ALAMO GROUP INCALG
ALAMO GROUP INC Stock Compensation Disclosure
STOCK OPTIONS
Incentive Stock Option Plan
On May 8, 2025, the stockholders of the Company approved the 2025 Incentive Stock Option Plan (“2025 ISO Plan”) and the Company reserved 300,000 shares of common stock for options to be issued under the 2025 ISO Plan. Each option becomes vested and exercisable for up to 20% of the total optioned shares one year following the grant of the option and for an additional 20% of the total optioned shares after each succeeding year until the option is fully exercisable at the end of the fifth year.
We also maintain other incentive option plans that have expired, under which previously granted awards remain outstanding. No additional grants may be awarded under these plans.
Following is a summary of activity in the Incentive Stock Option Plans for the periods indicated:
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Shares | Exercise Price* | Shares | Exercise Price* | Shares | Exercise Price* | ||||||||||||||||||||||||||||||
| Options outstanding at beginning of year | 69,052 | $ | 150.74 | 75,862 | $ | 128.64 | 84,647 | $ | 106.43 | ||||||||||||||||||||||||||
| Granted | 15,060 | 174.81 | 17,519 | 203.55 | 14,425 | 178.25 | |||||||||||||||||||||||||||||
| Exercised | (12,970) | 119.64 | (18,430) | 103.81 | (21,260) | 72.09 | |||||||||||||||||||||||||||||
| Canceled | (6,510) | 182.30 | (5,899) | 169.97 | (1,950) | 148.08 | |||||||||||||||||||||||||||||
| Options outstanding at end of year | 64,632 | 159.41 | 69,052 | 150.74 | 75,862 | 128.64 | |||||||||||||||||||||||||||||
| Options exercisable at end of year | 30,615 | $ | 138.84 | 29,757 | $ | 118.60 | 34,027 | $ | 100.00 | ||||||||||||||||||||||||||
| Options available for grant at end of year | 300,000 | 261,888 | 273,558 | ||||||||||||||||||||||||||||||||
*Weighted Averages
Options outstanding and exercisable at December 31, 2025 were as follows:
| Qualified Stock Options | Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||
Shares | Remaining Contractual Life (yrs)* | Exercise Price* | Shares | Exercise Price* | |||||||||||||||||||||||||
| Range of Exercise Price | |||||||||||||||||||||||||||||
$54.87 - $83.99 | 2,100 | 0.91 | $ | 75.67 | 2,100 | $ | 75.67 | ||||||||||||||||||||||
$92.50 - $137.93 | 19,351 | 4.53 | $ | 122.77 | 15,241 | $ | 118.68 | ||||||||||||||||||||||
$156.38 - $203.55 | 43,181 | 7.29 | $ | 179.91 | 13,274 | $ | 171.98 | ||||||||||||||||||||||
| Total | 64,632 | 30,615 | |||||||||||||||||||||||||||
*Weighted Averages
The weighted-average grant-date fair values of options granted during 2025, 2024, and 2023 were $72.36, $86.89 and $76.10, respectively. Stock option expense was $0.9 million, $0.9 million and $0.8 million for years ending 2025, 2024, and 2023, respectively. As of December 31, 2025, there was $1.6 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a period of five years.
Equity Incentive Plan
On May 2, 2019, the stockholders of the Company approved the 2019 Equity Incentive Plan and the Company reserved 500,000 shares of common stock for issuance of equity awards including the issuance of non-qualified options for the purchase of shares of our common stock which may be granted to Company officers and non-employee directors. Options become vested and exercisable for up to 20% of the total optioned shares one year following the grant of the option and for an additional 20% of the total optioned shares after each succeeding year until the option is fully exercisable at the end of the fifth year.
2025 | 2024 | 2023 | |||||||||
| Options available for grant at end of year | 287,398 | 321,669 | 356,156 | ||||||||
We also maintain other incentive option plans that have expired, under which previously granted awards remain outstanding. No additional grants may be awarded under these plans.
Non-Qualified Options
Following is a summary of activity in the Non-Qualified Stock Option Plans for the periods indicated:
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Shares | Exercise Price* | Shares | Exercise Price* | Shares | Exercise Price* | ||||||||||||||||||||||||||||||
| Options outstanding at beginning of year | — | $ | — | — | $ | — | 1,000 | $ | 53.51 | ||||||||||||||||||||||||||
| Granted | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Exercised | — | — | — | — | (1,000) | 53.51 | |||||||||||||||||||||||||||||
| Canceled | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Options outstanding at end of year | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Options exercisable at end of year | — | $ | — | — | $ | — | — | $ | — | ||||||||||||||||||||||||||
*Weighted Averages
Restricted Stock Awards/Units
Following is a summary of activity in the Restricted Stock Awards ("RSA")/Units for the periods indicated:
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| Shares | Grant-Date Fair Value* | Shares | Grant-Date Fair Value* | Shares | Grant-Date Fair Value* | ||||||||||||||||||||||||
| Awards outstanding at beginning of year | 93,768 | $ | 180.18 | 93,978 | $ | 158.99 | 97,630 | $ | 133.67 | ||||||||||||||||||||
| Granted | 65,948 | 185.50 | 49,270 | 181.78 | 45,267 | 178.66 | |||||||||||||||||||||||
| Exercised | (58,373) | 170.53 | (44,535) | 127.51 | (33,847) | 129.51 | |||||||||||||||||||||||
| Canceled | (17,296) | 183.08 | (4,945) | 121.34 | (15,072) | 118.97 | |||||||||||||||||||||||
| Awards outstanding at end of year | 84,047 | $ | 190.31 | 93,768 | $ | 180.18 | 93,978 | $ | 158.99 | ||||||||||||||||||||
*Weighted Averages
Restricted stock awards vest over a three year period. The weighted-average remaining contractual life in years for 2025, 2024 and 2023 was 1.56, 1.33 and 1.51, respectively. Compensation expense was $9.0 million, $8.2 million and $6.6 million for years ending 2025, 2024, and 2023, respectively. As of December 31, 2025, there was $8.8 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a period of three years.
Performance Stock Units
In 2020, the Company's Board of Directors approved a change to our long-term incentive compensation plan to implement new performance-based equity grants in the form of a Performance Stock Unit ("PSU") award. PSU award vesting and payout amounts are tied to the Company's achievement of certain targeted financial metrics relating to a three-year performance period with the goal of more closely aligning executive compensation with long-term Company performance.
The 2020 target long-term incentive compensation mix established for the Company's Section 16 filers consists of RSAs and PSUs each representing fifty percent (50%) of the total long-term incentive compensation target value. PSU awards represent a right to receive a certain number of shares of the Company’s common stock at the end of the three-year performance period if certain financial or other performance targets/metrics have been met.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2017 | Mar 1, 2018 | |
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.