AGCO CORP /DEAGCO
AGCO CORP /DE Stock Compensation Disclosure
STOCK COMPENSATION PLANS
The Company recorded stock compensation expense as follows for the years ended December 31, 2025, 2024 and 2023 (in millions):
| Years Ended December 31, | |||||||||||||||||
2025(1) | 2024(1) | 2023 | |||||||||||||||
| Cost of goods sold | $ | 0.9 | $ | 0.5 | $ | 1.8 | |||||||||||
| Selling, general and administrative expenses | 27.7 | 17.9 | 44.6 | ||||||||||||||
| Total stock compensation expense | $ | 28.6 | $ | 18.4 | $ | 46.4 | |||||||||||
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(1) The years ended December 31, 2025 and 2024 include approximately $3.0 million and $6.5 million, respectively, of compensation expense related to PTx Trimble employees vesting in legacy Trimble awards.
The Company recognizes the effect of award forfeitures as an adjustment to stock compensation expense in the period in which the forfeiture occurs.
Stock Incentive Plan
Under the Company's 2006 Long-Term Incentive Plan (“the Plan”), up to 10,000,000 shares of AGCO’s common stock may be issued. As of December 31, 2025, of the 10,000,000 shares reserved for issuance under the Plan, approximately 3,220,463 shares remained available for grant, assuming the maximum number of shares are earned related to the performance award grants discussed below. The Plan allows the Company, under the direction of the Board of Directors’ Talent and Compensation Committee, to make grants of performance shares, stock appreciation rights (“SSARs”), restricted stock units and restricted stock awards to employees, officers and non-employee directors of the Company.
Long-Term Incentive Plan and Related Performance Awards
The Company’s primary long-term incentive plan is a performance share plan that provides for awards of shares of the Company’s common stock based on achieving financial targets, such as targets for return on net assets and revenue growth, as determined by the Company’s Board of Directors. Performance periods for the Company’s primary long-term incentive plan are consecutive and overlapping three-year cycles, and performance targets are set at the beginning of each cycle. The primary long-term incentive plan provides for participants to earn 16.5% to 200% of the target awards depending on the actual performance achieved, with no shares earned if performance is below the established minimum target. Awards earned under the Plan are paid in shares of common stock at the end of each three-year performance period. The percentage level achievement is determined annually or over the three-year cycle in aggregate, with the ultimate award that is earned determined based upon the average of the three annual percentages. The grant of performance award shares is subject to a total shareholder return modifier. The compensation expense associated with these awards is amortized ratably over the vesting or performance period based on the Company’s projected assessment of the level of performance that will be achieved and earned.
During 2025, the Company granted performance awards covering up to 441,212 shares, assuming the Company achieves maximum levels of performance related to varying performance periods. Compensation expense recorded during 2025, 2024 and 2023 with respect to awards granted was based upon the fair value as of the grant date. The award included a market condition and the Company measured the fair value using a Monte Carlo simulation. The weighted average grant-date fair value of performance awards granted under the Plan during 2025, 2024 and 2023 was as follows:
| Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Weighted average grant-date fair value | $ | 108.20 | $ | 126.95 | $ | 143.63 | ||||||||||||||
Performance award transactions during 2025 were as follows and are presented as if the Company were to achieve its maximum levels of performance under the plan:
| Performance awards | Weighted-Average Grant Date Fair Value | ||||||||||
| Shares awarded but not earned at January 1 | 570,150 | $ | 134.26 | ||||||||
| Shares awarded | 441,212 | 108.20 | |||||||||
| Shares forfeited | (65,636) | 126.51 | |||||||||
| Shares vested or earned | (226,094) | 143.61 | |||||||||
| Shares awarded but not earned at December 31 | 719,632 | $ | 116.05 | ||||||||
Based on the level of performance achieved as of December 31, 2025, 27,052 shares were earned under the related performance period. 16,650 shares were issued in February 2026, net of 10,402 shares that were withheld for taxes related to the earned awards. The Plan allows for the participant to have the option of forfeiting a portion of the shares awarded in lieu of a cash payment contributed to the participant’s tax withholding to satisfy the participant’s statutory minimum federal, state and employment taxes which would be payable at the time of grant.
As of December 31, 2025, the total compensation cost related to unearned performance awards not yet recognized, assuming the Company’s current projected assessment of the level of performance that will be achieved, was approximately $29.8 million, and the weighted average period over which it is expected to be recognized is approximately two years. This estimate is based on the current projected levels of performance of outstanding awards. The compensation cost not yet recognized could be higher or lower based on actual achieved levels of performance.
Restricted Stock Units (“RSUs”)
RSU awards granted under the Plan do not entitle recipients to vote or receive dividends during the vesting period and will be forfeited in the event of the recipient’s termination of employment, except for certain circumstances. The fair value of restricted stock and restricted stock units is the closing market price per share of the Company’s stock on the grant date less the present value of the expected dividends not received during the vesting period.
The weighted average grant-date fair value of the RSUs granted under the Plan during 2025, 2024 and 2023 was as follows:
| Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Weighted average grant-date fair value | $ | 101.91 | $ | 114.07 | $ | 134.63 | ||||||||||||||
During the year ended December 31, 2025, the Company granted 172,027 RSU awards. These awards entitle the participant to receive one share of the Company’s common stock for each RSU granted and vest one-third per year over a three-year requisite service period. The compensation expense associated with all RSU awards is being amortized ratably over the requisite service period for the awards that are expected to vest. RSU transactions during the year ended December 31, 2025 were as follows:
| RSUs | Weighted-Average Grant Date Fair Value | ||||||||||
| Shares awarded but not vested at January 1 | 269,202 | $ | 118.29 | ||||||||
Shares awarded | 172,027 | 101.91 | |||||||||
| Shares forfeited | (22,325) | 112.15 | |||||||||
| Shares vested | (125,759) | 117.51 | |||||||||
| Shares awarded but not vested at December 31 | 293,145 | $ | 109.50 | ||||||||
During January 2026, 65,049 RSUs were issued, net of 41,119 shares that were withheld for taxes. The Plan allows for the participant to have the option of forfeiting a portion of the shares awarded in lieu of a cash payment contributed to the participant’s tax withholding to satisfy the participant’s statutory minimum federal, state and employment taxes which would be payable at the time of grant. As of December 31, 2025, the total compensation cost related to the unvested RSUs not yet recognized was approximately $19.2 million, and the weighted average period over which it is expected to be recognized is approximately one and one-half years.
2026 Awards
On January 28, 2026, the Company granted 228,993 performance award shares (subject to the Company achieving future target levels of performance) and 197,162 RSUs under the Plan. The performance award shares are subject to a total shareholder return modifier.
Director Restricted Stock Grants
Pursuant to the Plan, all non-employee directors receive annual restricted stock grants of the Company’s common stock. All restricted stock grants made to the Company’s directors are restricted as to transferability for a period of one year. In the event a director departs from the Company’s Board of Directors, the non-transferability period expires immediately. The plan allows each director to have the option of forfeiting a portion of the shares awarded in lieu of a cash payment contributed to the participant’s tax withholding to satisfy the statutory minimum federal, state and employment taxes that would be payable at the time of grant. The 2025 grant was made on April 24, 2025, and equated to 17,256 shares of common stock, of which 16,738 shares of common stock were issued, after shares were withheld for taxes. The Company recorded stock compensation expense of approximately $1.5 million during 2025 associated with these grants.
Employee Stock Purchase Plan
The Company's Stock Purchase Plan (“ESPP”) provides employees of the Company and its participating subsidiaries
and affiliates an opportunity to purchase shares of the Company's common stock at a 10% discount using the Company's share price on the last trading day of the six-month offering period. Participants can contribute between 1% and 10% of their compensation. The ESPP was approved by the Company’s stockholders on April 24, 2025 and became effective with the first offering period under the plan commencing on July 1, 2025. A total of 4,000,000 shares were authorized to be issued.
As of December 31, 2025, the remaining shares authorized to be issued under the ESPP was approximately 4,000,000. The Company recorded stock compensation expense of approximately $0.2 million during 2025 associated with the ESPP.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 27, 2024 | |
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.