Andersons, Inc.ANDE
Andersons, Inc. Stock Compensation Disclosure
Stock Compensation Plans
The Company's 2019 Long-Term Incentive Compensation Plan, dated February 22, 2019, and subsequently approved by shareholders on May 10, 2019, and amended and restated on May 6, 2022, is authorized to issue up to 7.0 million shares of common stock as options, share appreciation rights, restricted shares and units, performance shares and units and other stock or cash-based awards. Approximately 2.4 million shares remain available for issuance at December 31, 2025.
Stock compensation expense and related income tax impacts were as follows:
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Stock compensation expense | $ | 16,984 | $ | 13,629 | $ | 12,857 | |||||||||||
| Income tax (expense) benefit related to stock compensation | (332) | 1,510 | 1,207 | ||||||||||||||
Restricted Stock Units ("RSUs")
These awards are contingent to requisite service periods established within the grant documents and range from 1 to 3 years. RSUs graded vest in conjunction with the requisite service period. Total restricted stock expense is equal to the market value of the Company's common shares on the date of the award and is recognized over the requisite service period on a straight-line basis.
A summary of the status of the Company's non-vested RSUs as of December 31, 2025, and changes during the period then ended, is presented below:
| Shares (in thousands) | Weighted-Average Grant-Date Fair Value | ||||||||||
Non-vested at January 1, 2025 | 243 | $ | 50.16 | ||||||||
| Granted | 230 | 39.31 | |||||||||
| Vested | (144) | 44.90 | |||||||||
| Forfeited | (13) | 44.92 | |||||||||
Non-vested at December 31, 2025 | 316 | $ | 44.86 | ||||||||
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Total fair value of shares vested (in thousands) | $ | 6,486 | $ | 5,022 | $ | 4,369 | |||||||||||
| Weighted-average fair value of RSUs granted | $ | 39.31 | $ | 48.93 | $ | 44.84 | |||||||||||
As of December 31, 2025, there was $5.7 million of total unrecognized compensation cost related to non-vested RSUs that is expected to be recognized over a weighted-average period of 1.5 years.
Earnings Per Share-Based Performance Share Units with Total Shareholder Return Modifier (“Modified PSUs”)
Beginning in 2024, the Company began granting Modified PSUs. Each Modified PSU gives the participant the right to receive common shares dependent on both a performance condition (achievement of defined EPS levels) and a market condition (ranking of total shareholder return in comparison to our peer group) over a 3-year period. At the end of the period, the number of shares of stock issued from the target award will be determined by both company performance and market performance of the Company when compared to the peer group. The fair value of the Modified PSUs is estimated based on the market value of the Company's common shares on the date of the award in combination with a Monte Carlo Simulation to place a value on the modifier component of the award.
A summary of the status of the Company's Modified PSUs as of December 31, 2025, and changes during the period then ended, is presented below:
| Shares (in thousands) | Weighted-Average Grant-Date Fair Value | ||||||||||
Non-vested at January 1, 2025 | 218 | $ | 60.42 | ||||||||
| Granted | 255 | 44.23 | |||||||||
| Vested | — | — | |||||||||
| Forfeited | (44) | 51.99 | |||||||||
Non-vested at December 31, 2025 | 429 | $ | 51.68 | ||||||||
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Total fair value of shares vested (in thousands) | $ | — | $ | — | $ | — | |||||||||||
| Weighted-average fair value of Modified PSUs granted | $ | 44.23 | $ | 60.42 | $ | — | |||||||||||
As of December 31, 2025, there was approximately $7.6 million unrecognized compensation cost related to non-vested Modified PSUs that is expected to be recognized over a weighted-average period of 1.7 years.
Earnings Per Share-Based Performance Share Units (“EPS PSUs”)
Each EPS PSU gives the participant the right to receive common shares dependent on the achievement of specified performance results over a 3-year performance period. At the end of the performance period, the number of shares of stock issued will be determined by adjusting the award upward or downward from a target award. Fair value of EPS PSUs issued is based on the market value of the Company's common shares on the date of the award. The related compensation expense is recognized over the performance period when achievement of the award is probable and is adjusted for changes in the number of shares expected to be issued if changes in performance are expected. Currently, the Company is accounting for the awards granted in 2023 at the maximum amount available for issuance. The EPS PSUs awards were discontinued after the 2023 grant in favor of the Modified PSUs as explained above.
A summary of the status of the Company's EPS PSUs as of December 31, 2025, and changes during the period then ended, is presented below:
| Shares (in thousands) | Weighted-Average Grant-Date Fair Value | ||||||||||
Non-vested at January 1, 2025 | 226 | $ | 45.39 | ||||||||
| Granted | — | — | |||||||||
| Vested | (99) | 44.56 | |||||||||
| Forfeited | (9) | 46.04 | |||||||||
Non-vested at December 31, 2025 | 118 | $ | 46.04 | ||||||||
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Total fair value of shares vested (in thousands) | $ | 4,407 | $ | 3,646 | $ | 2,150 | |||||||||||
| Weighted-average fair value of EPS PSUs granted | $ | — | $ | — | $ | 46.04 | |||||||||||
As of December 31, 2025, there was no remaining unrecognized compensation cost related to non-vested EPS PSUs as all remaining non-vested awards will be settled in early 2026.
Total Shareholder Return-Based Performance Share Units (“TSR PSUs”)
Each TSR PSU gives the participant the right to receive common shares dependent on total shareholder return on the Company's Common Shares over a 3-year period. At the end of the period, the number of shares of stock issued will be determined by adjusting the award upward or downward from a target award. The TSR PSUs awards were discontinued after the 2023 grant in favor of the Modified PSUs as explained above.
A summary of the status of the Company's TSR PSUs as of December 31, 2025, and changes during the period then ended, is presented below:
| Shares (in thousands) | Weighted-Average Grant-Date Fair Value | ||||||||||
Non-vested at January 1, 2025 | 226 | $ | 67.97 | ||||||||
| Granted | — | — | |||||||||
| Vested | (46) | 66.90 | |||||||||
| Forfeited | (62) | 67.18 | |||||||||
Non-vested at December 31, 2025 | 118 | $ | 68.80 | ||||||||
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Total fair value of shares vested (in thousands) | $ | 3,043 | $ | 4,851 | $ | 2,853 | |||||||||||
| Weighted-average fair value of TSR PSUs granted | $ | — | $ | — | $ | 64.06 | |||||||||||
As of December 31, 2025, there was no remaining unrecognized compensation cost related to non-vested TSR PSUs as all remaining non-vested awards will be settled in early 2026.
Employee Share Purchase Plan (the “ESP Plan”)
The ESP Plan allows employees to purchase common shares through payroll withholdings. The Company's 2004 ESP Plan, restated and amended in 2023, is authorized to issue up to 500 thousand common shares. The Company has approximately 218 thousand common shares remaining available for issuance to and purchase by employees under this plan. The ESP Plan also contains an option component. The purchase price per share under the ESP Plan is the lower of the market price at the beginning or end of the year. The Company records a liability for withholdings not yet applied towards the purchase of common stock. This liability is included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets.
The fair value of the option component of the ESP Plan is estimated at the date of grant under the Black-Scholes option pricing model with the following assumptions at the grant date. Expected volatility was estimated based on the historical volatility of the Company's common shares over the past year. The average expected life was based on the contractual term of the plan. The risk-free rate is based on the U.S. Treasury yield curve rate with a one year term.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk free interest rate | 4.16 | % | 4.79 | % | 4.73 | % | |||||||||||
| Dividend yield | 1.89 | % | 1.29 | % | 2.07 | % | |||||||||||
| Volatility factor of the expected market price of the common shares | 32 | % | 36 | % | 53 | % | |||||||||||
Expected life for the options (in years) | 1.0 | 1.0 | 1.0 | ||||||||||||||
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.