Axos Financial, Inc.AX
Axos Financial, Inc. Stock Compensation Disclosure
STOCK-BASED COMPENSATION
The Company has an equity incentive plan, the Amended and Restated 2014 Stock Incentive Plan (the “2014 Plan”), which provides for the granting of non-qualified and incentive stock options, restricted stock and RSUs, stock appreciation rights and other awards to employees, directors and consultants. The Plan is designed to encourage selected employees and directors to improve operations and increase profits, and to accept or continue employment or association with the Company through participation in the growth in the value of the Company’s common stock. RSUs have a grant price equal to the closing price of the Company’s common stock on the award date. RSUs granted generally vest over a three-year period based on service, with 33% of the underlying shares vesting on each annual anniversary of the award.
2014 Plan. In November 2023, the Company’s Board of Directors and stockholders approved the 2014 Plan, as amended and restated. The number of shares authorized for issuance pursuant to awards under the 2014 Plan is 6,680,000, less RSU awards granted, plus any RSUs that become available upon the forfeiture, expiration, cancellation or settlement in cash awards outstanding under the 2014 Plan. At June 30, 2025, 1,191,861 shares of common stock remained available for issuance pursuant to grant awards under the 2014 Plan.
Effective July 1, 2017, the Company entered into a five-year employment agreement with its Chief Executive Officer (the “Agreement”) that authorizes an award of RSUs (the “RSU award”). The RSU award is an equity-based award and carries
a service condition and a market condition that incorporates a measurement of the Company’s total stock return to stockholders in comparison to the total stock return of the ABA Nasdaq Community Bank Index. The accounting grant date of the RSU award is July 1, 2017 and expensing of the RSU award began on this date at the fair value measurement amount as determined by the Company’s valuation process. The Company utilized a Monte Carlo simulation to estimate the value of path-dependent options and determined the fair value using an expected return based on the 5-year US Treasury constant maturity rate, an equity volatility based on 6-month and 1-year historical daily trading history, market capitalization, and stock price for the RSU award. On July 1, 2017, the estimated fair value of the RSU award was $20.5 million, which vests in five tranches over a total period of nine years.
Effective each January 1st following the initial five-year term, the Agreement automatically renewed for additional fiscal year term with the accounting grant date the same as the renewal date of the respective award. For each automatic one-year renewal, the Company utilized a Monte Carlo simulation with key inputs of an expected return on the average of the 1 and 2 year U.S. Treasury constant maturity rate, an equity volatility based on 1.5 year historical daily trading history, market capitalization, and stock price. The estimated fair values for the one-year renewals occurring during the fiscal years ended June 30, 2025, 2024 and 2023 Award were $8.8 million, $9.4 million and $5.2 million respectively, on each award’s grant date. The actual awards are determined by the actual performance of the Company’s total stock return in comparison to the total stock return of the ABA Nasdaq Community Bank Index in the respective periods.
As of June 30, 2025, compensation expense not yet recognized over the remaining term of the Agreement and subsequent renewals was $16.3 million.
At June 30, 2025, compensation expense not yet recognized related to non-vested awards was $63.6 million and the weighted-average period over which it is expected to be recognized is 1.3 years.
The following table presents the status and changes in RSUs for the periods indicated:
| RSUs | Weighted-Average Grant-Date Fair Value | ||||||||||
Non-vested balance at June 30, 2024 | 1,541,194 | $ | 43.95 | ||||||||
| Granted | 1,014,356 | 63.94 | |||||||||
| Vested | (880,010) | 46.38 | |||||||||
| Forfeitures | (111,524) | 49.66 | |||||||||
Non-vested balance at June 30, 2025 | 1,564,016 | $ | 55.50 | ||||||||
The Company recognized $35.5 million, $30.7 million and $26.1 million of stock compensation in net income for the fiscal years ended June 30, 2025, 2024 and 2023. The related income tax benefit was $10.4 million, $9.0 million and $7.5 million in the respective years. The total fair value of shares vested during the fiscal year ended June 30, 2025 was $60.6 million.
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.