Amneal Pharmaceuticals, Inc.AMRX
Amneal Pharmaceuticals, Inc. Stock Compensation Disclosure
Stock-Based Compensation
Amneal Pharmaceuticals, Inc. 2018 Incentive Award Plan
In May 2018, the Company adopted the Amneal Pharmaceuticals, Inc. 2018 Incentive Award Plan (“2018 Plan”) under which the Company may grant stock options, restricted stock units and other equity-based awards to employees and non-employee directors providing services to the Company and its subsidiaries. The stock option, RSU and MPRSU award grants are made in accordance with the Company’s 2018 Plan and are subject to forfeiture if the vesting conditions are not met. On May 5, 2020, the stockholders of the Company approved an amendment to the 2018 Plan, which authorized an additional 14 million shares of Class A common stock available for issuance under the 2018 Plan. On May 9, 2023, the stockholders of the Company approved an amendment and restatement of the 2018 Plan, which authorized an additional 20 million shares of Class A common stock available for issuance under the 2018 Plan, resulting in a total shares reserved under the Stock Plan of 57 million shares, and extending the term of the 2018 Plan until May 9, 2033. As of December 31, 2025, the Company had 21,516,665 shares available for issuance under the 2018 Plan.
The Company recognizes the grant date fair value of each option and share of restricted stock unit over its vesting period. Stock options and RSU awards are granted under the Company’s 2018 Plan and generally vest over a 4 year period and, in the case of stock options, have a term of 10 years.
The following table summarizes all of the Company’s stock option activity for the years ended December 31, 2025, 2024, and 2023:
| Stock Options | Number of Shares Under Option | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Life | Aggregate Intrinsic Value (in millions) | ||||||||||||||||||||||
| Outstanding at December 31, 2022 | 2,648,441 | $ | 4.38 | |||||||||||||||||||||||
| Options exercised | (163,824) | 2.75 | ||||||||||||||||||||||||
| Options forfeited | (68,252) | 2.75 | ||||||||||||||||||||||||
| Outstanding at December 31, 2023 | 2,416,365 | $ | 4.54 | 5.0 | $ | 6.6 | ||||||||||||||||||||
| Options exercised | (396,914) | 2.91 | ||||||||||||||||||||||||
| Outstanding at December 31, 2024 | 2,019,451 | $ | 4.86 | 4.0 | $ | 8.5 | ||||||||||||||||||||
| Options exercised | (712,069) | 2.75 | ||||||||||||||||||||||||
Options forfeited | (53,021) | 14.50 | ||||||||||||||||||||||||
| Outstanding at December 31, 2025 | 1,254,361 | $ | 5.65 | 2.9 | $ | 9.3 | ||||||||||||||||||||
| Options exercisable at December 31, 2025 | 1,254,361 | $ | 5.65 | 2.9 | $ | 9.3 | ||||||||||||||||||||
The intrinsic value of options exercised during the year ended December 31, 2025 was approximately $4.7 million. There were no options granted in the years ended December 31, 2025, 2024 and 2023.
The following table summarizes all of the Company's restricted stock unit activity for the years ended December 31, 2025, 2024, and 2023:
| Restricted Stock Units | Number of Restricted Stock Units | Weighted- Average Grant Date Fair Value | Weighted- Average Remaining Years | Aggregate Intrinsic Value (in millions) | ||||||||||||||||||||||
| Non-vested at December 31, 2022 | 17,928,613 | $ | 4.77 | |||||||||||||||||||||||
| Granted | 7,519,565 | 1.91 | ||||||||||||||||||||||||
| Vested | (3,888,602) | 4.53 | ||||||||||||||||||||||||
| Forfeited | (4,104,873) | 3.41 | ||||||||||||||||||||||||
| Non-vested at December 31, 2023 | 17,454,703 | $ | 3.92 | 1.2 | $ | 105.4 | ||||||||||||||||||||
| Granted | 7,268,315 | 5.40 | ||||||||||||||||||||||||
| Vested | (4,325,941) | 3.33 | ||||||||||||||||||||||||
| Forfeited | (2,820,894) | 6.12 | ||||||||||||||||||||||||
| Non-vested at December 31, 2024 | 17,576,183 | $ | 4.32 | 1.2 | $ | 139.2 | ||||||||||||||||||||
| Granted | 5,607,260 | 9.43 | ||||||||||||||||||||||||
| Vested | (6,540,039) | 5.02 | ||||||||||||||||||||||||
| Forfeited | (779,895) | 5.02 | ||||||||||||||||||||||||
| Non-vested at December 31, 2025 | 15,863,509 | $ | 5.81 | 1.1 | $ | 199.9 | ||||||||||||||||||||
The table above includes 1,968,698 MPRSUs granted to executives during March and July 2025. Vesting of the March 2025 awards is contingent upon the Company’s achievement of stock price hurdles over the performance period starting March 3, 2025 and requires the employee’s continued employment or service through February 28, 2028. Vesting of the July 2025 awards is contingent upon the Company’s achievement of stock price hurdles over the performance period starting July 15, 2025 and requires the employee’s continued employment or service through February 28, 2028. The MPRSUs cliff vest at the end of the three-year period and have a maximum potential to vest at 200% (3,937,396 shares), based on the Company’s stock price performance. The related share-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized straight-line over the vesting term. The estimated fair value per share of the MPRSUs ranged from $8.71 to $10.95 and was calculated using a Monte Carlo simulation model. 1,952,500 of these MPRSUs remained outstanding and unvested at December 31, 2025.
The table above includes 2,893,669 MPRSUs granted to executives during 2024. Vesting of these awards is contingent upon the Company’s achievement of stock price hurdles over the performance period starting March 4, 2024 and requires the employee’s
continued employment or service through February 28, 2027. The MPRSUs cliff vest at the end of the three-year period and have a maximum potential to vest at 200% (5,787,338 shares) based on the Company's stock price performance.
The related share-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized straight-line over the vesting term. The estimated fair value per share of the MPRSUs was $5.21 and was calculated using a Monte Carlo simulation model. 2,805,585 of these MPRSUs remained outstanding and unvested at December 31, 2025.
The table above includes 2,431,521 MPRSUs granted to executives during March and April 2023. Vesting of the March 2023 awards is contingent upon the Company’s achievement of stock price hurdles over the performance period starting March 3, 2023 and requires the employee’s continued employment or service through February 28, 2026. Vesting of the April 2023 awards is contingent upon the Company’s achievement of stock price hurdles over the performance period starting April 28, 2023 and requires the employee’s continued employment or service through February 28, 2026. The MPRSUs cliff vest at the end of the three-year period and have a maximum potential to vest at 200% (4,863,042 shares) based on the Company's stock price performance. The related share-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized straight-line over the vesting term. The estimated fair value per share of the MPRSUs ranged from $1.81 to $2.17 and was calculated using a Monte Carlo simulation model. 2,220,894 of these MPRSUs remained outstanding and unvested at December 31, 2025.
As of December 31, 2025, the Company had total unrecognized stock-based compensation expense of $57.7 million related to all of its stock-based awards, which is expected to be recognized over a weighted average period of 1.8 years.
The amount of stock-based compensation expense recognized by the Company was as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cost of goods sold | $ | 3,791 | $ | 3,564 | $ | 3,561 | |||||||||||
| Selling, general and administrative | 24,863 | 20,343 | 18,922 | ||||||||||||||
| Research and development | 3,169 | 3,645 | 4,339 | ||||||||||||||
| Restructuring and other charges | 130 | 216 | — | ||||||||||||||
| Total | $ | 31,953 | $ | 27,768 | $ | 26,822 | |||||||||||
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.