Cable One, Inc.CABO
Cable One, Inc. Stock Compensation Disclosure
EQUITY-BASED COMPENSATION
The Company’s stockholders approved the Cable One, Inc. 2022 Omnibus Incentive Compensation Plan (the “2022 Plan”) at the annual meeting of stockholders held on May 20, 2022. The 2022 Plan is designed to promote the interests of the Company and its stockholders by providing the employees and directors of the Company with incentives and rewards to encourage them to continue in the service of the Company and with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company. Any of the directors, officers, employees and consultants of the Company are eligible to be granted one or more of the following types of awards under the 2022 Plan: (1) incentive stock options, (2) non-qualified stock options, (3) restricted stock awards, (4) SARs, (5) RSUs, (6) cash-based awards, (7) performance-based awards, (8) dividend equivalent units ("DEUs" and, together with restricted stock awards and RSUs, "Restricted Stock") and (9) other stock-based awards, including deferred stock units. At December 31, 2025, 237,456 shares were available for issuance under the 2022 Plan.
Beginning in 2025, new RSU grants contain retirement eligibility provisions that result in accelerated expensing of awards granted to associates that satisfy certain age and service conditions.
Compensation expense associated with equity-based awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the award (unless any retirement eligibility provisions are satisfied earlier), with forfeitures recognized as incurred. The Company’s equity-based compensation expense, included within selling, general and administrative expense in the consolidated statements of operations and comprehensive income (loss), was as follows (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Restricted Stock | $ | 42,261 | $ | 31,089 | $ | 27,885 | ||||||||||||||
| SARs | 317 | 625 | 1,535 | |||||||||||||||||
| Total | $ | 42,578 | $ | 31,714 | $ | 29,420 | ||||||||||||||
The Company recognized excess tax shortfalls of $2.6 million, $2.5 million and $2.0 million related to equity-based awards during 2025, 2024 and 2023, respectively. The deferred tax asset related to all outstanding equity-based awards was $8.1 million and $8.6 million as of December 31, 2025 and 2024, respectively.
Restricted Stock. The Company has granted restricted shares of its common stock and RSUs subject to performance-based and/or service-based vesting conditions to officers and certain employees of the Company. Restricted Stock generally cliff-vest on the three-year anniversary of the grant date or in two to four equal ratable installments beginning on the first anniversary of the grant date (generally subject to the holder’s continued employment with the Company through the applicable vesting date), although certain individual awards have been granted with shorter vesting periods from time to time. Settlement of RSUs are in the form of one share of the Company’s common stock and, for employees, will follow vesting. Performance-based restricted stock units are subject to a performance metric related primarily to year-over-year growth in Adjusted EBITDA less capital expenditures and a market metric related to three-year cumulative total shareholder return relative to a peer group. Restricted Stock is subject to the terms and conditions of the 2022 Plan and are otherwise subject to the terms and conditions of the applicable award agreement.
The Company’s non-employee directors are entitled to an annual cash retainer of $90,000, plus an additional annual cash retainer for each committee chair or the lead independent director, and approximately $155,000 in RSUs. Such RSUs will generally be granted on the date of the Company’s annual stockholders’ meeting and will vest on the earlier of the first anniversary of the grant date or the annual stockholders’ meeting date immediately following the grant date, subject to the director’s continued service through such vesting date. Settlement of such RSUs will be in the form of one share of the Company’s common stock and will follow vesting, unless the director has previously elected to defer all or a portion of such settlement until his or her separation from service from the Board or a specified date. Non-employee directors may elect to defer their annual retainer and receive RSUs in lieu of annual cash fees. Any dividends associated with RSUs granted prior to the 2017 annual grant of RSUs are converted into DEUs, which will be delivered at the time of settlement of the associated RSUs.
A summary of Restricted Stock activity is as follows:
| Restricted Stock | Weighted Average Grant Date Fair Value Per Share | |||||||||||||
| Outstanding as of December 31, 2022 | 42,467 | $ | 1,611.99 | |||||||||||
| Granted | 70,949 | $ | 740.39 | |||||||||||
Forfeited(1) | (7,854) | $ | 1,609.26 | |||||||||||
| Vested and issued | (14,130) | $ | 1,505.58 | |||||||||||
| Outstanding as of December 31, 2023 | 91,432 | $ | 952.33 | |||||||||||
| Granted | 114,573 | $ | 539.68 | |||||||||||
Forfeited | (29,495) | $ | 691.93 | |||||||||||
| Vested and issued | (17,845) | $ | 1,325.67 | |||||||||||
| Outstanding as of December 31, 2024 | 158,665 | $ | 660.77 | |||||||||||
| Granted | 132,217 | $ | 378.97 | |||||||||||
Forfeited | (14,056) | $ | 557.34 | |||||||||||
| Vested and issued | (29,804) | $ | 743.43 | |||||||||||
| Outstanding as of December 31, 2025 | 247,022 | $ | 505.85 | |||||||||||
| Vested and deferred as of December 31, 2025 | 10,845 | $ | 688.55 | |||||||||||
(1)Includes 4,093 shares forfeited upon the final achievement determination in 2023 for certain performance-based restricted stock awards.
At December 31, 2025, there was $22.3 million of unrecognized compensation expense related to Restricted Stock, which is expected to be recognized over a weighted average period of 1.1 years.
The significant inputs and resulting weighted average grant date fair value for market-based award grants valued using Monte Carlo simulations were as follows:
| 2025 | 2024 | |||||||||||||
| Risk-free interest rate | 4.2 | % | 4.0 | % | ||||||||||
| Expected volatility | 40.6 | % | 35.4 | % | ||||||||||
| Simulation term (in years) | 2.99 | 2.99 | ||||||||||||
| Weighted average grant date fair value | $ | 417.46 | $ | 599.55 | ||||||||||
Stock Appreciation Rights. The Company has granted SARs to certain officers and other employees of the Company. The SARs are generally scheduled to vest in four equal ratable installments beginning on the first anniversary of the grant date (generally subject to the holder’s continued employment with the Company through the applicable vesting date). The SARs are subject to the terms and conditions of the 2022 Plan and will otherwise be subject to the terms and conditions of the applicable award agreement.
A summary of SAR activity is as follows:
| Stock Appreciation Rights | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | Aggregate Intrinsic Value (in thousands) | Weighted Average Remaining Contractual Term (in years) | ||||||||||||||||||||||||||||
| Outstanding as of December 31, 2022 | 41,115 | $ | 1,072.88 | $ | 262.99 | $ | 591 | 6.1 | ||||||||||||||||||||||||
| Exercised | (374) | $ | 707.17 | $ | 169.54 | $ | 5 | — | ||||||||||||||||||||||||
| Forfeited | (375) | $ | 1,274.05 | $ | 280.58 | |||||||||||||||||||||||||||
| Expired | (4,875) | $ | 936.78 | $ | 219.98 | $ | — | — | ||||||||||||||||||||||||
| Outstanding as of December 31, 2023 | 35,491 | $ | 1,093.30 | $ | 269.69 | $ | — | 5.1 | ||||||||||||||||||||||||
| Forfeited | (875) | $ | 1,835.26 | $ | 463.66 | |||||||||||||||||||||||||||
| Expired | (6,250) | $ | 1,282.49 | $ | 316.16 | $ | — | — | ||||||||||||||||||||||||
| Outstanding as of December 31, 2024 | 28,366 | $ | 1,028.73 | $ | 253.47 | $ | — | 3.9 | ||||||||||||||||||||||||
| Expired | (11,750) | $ | 750.73 | $ | 174.22 | $ | — | — | ||||||||||||||||||||||||
| Outstanding as of December 31, 2025 | 16,616 | $ | 1,225.32 | $ | 309.52 | $ | — | 3.5 | ||||||||||||||||||||||||
| Exercisable as of December 31, 2025 | 16,616 | $ | 1,225.32 | $ | 309.52 | $ | — | 3.5 | ||||||||||||||||||||||||
At December 31, 2025, there was no unrecognized compensation expense related to SARs.
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.