BXP, Inc.BXP
BXP, Inc. Stock Compensation Disclosure
15. Stock Option and Incentive Plan
Boston Properties, Inc. 2021 Stock Incentive Plan
At the Company’s 2021 annual meeting of stockholders held on May 20, 2021, its stockholders approved the Boston Properties, Inc. 2021 Stock Incentive Plan (the “2021 Plan”). The 2021 Plan replaced the Boston Properties, Inc. 2012 Stock Option and Incentive Plan (the “2012 Plan”) and no further awards will be issued under the 2012 Plan. The material features of the 2021 Plan include, among other things: (i) the maximum number of shares of common stock reserved and available for issuance under the 2021 Plan is 5,400,000 shares less one share for every one share that was granted between March 4, 2021 and May 19, 2021 under the 2012 Plan, (ii) shares of common stock underlying awards granted under the 2021 Plan or the 2012 Plan that are forfeited, canceled or otherwise terminated (other than by exercise) will be added back to the shares of common stock available for issuance under the 2021 Plan and, with respect to “full-value” awards under the 2021 Plan or the 2012 Plan, shares tendered or held back for taxes and shares previously reserved for issuance pursuant to such an award to the extent that such shares are not issued and are no longer issuable pursuant to such an award (e.g., in the event that a full-value award that may be settled in cash or by issuance of shares of common stock is settled in cash) will be added back to the shares available for issuance under the 2021 Plan, (iii) the award of stock options (both incentive and non-qualified options), stock appreciation rights, restricted stock units, restricted stock, unrestricted stock, dividend equivalent rights, cash-based awards and other equity-based awards (including LTIP Units) is permitted, (iv) stock options may not be repriced and “underwater” stock options may not be exchanged for another award or cash without stockholder approval; and (v) the term of the 2021 Plan ends years from the date of stockholder approval, or May 20, 2031.
2025 OPP Units
On December 22, 2025 (the “Grant Date”), BXP’s Compensation Committee approved the 2025 OPP Units. The Company granted performance-based equity awards (the “OPP Awards”) to certain members of the Company’s senior leadership team. The OPP Awards were issued pursuant to the 2021 Plan in the form of LTIP Units of BPLP and consist of an opportunity to earn up to an aggregate of 711,864 LTIP Units. The number of LTIP Units granted reflects the maximum that may be earned for achieving the highest level of performance and satisfying the service-based vesting requirements described below.
Each LTIP Unit granted under the OPP Awards may be converted into one Common Unit only if the service-based and performance-based vesting conditions described below are met. If such conditions are not met, the OPP Awards will be forfeited in their entirety. Under ASC 718 “Compensation – Stock Compensation,” the 2025 OPP Units have an aggregate value of approximately $31.9 million, which amount will generally be amortized into earnings under the graded vesting attribution method. The Company recognized $0.3 million of compensation expense related to the 2025 OPP Units for the period from December 22, 2025 through December 31, 2025.
Performance-Based Vesting Requirements
The Awards are subject to the performance-based vesting requirements during the period from the Grant Date through the fourth anniversary of the Grant Date (the “Performance Period”), and are linked to the creation of significant shareholder value during the Performance Period based on the Company’s “Dividend-Adjusted Stock Price” and “Dividend-Adjusted Stock Price Performance” (each as defined below).
At a Dividend-Adjusted Stock Price Performance equal to or greater than $90.00, an approximately 30% increase from the closing stock price on the Grant Date, the LTIP Units will be earned as follows (subject to the additional service-based vesting requirements described below):
| Performance Tier | Dividend-Adjusted Stock Price Performance | Percentage of Award Earned | ||||||||||||
| Eight | $118.00 | 100.0% | ||||||||||||
| Seven | $114.00 | 87.5% | ||||||||||||
| Six | $110.00 | 75.0% | ||||||||||||
| Five | $106.00 | 62.5% | ||||||||||||
| Four | $102.00 | 50.0% | ||||||||||||
| Three | $98.00 | 37.5% | ||||||||||||
| Two | $94.00 | 25.0% | ||||||||||||
| One | $90.00 | 12.5% | ||||||||||||
There will be no linear interpolation if Dividend-Adjusted Stock Price Performance falls between performance tiers.
Service-Based Vesting Requirements
One-third of the LTIP Units granted under the OPP Awards will vest on the second anniversary of the Grant Date, with the remaining two-thirds of the LTIP units vesting ratably over the third and fourth years of the Performance Period, subject to continued service and the achievement of the performance-based vesting conditions described above. Prior to the second anniversary of the Grant Date, or in the event of a termination for “cause,” OPP Award recipients will not be eligible to earn any LTIP Units. Except in connection with a change in control as described below, the LTIP Units will not be eligible for any acceleration of vesting.
If an Award recipient’s service terminates following the second anniversary of the Grant Date and before the end of the Performance Period for any reason other than termination by the Company for “cause,” the earned LTIP Units will vest based on the highest level of performance achieved during that OPP Award recipient’s service period as follows: in addition to the one-third of the earned LTIP Units that vested as of the first anniversary of the Grant Date, the vesting of the remaining two-thirds of the earned LTIP Units will be prorated based on the number of days elapsed between the second anniversary of the Grant Date and the fourth anniversary of the Grant Date.
Unlike the Company’s MYLTIP Awards, the OPP Awards do not provide for accelerated or continued vesting in connection with a qualified retirement.
In connection with a change in control, performance-based vesting will be measured through the date of the change in control as set forth above. With respect to service-based vesting, if the acquiror does not assume or replace the LTIP Units on substantially the same terms, the LTIP Units will vest immediately upon the change in control to the extent earned based on performance. If the acquiror does assume or replace the LTIP Units on substantially the same terms, the LTIP Units will remain outstanding and remain subject to the service-based vesting requirements set forth above; provided that, if, within 24 months of the change in control, the recipient’s service to the Company (or its successor) is terminated either (i) by the Company (or its successor) without “cause” or (ii) by the Award recipient for “good reason,” then any unvested LTIP Units will become fully vested upon such termination.
2025 MYLTIP
On January 22, 2025, BXP’s Compensation Committee approved the 2025 Multi-Year Long-Term Incentive Program (the “2025 MYLTIP”) awards under the 2021 Plan to certain executive officers of BXP. The 2025 MYLTIP awards consist of three components. Two of the components are each weighted 40% and utilize BXP’s TSR and BXP’s diluted Funds from Operations (“FFO”) per share growth, respectively, over a -year measurement period as the performance metrics. The third component, weighted 20%, utilizes an average leverage ratio as the performance metric. Earned awards will range from zero to a maximum of 354,940 LTIP Units depending on BXP’s performance under the three components, with a target of approximately 177,470 LTIP Units. Under ASC 718 “Compensation – Stock Compensation,” the 2025 MYLTIP awards have an aggregate value of approximately $12.7 million.
MYLTIP Measurement Period Results
The following table shows the results for the MYLTIP awards at the end of their respective -year measurement period (Aggregate value is shown in millions):
| Measurement Date | Final Payout as a % of Target | Aggregate Value | Forfeited Units | ||||||||||||||||||||
| 2022 MYLTIP Awards | January 31, 2025 | 59 | % | $ | 5.4 | 177,919 | |||||||||||||||||
| 2021 MYLTIP Awards | February 1, 2024 | 112 | % | $ | 12.6 | 155,625 | |||||||||||||||||
| 2020 MYLTIP Awards | February 3, 2023 | 50 | % | $ | 3.8 | 152,460 | |||||||||||||||||
Issuances (Restricted Stock, LTIP Units and MYLTIP Units)
The following table shows information for restricted stock that were issued by BXP during the years ended December 31, 2025, 2024 and 2023 (Issued value is shown in millions):
| Restricted Stock | 2025 | 2024 | 2023 | |||||||||||||||||
| Shares issued | 56,273 | 83,316 | 73,762 | |||||||||||||||||
| Issued value | $ | 4.1 | $ | 5.3 | $ | 5.4 | ||||||||||||||
| Weighted-average price per share | $ | 72.37 | $ | 63.28 | $ | 72.57 | ||||||||||||||
The following table shows information for LTIP units that were issued by BPLP during the years ended December 31, 2025, 2024 and 2023 (Issued value is shown in millions):
| LTIP Units | 2025 | 2024 | 2023 | |||||||||||||||||
| Units Issued | 406,646 | 451,044 | 430,824 | |||||||||||||||||
| Issued value | $ | 26.9 | $ | 26.8 | $ | 29.9 | ||||||||||||||
| Weighted-average price per unit | $ | 66.10 | $ | 59.41 | $ | 69.29 | ||||||||||||||
| Monte Carlo assumptions (1): | ||||||||||||||||||||
| Expected life (in years) | 5.7 | 5.7 | 5.7 | |||||||||||||||||
| Risk free interest rate | 4.45 | % | 4.03 | % | 3.67 | % | ||||||||||||||
| Expected price volatility | 38.0 | % | 36.0 | % | 32.0 | % | ||||||||||||||
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(1)LTIP Units were valued using a Monte Carlo simulation method model in accordance with the provisions of ASC 718.
The following table shows information for MYLTIP Units that were issued by BPLP during the years ended December 31, 2025, 2024 and 2023:
| MYLTIP Units | 2025 | 2024 | 2023 | |||||||||||||||||
| Units Issued | 354,940 | 330,479 | 322,053 | |||||||||||||||||
Employees and non-employee directors paid $0.01 per share of restricted common stock and $0.25 per LTIP Unit and MYLTIP Unit. When issued, LTIP Units are not economically equivalent in value to a share of Common Stock, but over time can increase in value to one-for-one parity with Common Stock if there is sufficient appreciation in the value of the Company’s assets. The aggregate value of the LTIP Units is included in noncontrolling interests in the Consolidated Balance Sheets of BXP and BPLP. A majority of the grants of restricted common stock and LTIP Units to employees vest in equal annual installments. Restricted common stock is measured at fair value on the date of grant based on the number of shares granted and the closing price of BXP’s Common Stock on the date of grant as quoted on the New York Stock Exchange. Such value is recognized as an expense ratably over the corresponding employee service period. Because the 2012 OPP Units, 2025 OPP Units and 2013 - 2025 MYLTIP Units are subject to both a service condition and a market condition, the Company recognizes the related compensation expense under the graded vesting attribution method. Under the graded vesting attribution method,
each portion of the award that vests at a different date is accounted for as a separate award and recognized over the period appropriate to that portion so that the compensation cost for each portion should be recognized in full by the time that portion vests. The Company recognizes forfeitures as they occur on its awards of stock-based compensation. Dividends paid on both vested and unvested shares of restricted stock are charged directly to Dividends in Excess of Earnings in BXP’s Consolidated Balance Sheets and Partners’ Capital in BPLP’s Consolidated Balance Sheets. Aggregate stock-based compensation expense associated with restricted stock, LTIP Units, OPP Units and MYLTIP Units was approximately $43.5 million, $42.6 million and $50.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. At December 31, 2025, there was (1) an aggregate of approximately $20.7 million of unrecognized compensation expense related to unvested restricted stock and LTIP Units and (2) $32.3 million unrecognized compensation expense related to unvested 2023 - 2025 MYLTIP Units and 2025 OPP Units. The unrecognized compensation expense related to unvested restricted stock and LTIP Units is expected to be recognized over a weighted-average period of approximately 3.3 years.
BXP did not issue or have outstanding any non-qualified stock options under the 2012 Plan or 2021 Plan during the years ended December 31, 2025, 2024 and 2023.
Employee Stock Purchase Plan
BXP adopted the 1999 Non-Qualified Employee Stock Purchase Plan (the “Stock Purchase Plan”) to encourage the ownership of Common Stock by eligible employees. The Stock Purchase Plan became effective on January 1, 1999 with an aggregate maximum of 250,000 shares of Common Stock available for issuance. The Stock Purchase Plan provides for eligible employees to purchase on the business day immediately following the end of the biannual purchase periods (i.e., January 1-June 30 and July 1-December 31) shares of Common Stock at a purchase price equal to 85% of the average closing prices of the Common Stock during the last ten business days of the purchase period. Information for the Common Stock issues under the Stock Purchase Plan during the years ended December 31, 2025, 2024 and 2023 is as follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Shares issued | 13,302 | 17,237 | 18,552 | |||||||||||||||||
| Weighted average price per share | $ | 61.67 | $ | 56.28 | $ | 51.93 | ||||||||||||||
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.