CREDIT ACCEPTANCE CORPCACC
CREDIT ACCEPTANCE CORP Stock Compensation Disclosure
STOCK-BASED COMPENSATION PLANS
Pursuant to our Amended and Restated Incentive Compensation Plan (the “Incentive Plan”), at any time prior to April 12, 2031, we can grant stock-based awards in the form of restricted stock, restricted stock units, and stock options to team members, officers, directors, and contractors. On April 10, 2024, our board of directors approved an amendment to the Incentive Plan, subject to shareholder approval, increasing the number of shares authorized for issuance by 250,000 shares, to 3,250,000 shares. Shareholder approval was received at our annual meeting of shareholders on June 5, 2024. The shares available for future grants under the Incentive Plan totaled 21,270 as of December 31, 2025.
Restricted Stock Units
We grant performance-based and time-based restricted stock units to team members and directors in accordance with the Incentive Plan. The grant-date fair value per share is estimated to equal the market price of our common stock on the date of grant. Each restricted stock unit represents and has a value equal to one share of common stock. Based on the terms of individual restricted stock unit grant agreements, restricted stock units vest under one of the following methods:
•For executive officers and senior leaders, over a period of ten years, based on continuous employment.
•For certain team members, over a period of three or four years, based on continuous employment.
•For non-employee directors, over a period of three years, based on continuous service as a director.
A summary of the restricted stock unit (“RSU”) activity under the Incentive Plan for the year ended December 31, 2025, is presented below:
| Restricted Stock Units | Number of Restricted Stock Units | Weighted Average Grant-Date Fair Value Per Share | Aggregate Intrinsic Value (2) (in millions) | Weighted Average Remaining Contractual Term (in years) | |||||||||||||||||||||||||
| Outstanding as of December 31, 2024 | 533,447 | $ | 407.15 | ||||||||||||||||||||||||||
| Granted | 243,351 | 453.50 | |||||||||||||||||||||||||||
| Converted | (75,911) | 220.69 | |||||||||||||||||||||||||||
| Forfeited | (3,264) | 478.24 | |||||||||||||||||||||||||||
| Outstanding as of December 31, 2025 (1) | 697,623 | $ | 443.27 | $ | 309.4 | 3.9 | (3) | ||||||||||||||||||||||
| Vested as of December 31, 2025 | 56,859 | $ | 124.94 | $ | 25.2 | 0.5 | |||||||||||||||||||||||
(1)No RSUs outstanding at December 31, 2025 were convertible to shares of common stock.
(2)The intrinsic value of RSUs is measured by applying the closing stock price as of December 31, 2025 to the applicable number of units.
(3)The calculation of weighted average remaining contractual term of RSUs outstanding excludes 171,917 RSUs that are to be settled in common stock on future dates that are currently not known, as they are contingent on the timing of the team members' retirement from the Company.
The grant-date weighted average fair value of RSUs granted in 2025, 2024, and 2023 was $453.50, $484.58, and $454.04, respectively. The total intrinsic value of RSUs settled in common stock during 2025, 2024, and 2023 was $33.7 million, $32.2 million, and $84.8 million, respectively.
Stock option grants
We have granted time-based stock options to team members and directors in accordance with the Incentive Plan. Based on the terms of individual stock option grant agreements, the stock options:
•vest and become exercisable in or equal annual installments beginning on the first anniversary of the date on which the options were granted, based on continuous employment or service, and
•expire either or ten years from the date of the grant.
A summary of the stock option activity under the Incentive Plan for the year ended December 31, 2025, is presented below:
| Stock Options | Number of Stock Options | Weighted Average Exercise Price Per Share | Aggregate Intrinsic Value (1) (in millions) | Weighted Average Remaining Contractual Term (in years) | ||||||||||||||||||||||
Outstanding as of December 31, 2024 | 605,466 | $ | 367.88 | |||||||||||||||||||||||
| Exercised | (69,419) | 337.65 | ||||||||||||||||||||||||
Outstanding as of December 31, 2025 | 536,047 | $ | 371.79 | $ | 42.9 | 2.2 | ||||||||||||||||||||
Exercisable as of December 31, 2025 | 521,047 | $ | 367.94 | $ | 42.8 | 2.2 | ||||||||||||||||||||
Unvested as of December 31, 2025 | 15,000 | $ | 505.55 | $ | 0.1 | 2.4 | ||||||||||||||||||||
(1)The intrinsic value of stock options is the amount by which the market price of the stock as of December 31, 2025 exceeded the exercise price of the options.
The total intrinsic value of stock options exercised during 2025 was $12.0 million. Net cash proceeds from the exercise of stock options in 2025 was $23.5 million.
Stock-based compensation expense
Stock-based compensation expense consists of the following:
| (In millions) | For the Years Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Restricted stock units | $ | 45.7 | $ | 12.1 | $ | 5.6 | |||||||||||
| Stock options | 5.0 | 32.9 | 33.5 | ||||||||||||||
| Total | $ | 50.7 | $ | 45.0 | $ | 39.1 | |||||||||||
Pursuant to our Amended and Restated Incentive Compensation Plan, we can grant stock-based awards in the form of restricted stock, restricted stock units, and stock options to team members, officers, directors, and contractors. Instead of a short-term compensation program providing for rolling, annual equity awards to our executive officers and senior leaders, we utilize a multi-year compensation program that grants a one-time equity award at the beginning of the compensation program period that is intended to incentivize recipients over the multi-year compensation period. Our current compensation program for executive officers and senior leaders consists primarily of one-time equity awards with a 10-year vesting period. We expect to recognize the remaining expense for stock-based awards outstanding as of December 31, 2025 over a weighted-average period of 4.2 years as follows:
| (In millions) | ||||||||||||||||||||
| For the Years Ended December 31, | Restricted Stock Units | Stock Options | Total Projected Expense | |||||||||||||||||
| 2026 | $ | 47.0 | $ | 1.2 | $ | 48.2 | ||||||||||||||
| 2027 | 39.7 | — | 39.7 | |||||||||||||||||
| 2028 | 33.1 | — | 33.1 | |||||||||||||||||
| 2029 | 25.0 | — | 25.0 | |||||||||||||||||
| 2030 | 23.3 | — | 23.3 | |||||||||||||||||
| Thereafter | 89.6 | — | 89.6 | |||||||||||||||||
| Total | $ | 257.7 | $ | 1.2 | $ | 258.9 | ||||||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2015 | Feb 12, 2016 | |
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.