Burford Capital LtdBUR
Burford Capital Ltd Stock Compensation Disclosure
Share-based and deferred compensation
Share-based awards granted to employees as compensation consist of RSUs with service-based conditions and PSUs with service-based conditions as well as performance- and/or market-based conditions, as applicable. Prior to the year ended December 31, 2024, the Company granted PSUs with both performance- and market-based conditions whereas, beginning for the year ended December 31, 2024, the Company has granted PSUs with market-based conditions only. All share-based awards are measured based on the grant date fair value of the award. Share-based awards that do not require future service are expensed immediately. Share-based awards subject to service- and performance-based conditions are expensed over the relevant service period to the extent the performance-based conditions are satisfied or deemed probable to be satisfied. Share-based awards with service- and market-based conditions are expensed over the relevant service period regardless of whether the market-based condition is satisfied.
LTIP
In 2016, the Company’s shareholders approved the LTIP, which was amended and extended by shareholder approval on May 13, 2020. The LTIP is administered by the compensation committee of the Board of Directors
(the “Compensation Committee”). The Compensation Committee has discretion to select plan participants, determine the type and the number of awards and set the performance targets or adjust them, in certain circumstances; provided that, in the period from 2016 to 2030, awards may not be granted under the LTIP if such grant (together with any other grant made at the same time) would cause the number of ordinary shares that have been issued or could be issued under the LTIP or any other equity-based plan adopted by the Group to exceed 10% of the Company’s issued ordinary share capital at the proposed date of grant.
Awards under the LTIP are granted in the form of share-based awards, which are treated as phantom awards for tax and legal purposes. Both RSU and PSU awards granted under the LTIP are subject to satisfaction of service-based conditions, requiring that the participant remains employed by the Group through the date of vesting, and PSUs also require satisfaction of performance-based conditions determined by the Compensation Committee at the time of grant. Share-based awards granted prior to January 1, 2021 included both service-based and performance-based conditions. Share-based awards granted under the LTIP on and after January 1, 2021 have continued to have service-based conditions, while at least 50% of share-based awards granted to the Company’s senior management under the LTIP were also required to have performance-based conditions. Share-based awards granted under the LTIP generally vest in full on the third anniversary of the grant date (which is the maximum contractual term) and, for PSUs, each performance-based condition is measured over the individual financial years beginning with the financial year in which the relevant PSUs were granted as well as over the entire financial years as a whole.
In the event of a participant’s termination of employment for any reason prior to vesting, other than death, disability or retirement, all outstanding share-based awards will be forfeited. In the event of the participant’s death, disability, retirement or, in certain circumstances, at the discretion of the Compensation Committee (e.g., good leavers), outstanding share-based awards will continue to be eligible to vest as of the end of the service period and, if applicable, the performance period and may be prorated (other than in the case of retirement) based on the number of full months the participant was employed during the service and, if applicable, performance period. In special circumstances, the Compensation Committee has the discretion to accelerate vesting or alter proration or performance targets for outstanding awards.
Certain awards granted under the LTIP are subject to clawback provisions in accordance with applicable law and pursuant to, and in accordance with, the Company’s clawback policy for incentive-based executive compensation, effective October 2, 2023, which is intended to meet the scope of the SEC Rule 10D-1 and the associated NYSE listing exchange rules (the “Clawback Policy”). Awards granted under the LTIP are also subject to clawback at the discretion of the Compensation Committee in accordance with the terms of the LTIP for up to five years from the vesting date in the following circumstances: (i) a material financial misstatement or miscalculation of the Group’s audited financial statements; (ii) the assessment of any performance-based condition on vesting which was based on error, misleading information or inaccurate assumptions; or (iii) the gross misconduct of a participant.
During the period since the LTIP’s inception through December 31, 2025, the Group has issued share-based awards in respect of approximately 4.2% of the Company’s issued and outstanding ordinary share capital and, as of December 31, 2025, there was a total of approximately 9.3 million share-based awards issued under the LTIP since its inception. Share-based awards may be satisfied with newly issued ordinary shares, a transfer of treasury shares or ordinary shares purchased on the open market. As of December 31, 2025, approximately 13.8 million ordinary shares remained available for future grants under the LTIP through 2030. In connection with and following the adoption of the OICP in 2025, no additional share-based awards will be granted under the LTIP following March 3, 2025.
OICP
At the annual general meeting held on May 14, 2025, the Company’s shareholders approved the OICP, which was unanimously approved and adopted by the Board of Directors on February 12, 2025. The OICP replaces the LTIP and authorizes the issuance of up to 16,500,000 ordinary shares plus any ordinary shares subject to outstanding awards under the LTIP that expire or become unexercisable, or are forfeited, cancelled or otherwise terminated.
The Board of Directors has appointed the Compensation Committee as the administrator of the OICP. Subject to the terms of the OICP and applicable law, the Compensation Committee has authority to administer the OICP, including sole and plenary authority to (i) designate participants, (ii) determine the types of awards to
be granted to a participant and all the terms and conditions of such awards, (iii) interpret, administer, reconcile any inconsistency in, correct any fault in or supply any omission in, the OICP, any award agreement or any other instrument or agreement relating to, or award made under, the OICP, (iv) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the OICP, (v) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, awards due to the death or disability of a participant and (vi) make any other determination and take any other action that the Compensation Committee deems necessary or desirable for the administration of the OICP or any award thereunder.
The OICP allows for grants of (i) options, including incentive stock options qualified as such under US federal income tax laws and options that do not qualify as incentive stock options, (ii) stock appreciation rights, (iii) restricted shares, (iv) RSUs, (v) deferred share units and (vi) other equity-based or equity-related awards. Furthermore, awards under the OCIP may be granted (as determined by the Compensation Committee) subject to criteria or criterion related to the performance of the Company. Subject to certain exceptions, awards under the OICP vest no earlier than the first anniversary of the applicable grant date, except that up to a maximum of 5% of awards under the OICP may be exempt from the foregoing minimum vesting requirement.
Awards under the OICP are granted in the form of share-based awards, which are treated as phantom awards for tax and legal purposes. Both RSU and PSU awards granted under the OICP are generally subject to satisfaction of service-based conditions, requiring that the participant remains employed by the Group through the date of vesting, and PSUs also generally require satisfaction of performance-based conditions determined by the Compensation Committee at the time of grant. Share-based awards granted under the OICP generally vest in full on the third anniversary of the grant date and, for PSUs, each performance-based condition is measured over the three individual financial years beginning with the financial year in which the relevant PSUs were granted as well as over the entire three financial years as a whole.
The Company may require a participant to forfeit, return or reimburse the Company for all or a portion of an award and any amounts paid thereunder in accordance with the terms of the Clawback Policy or as necessary or appropriate to comply with applicable law.
During the period since the OICP’s inception through December 31, 2025, the Group has issued share-based awards in respect of approximately 0.5% of the Company’s issued and outstanding ordinary share capital and, as of December 31, 2025, there was a total of approximately 1.1 million share-based awards issued under the OICP since its inception. Share-based awards may be satisfied with newly issued ordinary shares, a transfer of treasury shares or ordinary shares purchased on the open market. As of December 31, 2025, approximately 15.5 million ordinary shares remained available for future grants under the OICP.
Share-based awards activity
The table below sets forth the grant, vesting and forfeiture of share-based awards for the year ended December 31, 2025 and the number of unvested share-based awards as of the beginning and end of the relevant period.
| (Ordinary shares in thousands) | Number of ordinary shares | Weighted average grant date fair value per ordinary share | ||||||||||||
| Unvested share-based awards as of December 31, 2024 | 3,652 | $ | 9.61 | |||||||||||
Granted(1) | 1,055 | $ | 13.86 | |||||||||||
Vested(2) | (1,916) | $ | 9.37 | |||||||||||
| Forfeited | (133) | $ | 11.66 | |||||||||||
| Unvested share-based awards as of December 31, 2025 | 2,658 | $ | 11.37 | |||||||||||
1. The aggregate grant date fair value of share-based awards granted during the years ended December 31, 2025, 2024 and 2023 was $14.6 million, $15.4 million and $11.9 million, respectively. The associated weighted average grant date fair value per ordinary share for share-based awards granted during the years ended December 31, 2025, 2024 and 2023 was $13.86, $14.34 and $6.89, respectively. | ||||||||||||||
2. The aggregate fair value of share-based awards that vested during the years ended December 31, 2025, 2024 and 2023 was $18.0 million, $14.6 million and $6.9 million, respectively. | ||||||||||||||
The Group used the Monte-Carlo model to estimate the fair value of PSUs granted during the years ended December 31, 2025, 2024 and 2023. If applicable, the Group would adjust the grant date fair value of PSUs
for material non-public information existing at the grant date that could affect the fair value of PSUs, consistent with ASC 718 and the SEC staff guidance in SAB 120. The weighted average remaining contractual term of the unvested share-based awards was 1.0 years and 1.2 years as of December 31, 2025 and 2024, respectively. The compensation cost related to the unvested share-based awards not yet recognized was $12.0 million, $17.0 million and $15.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The table below separately sets forth the key assumptions used for valuing PSUs as well as share-based awards granted as of the dates indicated.
| December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| PSUs | ||||||||||||||||||||
Dividend yield (1) | N/A | 0.8% | 0.7% | |||||||||||||||||
| Expected volatility | 38.2% | 25.4% | 46.7% | |||||||||||||||||
| Risk-free interest rate | 4.1% | 4.4% | 3.7% | |||||||||||||||||
| Expected term (years) | 3.0 | 3.0 | 3.0 | |||||||||||||||||
| Share-based awards | ||||||||||||||||||||
| Weighted average fair value per ordinary share ($) | 13.86 | 14.34 | 6.89 | |||||||||||||||||
| Weighted average price per ordinary share ($) | 14.03 | 15.05 | 7.19 | |||||||||||||||||
| 1. Under the OICP, participants accrue dividends or dividend equivalents on their unvested share-based awards, which will be paid to them upon vesting of such share-based awards. As a result, the dividend yield assumption is not applicable under the OICP. | ||||||||||||||||||||
The expected volatility reflects the assumption that the historical volatility over a period similar to the life of PSUs is indicative of future trends, which may not necessarily be the actual outcome.
NQDC Plan
In 2021, the Group established the NQDC Plan, under which the non-employee directors and a specified group of employees can elect to defer a portion of their compensation until a future date. Participants may elect to defer base salary, bonuses, payments under the “phantom carry pools” program and share-based awards granted under the Company’s share-based compensation plans. The deferral period is a minimum of three years (five years following grant in the case of share-based awards granted under the Company’s share-based compensation plans), and deferral distributions may be elected to be received in a lump sum or in annual installments. During the deferral period, the participant elects for their deferral account to be notionally invested in various mutual funds or the Company’s ordinary shares. In addition, the Company may in its sole discretion make a matching contribution to the participant’s deferral account to the extent cash deferrals are notionally invested in the Company’s ordinary shares. The Company’s matching contribution is accounted for as share-based compensation and vests after a two-year service period. Distributions from the NQDC Plan will be made in accordance with the timing and form selected by the individual participant when the deferral is first elected. The NQDC Plan is administered and maintained by an independent third party.
On May 14, 2025, the Company’s shareholders approved and adopted an amendment to the NQDC Plan, which was unanimously approved and adopted by the Board of Directors on February 12, 2025, that provides that 6,600,000 ordinary shares are authorized for issuance under the NQDC Plan, subject to the other terms and conditions of the NQDC Plan. The Company may allocate (i) 5,000,000 ordinary shares to settle deferrals of cash compensation and (ii) 1,600,000 ordinary shares to settle the Company’s matching contribution.
For the years ended December 31, 2025, 2024 and 2023, the Group granted 496,328 matching contributions of notional shares at a weighted average grant date fair value of $13.66 per ordinary share, 127,193 matching contributions of notional shares at a weighted average grant date fair value of $15.13 per ordinary share and 77,281 matching contributions of notional shares at a weighted average grant date fair value of $13.14 per ordinary share, respectively. The weighted average remaining contractual term of matched notional shares under the NQDC Plan was 0.8 years and 0.6 years as of December 31, 2025 and 2024, respectively. The compensation cost related to matched notional shares under the NQDC Plan not yet recognized was $4.4 million, $1.5 million and $1.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.
From time to time, we may purchase mutual fund investments or the Company’s ordinary shares to minimize our exposure resulting from the elections of the participants in the NQDC Plan.
The outstanding deferred compensation liability to participants was $27.7 million and $24.4 million as of December 31, 2025 and 2024, respectively. The outstanding deferred compensation liability includes amounts notionally invested in the Company’s ordinary shares from both employee deferrals and matching contributions by the Company.
NED Plan
In 2021, the Group established the NED Plan, under which non-executive directors are eligible to receive grants of the Company’s ordinary shares in connection with their service on the Board of Directors, subject to transfer and sale restrictions until the earlier of (i) the third anniversary of the grant date or (ii) the date on which the director no longer serves as a member of the Board of Directors. Employee directors are not eligible for grants under the NED Plan.
For the years ended December 31, 2025, 2024 and 2023, the Group purchased on the open market on the London Stock Exchange 29,227, 19,285 and 17,403, respectively of the Company’s ordinary shares to satisfy grants of awards under the NED Plan.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
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.