PATHWARD FINANCIAL, INC.CASH
PATHWARD FINANCIAL, INC. Stock Compensation Disclosure
STOCK COMPENSATION
On February 27, 2024, the shareholders of the Company voted to approve the Pathward Financial, Inc. 2023 Omnibus Incentive Plan (the "Plan"). The Plan permits the granting of various types of awards including but not limited to nonvested (restricted) shares and PSUs to certain officers and directors of the Company. Awards may be granted by the Compensation Committee of the Board of Directors based on the performance of the award recipients or other relevant factors.
Shares have previously been granted each year to executives and senior leadership members under the applicable Company incentive plan. In addition, beginning in fiscal year 2025, awards were made to certain employees as time-vesting restricted stock units settleable in shares ("RSUs"). These shares and RSUs generally vest at various times ranging from immediately to three years based on circumstances at time of grant. The grant date fair value is determined based on the fair market value of the Company’s stock on the grant date, determined in accordance with applicable accounting standards. Director shares are issued to the Company’s directors, and these shares have historically vested from immediately to up to one year from the grant date.
The Company also grants selected executives PSU awards. The vesting of these awards is contingent on meeting company-wide performance goals, including earnings per share. The awards generally vest over a period of three years and have payout levels ranging from a threshold of 50% to a maximum of 200%. Upon vesting, each PSU earned is converted into one share of common stock.
The fair value of the PSUs (other than PSUs subject to a market condition) is determined by the dividend-adjusted fair value on the grant date for those awards subject to a performance condition. For those PSUs subject to a market condition, a simulation valuation is performed.
In addition, during the first and second quarters of fiscal year 2017, shares were granted to certain executive officers of the Company in connection with their signing of employment agreements with the Company. These stock awards generally vest in equal installments over eight years. Finally, awards of shares or RSUs may be made at other times during the fiscal year for new hire, promotion, or retention awards.
The following tables show the activity of share awards (including shares of restricted stock subject to vesting, fully-vested restricted stock, RSUs, and PSUs) granted, exercised or forfeited under all of the Company’s incentive plans during the fiscal years ended September 30, 2025 and 2024.
| Number of Shares | Weighted Average Fair Value at Grant | |||||||
| Restricted Stock Awards | ||||||||
| Nonvested shares outstanding, September 30, 2024 | 248,670 | $ | 41.19 | |||||
| Granted | 15,600 | 77.42 | ||||||
| Vested | (179,669) | 41.24 | ||||||
| Forfeited or expired | (2,904) | 48.17 | ||||||
| Nonvested shares outstanding, September 30, 2025 | 81,697 | $ | 47.77 | |||||
| Nonvested shares outstanding, September 30, 2023 | 370,151 | $ | 35.87 | |||||
| Granted | 181,117 | 50.61 | ||||||
| Vested | (288,734) | 40.22 | ||||||
| Forfeited or expired | (13,864) | 42.49 | ||||||
| Nonvested shares outstanding, September 30, 2024 | 248,670 | $ | 41.19 | |||||
| RSUs | ||||||||
| Nonvested shares outstanding, September 30, 2024 | — | $ | — | |||||
| Granted | 97,062 | 79.20 | ||||||
| Vested | — | — | ||||||
| Forfeited or expired | (4,442) | 79.39 | ||||||
| Nonvested shares outstanding, September 30, 2025 | 92,620 | $ | 79.19 | |||||
| Number of Units | Weighted Average Fair Value at Grant | |||||||
| PSUs | ||||||||
| PSUs outstanding, September 30, 2024 | 142,462 | $ | 47.24 | |||||
Granted(1) | 34,208 | 79.47 | ||||||
| Vested | (34,304) | 57.21 | ||||||
| Forfeited or expired | — | — | ||||||
| PSUs outstanding, September 30, 2025 | 142,366 | $ | 52.59 | |||||
| PSUs outstanding, September 30, 2023 | 155,804 | $ | 41.20 | |||||
Granted(2) | 52,125 | 49.61 | ||||||
| Vested | (60,984) | 55.47 | ||||||
| Forfeited or expired | (4,483) | 44.59 | ||||||
| PSUs outstanding, September 30, 2024 | 142,462 | $ | 47.24 | |||||
(1) The activity in this table includes 34,304 shares related to the fiscal year 2022 PSUs, which are included in this table under the assumption of a target performance achievement. The final performance was assessed after September 30, 2024, resulted in an achievement greater than target, and an additional 6,847 shares were allocated to the participants in the plan. | ||||||||
(2) The activity in this table includes 60,984 shares related to the fiscal year 2021 PSUs, which are included in this table under the assumption of a target performance achievement. The final performance was assessed after September 30, 2023, resulted in an achievement greater than target, and an additional 47,252 shares were allocated to the participants in the plan. | ||||||||
Compensation expense for share-based awards is recorded over the vesting period at the fair value of the award at the time of the grant. The fair value of nonvested (restricted) shares and PSUs granted under the Company’s incentive plans is equal to the fair market value of the underlying stock at the grant date, adjusted for dividends where applicable. The Company has elected to record forfeitures as they occur.
The following table shows the effect to income, net of tax benefits, of share-based compensation expense recorded:
| Fiscal Year Ended September 30, | |||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
Total employee stock-based compensation expense recognized in income, net of tax effects of $1,651, $1,873, and $1,838, respectively | $ | 7,856 | $ | 8,416 | $ | 8,465 | |||||||||||
As of September 30, 2025, stock-based compensation expense not yet recognized in income totaled $7.7 million, which is expected to be recognized over a weighted-average remaining period of 1.64 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 25, 2025 | Showing above |
| 2024 | Nov 26, 2024 | |
| 2023 | Nov 21, 2023 | |
| 2022 | Nov 22, 2022 | |
| 2021 | Nov 23, 2021 | |
| 2020 | Nov 30, 2020 | |
| 2019 | Nov 26, 2019 | |
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.