||||
| Granted | 9,834 | 14.54 | |||||||||
| Vested and released | (5,161) | 17.81 | |||||||||
| Forfeited | (701) | 20.49 | |||||||||
| Outstanding at December 31, 2023 | 14,235 | $ | 15.18 | ||||||||
| Granted | 2,580 | 15.76 | |||||||||
Modified (1) | (2,809) | 16.18 | |||||||||
| Vested and released | (4,833) | 15.91 | |||||||||
| Forfeited | (827) | 15.83 | |||||||||
| Outstanding at December 31, 2024 | 8,346 | $ | 15.59 | ||||||||
| Granted | 5,073 | 14.11 | |||||||||
| Vested and released | (3,949) | 15.27 | |||||||||
| Forfeited | (2,337) | 15.33 | |||||||||
| Outstanding at December 31, 2025 | 7,133 | $ | 14.27 | ||||||||
(1)In 2024, the settlement terms of 2.8 million stock-settled RSUs were modified from settlement in AAG common stock to settlement in cash. This change in award settlement method was the only modification to these awards, and the vesting, forfeiture and all other terms and conditions were unchanged. The modification resulted in a $20 million reclassification from additional paid-in capital to accrued salaries and wages on American’s consolidated balance sheet.
As of December 31, 2025, there was $51 million of unrecognized compensation cost related to stock-settled RSUs. These costs are expected to be recognized over a weighted average period of one year. The total fair value of stock-settled RSUs vested during the years ended December 31, 2025, 2024 and 2023 was $57 million, $69 million and $78 million, respectively.
CRSU award activity for all plans for the years ended December 31, 2025 and 2024 is as follows:
| Number of Shares | Weighted Average Fair Value | ||||||||||
| (In thousands) | |||||||||||
| Outstanding at December 31, 2023 | 37 | $ | 13.74 | ||||||||
| Granted | 5,634 | 17.43 | |||||||||
Modified (1) | 2,809 | 16.18 | |||||||||
| Vested and released | (1,337) | 14.75 | |||||||||
| Forfeited | (136) | 17.42 | |||||||||
| Outstanding at December 31, 2024 | 7,007 | $ | 17.43 | ||||||||
| Granted | 6,009 | 15.33 | |||||||||
| Vested and released | (2,606) | 16.43 | |||||||||
| Forfeited | (547) | 15.60 | |||||||||
| Outstanding at December 31, 2025 | 9,863 | $ | 15.33 | ||||||||
(1)In 2024, the settlement terms of 2.8 million stock-settled RSUs were modified from settlement in AAG common stock to settlement in cash. See table above for further discussion.
As of December 31, 2025 and 2024, the liability related to CRSUs was $53 million and $39 million, respectively. The CRSU related liability is remeasured at fair value at each reporting date until all awards are vested. As of December 31, 2025, there was $91 million of unrecognized compensation cost related to CRSUs. These costs are expected to be recognized over a weighted average period of one year. The total cash paid for CRSUs vested during the years ended December 31, 2025 and 2024 was $37 million and $18 million, respectively.
For the year ended December 31, 2023, CRSU award activity was nominal.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 17, 2021 | |
| 2019 | Feb 19, 2020 | |
| 2018 | Feb 25, 2019 | |
| 2017 | Feb 21, 2018 | |
| 2016 | Feb 22, 2017 | |
| 2015 | Feb 24, 2016 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.