Ares Management CorpARES
Ares Management Corp Stock Compensation Disclosure
13. EQUITY COMPENSATION
Equity-based compensation expense, net of forfeitures, recorded by the Company is presented in the following table:
| Year ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Unvested awards | $ | 730,448 | $ | 352,851 | $ | 255,965 | ||||||||||||||
| AOG Unit awards | 10,101 | — | — | |||||||||||||||||
| Total equity-based compensation expense | $ | 740,549 | $ | 352,851 | $ | 255,965 | ||||||||||||||
Equity Incentive Plan
Equity-based compensation is generally granted under the 2023 Ares Management Corporation Equity Incentive Plan (the “Equity Incentive Plan”). The total number of shares available to be issued under the Equity Incentive Plan resets based on a formula defined in the Equity Incentive Plan and may increase on January 1 of each year. On January 1, 2025, the total number of shares available for issuance under the Equity Incentive Plan reset to 51,846,506 shares and as of December 31, 2025, 45,127,175 shares remained available for issuance.
Generally, unvested awards are forfeited upon termination of employment in accordance with the Equity Incentive Plan. The Company recognizes forfeitures as a reversal of previously recognized compensation expense in the period the forfeiture occurs.
Unvested Awards
Each unvested award represents either a share of the Company’s Class A common stock that is subject to restriction or a restricted unit, representing an unfunded, unsecured right of the holder to receive a share of the Company’s Class A common stock on a specific date. The unvested awards vest and the restrictions lapse or are settled in shares of Class A common stock, as applicable, over service periods up to five years from the grant date, in each case generally subject to the holder’s continued employment as of the applicable vesting date (subject to accelerated vesting upon certain qualifying terminations of employment or retirement eligibility provisions). Compensation expense associated with unvested awards is recognized on a straight-line basis over the requisite service period of the award.
Restricted units are delivered net of the holder’s payroll-related taxes upon vesting. For the year ended December 31, 2025, 5.4 million restricted units vested and 3.1 million shares of Class A common stock were delivered to the holders. For the year ended December 31, 2024, 4.2 million restricted units vested and 2.3 million shares of Class A common stock were delivered to the holders.
The holders of restricted units, other than awards that have not yet been issued, generally have the right to receive as current compensation an amount in cash equal to: (i) the amount of any dividend paid with respect to a share of Class A common stock multiplied by (ii) the number of restricted units held at the time such dividends are declared (“Dividend Equivalent”).
The following table summarizes the Company’s dividends declared and Dividend Equivalents paid during the year ended December 31, 2025:
| Record Date | Dividends Per Share | Dividend Equivalents Paid | ||||||||||||
| March 17, 2025 | $ | 1.12 | $ | 21,489 | ||||||||||
| June 16, 2025 | 1.12 | 20,958 | ||||||||||||
| September 16, 2025 | 1.12 | 21,095 | ||||||||||||
| December 17, 2025 | 1.12 | 21,027 | ||||||||||||
The following table presents unvested awards’ activity:
| Unvested Awards | Weighted Average Grant Date Fair Value Per Unvested Award | ||||||||||
| Balance as of December 31, 2024 | 17,968,940 | $ | 79.11 | ||||||||
| Granted | 7,455,032 | 185.19 | |||||||||
| Vested | (5,393,967) | 80.37 | |||||||||
| Forfeited | (269,399) | 100.68 | |||||||||
| Balance as of December 31, 2025 | 19,760,606 | $ | 118.49 | ||||||||
The total compensation expense expected to be recognized in all future periods associated with unvested awards is $1,532.7 million as of December 31, 2025 and is expected to be recognized over the remaining weighted average period of 3.3 years.
Other Equity-Based Compensation
In connection with the GCP Acquisition, the Company granted 0.3 million AOG Unit awards to certain professionals. Of the total AOG Unit awards granted, 0.1 million units vested on the close date of the GCP Acquisition and the remaining 0.2 million units vest in three equal installments on each of the first three anniversaries of the GCP Acquisition close date, subject to the holder’s continued employment as of the applicable vesting dates. The weighted average grant date fair value per unvested AOG Unit award was $170.94. The total compensation expense expected to be recognized in all future periods associated with unvested AOG Unit awards is $26.2 million as of December 31, 2025 and is expected to be recognized over the remaining weighted average period of 2.2 years.
See “Note 3. Business Combinations” for a further description of the equity compensation expense from the GCP Acquisition.
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.