POPULAR, INC.BPOP
POPULAR, INC. Stock Compensation Disclosure
Note 33 - Stock-based compensation
Incentive Plan
the Corporation to issue several types of stock-based compensation to employees and directors of the Corporation and/or any of its
subsidiaries (the “2020 Incentive Plan”). The 2020 Incentive Plan replaced the Popular, Inc. 2004 Omnibus Incentive Plan, which
was in effect prior to the adoption of the 2020 Incentive Plan (the “2004 Incentive Plan” and, together with the 2020 Incentive Plan,
the “Incentive Plan”). Participants under the Incentive Plan are designated by the Talent and Compensation Committee of the Board
of Directors (or its delegate, as determined by the Board). Under the Incentive Plan, the Corporation has issued restricted stock and
performance shares to its employees and restricted stock and restricted stock units (“RSUs”) to its directors.
The restricted stock granted under the Incentive Plan to employees becomes vested based on the employees’ continued service
with Popular. Unless otherwise stated in an agreement,
the compensation cost associated with the shares of restricted stock
granted prior to 2021 was determined based on a two-prong vesting schedule. These grants include ratable vesting over five or four
years commencing at the date of grant (the “graduated vesting portion”) with a portion vested at termination of employment after
attainment of 55 years of age and 10 years of service or 60 years of age and 5 years of service (the “retirement vesting portion”).
The graduated vesting portion is accelerated at termination of employment after attaining 55 years of age and 10 years of service or
60 years of age and 5 years of service. Restricted stock granted on or after 2021 have ratable vesting in equal annual installments
over a period of 4 years or 3 years, depending in the classification of the employee. The vesting schedule is accelerated at
termination of employment after attaining the earlier of 55 years of age and 10 years of service or 60 years of age and 5 years of
service.
The performance share awards granted under the Incentive Plan consist of the opportunity to receive shares of Popular, Inc.’s
common stock provided that the Corporation achieves certain goals during a three-year performance cycle. The goals will be based
on two metrics weighted equally: the Relative Total Shareholder Return (“TSR”) and the Absolute Return on Average Tangible
Common Equity (“ROATCE”). The TSR metric is considered to be a market condition under ASC 718. For equity settled awards
based on a market condition, the fair value is determined as of the grant date and is not subsequently revised based on actual
performance. The ROATCE metric is considered to be a performance condition under ASC 718. The fair value is determined
based on the probability of achieving the ROATCE goal as of each reporting period. The TSR and ROATCE metrics are equally
weighted and work independently.
The number of shares that will ultimately vest ranges from 50% to a 150% of target based on
both market (TSR) and performance (ROATCE) conditions. The performance shares will vest at the end of the three-year
performance cycle. If a participant terminates employment after attaining the earlier of 55 years of age and 10 years of service or 60
years of age and 5 years of service, the performance shares shall continue outstanding and vest at the end of the performance
cycle.
The following table summarizes the restricted stock and performance shares activity under the Incentive Plan for members of
management.
(Not in thousands)
Shares
Weighted-average
grant date fair value
Non-vested at January 1, 2023
281,963
$
56.50
Granted
257,757
66.01
Performance Shares Quantity Adjustment
19,753
75.32
Vested
(243,133)
66.31
Forfeited
(16,444)
55.82
Non-vested at December 31, 2023
299,896
$
58.20
Granted
242,474
86.62
Performance Shares Quantity Adjustment
(18,650)
87.79
Vested
(267,873)
74.26
Forfeited
(7,939)
50.68
Non-vested at December 31, 2024
247,908
$
66.86
Granted
226,259
100.35
Performance Shares Quantity Adjustment
55,517
91.18
Vested
(293,939)
90.00
Forfeited
(8,787)
66.53
Non-vested at December 31, 2025
226,958
$
76.13
During the year ended December 31, 2025,
194,599
177,249
; 2023 -
200,303
) and
31,660
performance shares (2024 -
65,225
; 2023 -
57,454
) were awarded to management under the Incentive Plan.
During the year ended December 31, 2025, the Corporation recognized $
18.3
management incentive awards, with a tax benefit of $
2.5
14.0
2.4
11.5
million, with a tax benefit of $
1.9
and performance shares vested was $
20.4
28.0
of $
2.8
recognized $
4.3
0.4
3.9
$
0.3
3.5
0.1
restricted stock awards and performance shares to members of management at December 31, 2025 was $
12.4
expected to be recognized over a weighted-average period of
1.58
The following table summarizes the restricted stock activity under the Incentive Plan for members of the Board of Directors:
(Not in thousands)
Units/Stocks
Weighted-average grant
date fair value
Non-vested at January 1, 2023
-
-
Granted
39,104
$
55.30
Vested
(39,104)
55.30
Forfeited
-
-
Non-vested at December 31, 2023
-
-
Granted
25,462
$
89.51
Vested
(25,462)
89.51
Forfeited
-
-
Non-vested at December 31, 2024
-
-
Granted
24,476
$
101.33
Vested
(5,363)
104.33
Forfeited
-
-
Non-vested at December 31, 2025
19,113
100.49
The equity awards granted to members of the Board of Directors of Popular, Inc. (the “Directors”) on or after May 2025 will vest and
become non-forfeitable on the first anniversary of the grant date of such award. Equity awards granted to the Directors may be paid
in either common stock or RSUs at each Director`s election. If RSUs are elected, the Directors may defer the delivery of the shares
of common stock underlying the RSUs award until their retirement. To the extent that cash dividends are paid on the Corporation’s
outstanding common stock, the Directors will receive an additional number of RSUs that reflect a reinvested dividend equivalent.
For 2025, 2024 and 2023, Directors elected RSUs and common stock. For the year ended December 31, 2025,
21,788
2,688
24,070
1,392
36,804
2,300
2.0
expense related to these shares was recognized, with a tax benefit of $
0.4
2.2
0.4
million; 2023 - $
2.2
0.4
ended December 31, 2025 for the Directors was $
0.6
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
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.