Ategrity Specialty Insurance Co HoldingsASIC
Ategrity Specialty Insurance Co Holdings Stock Compensation Disclosure
Share-Based Compensation
Equity Incentive Plans
The Company’s Equity Incentive Plan (the “2019 Equity Plan”) provided for restricted units, non-qualified incentive options and other unit-based awards for directors, officers and other employees.
On June 10, 2025, the Company established the 2025 Incentive Plan (the “2025 Equity Plan”) under which various equity-based awards may be granted to directors, officers and other employees.
Total share-based compensation expense recognized was $1.0 million and $2.0 million for the years ended December 31, 2025 and 2024, respectively. The related tax benefit recognized was $0.2 million and $0.4 million for the years ended December 31, 2025 and 2024, respectively.
Valuation Assumptions
Estimated fair values of awards were derived by independent third-party valuations performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants
Accounting and Valuation Guide, Valuation of Privately Held Company Equity Securities Issued as Compensation. The third-party valuations used the guideline public company method (“GPC method”) to estimate the Company’s total equity value and allocated the total equity value between the award units. The GPC method estimates enterprise value based on a comparison of the Company to comparable public companies in a similar line of business and generally applies representative valuation ratios, which relate market prices to selected financial statistics derived from the comparable companies to the subject company after consideration of adjustments for financial position, growth, markets, profitability, reinvestment needs, risk and other factors.
Non-Qualified Stock Options (“NQSOs”)
NQSOs generally have contractual terms of to ten years, and vest over - or five-year service periods. Certain awards include performance conditions in addition to service conditions, including awards that vested upon completion of the Company’s IPO.
For awards subject only to service conditions, compensation cost is recognized on a straight-line basis over the requisite service period. For awards subject to both service and performance conditions, compensation cost is recognized using a graded vesting attribution method when achievement of the performance condition is considered probable.
The following table summarizes NQSO activity for the year ended December 31, 2025:
| Number of Options | Weighted-Average Exercise Price | ||||||||||
| Outstanding as of January 1, 2025 | 4,339,810 | $ | 11.98 | ||||||||
| Granted | — | $ | — | ||||||||
| Exercised | — | $ | — | ||||||||
| Expired | — | $ | — | ||||||||
| Forfeited | (94,475) | $ | 10.66 | ||||||||
| Outstanding as of December 31, 2025 | 4,245,335 | $ | 12.01 | ||||||||
The following table summarizes NQSOs outstanding and exercisable as of December 31, 2025:
| Options | Weighted‑Average Exercise Price | Weighted‑Average Remaining Term (years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||||||
| Outstanding | $ | 12.01 | 8.2 years | $ | 38,192 | |||||||||||||||
| Exercisable | $ | 17.02 | 8 years | $ | 1,129 | |||||||||||||||
The aggregate intrinsic value represents the total pre‑tax intrinsic value (the excess of the closing stock price over the exercise price) of in‑the‑money options as of December 31, 2025.
As of December 31, 2025, unrecognized compensation expense related to unvested NQSOs was $1.7 million and is expected to be recognized over a weighted-average period of 4.0 years.
CEO Options
In 2022, ZFSG granted stock options to purchase shares of the Company held by ZFSG to the Company’s Chief Executive Officer for services provided to the Company. Because ZFSG acted in its capacity as a shareholder, the award is accounted for as share-based compensation of the Company
with a corresponding capital contribution in accordance with ASC 718, Compensation—Stock Compensation.
In December 2024, the original CEO options were cancelled and replaced with new CEO Options (“the new CEO Options”). The replacement was accounted for as a Type 1 modification in accordance with ASC 718. The new CEO Options were granted on December 8, 2024 (the “Modification Date”) with a contractual term of ten years and a 30 month graded vesting period.
The modification resulted in incremental compensation cost of approximately $2.4 million, representing the additional fair value of the replacement award, including the incremental number of options granted. Of this amount, approximately $1.7 million was recognized during the year ended December 31, 2024. The remaining incremental compensation cost is being recognized prospectively over the remaining vesting period of the new CEO Options. During the year ended December 31, 2025, the Company recognized $16 thousand of additional incremental compensation expense related to the acceleration of vesting upon completion of the Company’s IPO.
As of December 31, 2025, unrecognized compensation expense related to the CEO options was $587 thousand and is expected to be recognized over a weighted-average period of 1.5 years. As of December 31, 2025, 2,541,407 CEO Options were outstanding, of which 2,116,724 were vested.
Based on the closing price of the Company’s common stock of $21.01 per share on December 31, 2025, the aggregate intrinsic value of the CEO Options outstanding was $29.6 million. No CEO options were exercisable as of December 31, 2025.
Restricted Stock Units (“RSUs”)
RSUs represent the right to receive shares of the Company’s common stock upon vesting. Holders of unvested RSUs do not have voting rights are not entitled to dividends prior to vesting. Accordingly, unvested RSUs are not considered participating securities for purposes of calculating earnings per share.
RSUs vest over or five-year service periods and compensation expense is recognized on a straight-line basis over the requisite service period.
The following table summarizes RSU activity for the year ended December 31, 2025:
| Year Ended December 31, 2025 | |||||||||||
| Shares | Weighted Average Grant-Date Fair Value | ||||||||||
| Non-vested | |||||||||||
| Beginning of period | 3,132 | $ | 10.56 | ||||||||
| Granted | 8,823 | $ | 17.00 | ||||||||
| Vested | (3,132) | $ | 10.56 | ||||||||
| Forfeited | — | $ | — | ||||||||
| End of period | 8,823 | $ | 17.00 | ||||||||
The total fair value of RSUs vested during the year ended December 31, 2025 was $66 thousand.
As of December 31, 2025, unrecognized compensation expense related to unvested RSUs was $123 thousand and is expected to be recognized over the remaining vesting period.
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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.