Consensus Cloud Solutions, Inc.CCSI
Consensus Cloud Solutions, Inc. Stock Compensation Disclosure
Equity Incentive and Employee Stock Purchase Plan
The Company’s share-based compensation plans include the 2021 Equity Incentive Plan (the “2021 Plan”) and the 2021 Employee Stock Purchase Plan (the “Purchase Plan”).
The 2021 Equity Incentive Plan
In December 2021, Consensus’ Board of Directors adopted the 2021 Plan, which provides for the grant of incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and share units, and other share-based awards. 4,000,000 shares of common stock are authorized to be used for 2021 Plan purposes. As of December 31, 2025, 870,811 shares were available to be issued under the 2021 Plan.
Restricted Stock and Restricted Stock Units
The Company has awarded restricted stock and restricted stock units to its Board of Directors and certain employees pursuant to the 2021 Plan. Compensation expense resulting from restricted stock and restricted stock unit grants is measured at fair value on the date of grant and is recognized as share-based compensation expense over the applicable vesting period. Vesting periods are generally one year for awards to members of the Company’s Board of Directors, or four years for employees and five years for the Chief Executive Officer and Chief Operating Officer. The Company granted 713,155, 809,439 and 567,218 restricted stock units during the years ended December 31, 2025, 2024 and 2023, respectively.
Restricted Stock Units with Market Conditions or Performance Conditions
The Company has awarded certain key employees market-based and performance-based restricted stock units pursuant to the 2021 Plan. The market-based awards have vesting conditions that are based on specified stock price targets of the Company’s common stock. For awards with market conditions, the conditions were factored into the grant date fair value using a Monte Carlo valuation model, which utilized multiple input variables to determine the probability of the Company achieving the specified stock price targets for 20 out of 30 trading days or 20 out of 25 trading days (look-back period), based on the award agreement. Share-based compensation expense related to an award with a market condition is recognized over the requisite service period using the graded-vesting method, unless the market condition has been met and the requisite service period has been completed, then the expense will be accelerated and recognized in the period that the market condition and service period requirement have been met. For awards with performance-based conditions, share-based compensation expense is recognized using the graded-vesting method over the requisite service period if it is probable that the performance condition will be satisfied. The performance vesting conditions generally relate to the achievement of specified internal financial and operational targets. The share-based compensation expense for performance-based awards is evaluated each quarter based on the achievement of the performance conditions. The effect of a change in the estimated number of performance-based awards expected to be earned is recognized in the period those estimates are revised.
During the years ended December 31, 2025, 2024 and 2023, the Company granted 15,335, 190,749 and 122,150 shares, respectively, of market-based and performance-based restricted stock units. The per share weighted-average grant-date fair values of the performance-based awards granted during the year ended December 31, 2025 were $28.03. There were no performance-based awards granted during the years ended December 31, 2024 and 2023. The per share weighted-average grant-date fair values of the market-based awards granted during the years ended December 31, 2024 and 2023 were $24.34 and $23.69, respectively, as determined by the Monte Carlo valuation. There were no market-based awards granted during the year ended December 31, 2025. Notwithstanding the valuation, for the underlying stock price assumption, all market-based stock awards utilize the market value at the close of business on the date the grant is awarded.
The Monte Carlo valuation model used to estimate the fair value of the market-based awards granted utilized the following weighted-average assumptions:
| December 31, 2024 | December 31, 2023 | |||||||||||||
| Underlying stock price at valuation date | $ | 25.04 | $ | 25.00 | ||||||||||
| Expected volatility | 63.9 | % | 50.0 | % | ||||||||||
| Risk-free interest rate | 4.1 | % | 4.2 | % | ||||||||||
| Contractual term | 8 years | 8 years | ||||||||||||
There was no restricted stock activity for the year ended December 31, 2025. Restricted stock activity for the years ended December 31, 2024 and 2023 is set forth below:
| Number of Shares | Weighted-Average Grant-Date Fair Value | ||||||||||
Nonvested at January 1, 2023 | 35,416 | $ | 38.42 | ||||||||
| Granted | — | — | |||||||||
| Vested | (19,737) | 37.77 | |||||||||
| Canceled | — | — | |||||||||
Nonvested at December 31, 2023 | 15,679 | 39.24 | |||||||||
| Granted | — | — | |||||||||
| Vested | (9,225) | 37.95 | |||||||||
| Canceled | (6,454) | 41.07 | |||||||||
Nonvested at December 31, 2024 | — | $ | — | ||||||||
As of December 31, 2025, the Company had no outstanding restricted stock awards and no unrecognized share-based compensation cost related to its restricted stock awards, as they had been fully expensed as of December 31, 2024.
Restricted stock unit activity for the years ended December 31, 2025, 2024 and 2023 is set forth below:
| Number of Shares | Weighted-Average Grant-Date Fair Value | ||||||||||
Outstanding at January 1, 2023 | 1,082,451 | $ | 51.63 | ||||||||
| Granted | 689,368 | 27.21 | |||||||||
| Vested | (173,356) | 55.96 | |||||||||
| Canceled | (37,906) | 55.45 | |||||||||
Outstanding at December 31, 2023 | 1,560,557 | 40.27 | |||||||||
| Granted | 1,000,188 | 24.04 | |||||||||
| Vested | (383,225) | 37.58 | |||||||||
| Canceled | (81,204) | 34.41 | |||||||||
| Outstanding at December 31, 2024 | 2,096,316 | 33.24 | |||||||||
| Granted | 728,490 | 22.60 | |||||||||
| Vested | (553,636) | 32.31 | |||||||||
| Canceled | (68,665) | 28.67 | |||||||||
| Outstanding at December 31, 2025 | 2,202,505 | $ | 30.10 | ||||||||
The total fair value as of the respective vesting dates of restricted stock units that vested during the years ended December 31, 2025, 2024 and 2023 was $12.8 million, $8.8 million, and $5.1 million, respectively. As of December 31, 2025, the Company had unrecognized share-based compensation cost related to its restricted stock units of $34.3 million, which is expected to be recognized over a weighted-average period of 2.6 years.
The Company recognized $1.9 million, $1.9 million and $0.9 million of tax benefits related to the share-based compensation costs for the years ended December 31, 2025, 2024 and 2023, respectively, related to the 2021 Plan.
Employee Stock Purchase Plan (“ESPP”)
In October of 2021, Consensus established the Purchase Plan, which provides the issuance of a maximum of 1,000,000 shares of common stock. Under the Purchase Plan, eligible employees can have up to 15% of their earnings withheld, up to certain maximums, to be used to purchase shares of Consensus’ common stock on certain plan-defined dates. The purchase price for each offering period is 85% of the lesser of the fair market value of a share of common stock of the Company on the
first or last day of the offering period, with each offering period being six months. As of December 31, 2025, 751,973 shares were available to be issued under the Purchase Plan.
The plan includes a provision which allows for the more favorable of two exercise prices, commonly referred to as a “look-back” feature. The purchase price discount and the look-back feature cause the Purchase Plan to be compensatory and therefore, the Company is required to recognize compensation expense. The compensation cost is recognized on a straight-line basis over the requisite service period, which is the same as the offering period of the Purchase Plan. The Company used the Black-Scholes option pricing model to calculate the estimated fair value of the purchase right issued under the Purchase Plan. The expected volatility is based on historical volatility of the Company’s common stock. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a term equal to the expected term of the option assumed at the date of grant. Estimated forfeiture rates were 5.30%, 5.93% and 7.69% as of December 31, 2025, 2024 and 2023, respectively.
During 2025, 2024 and 2023, 67,173, 81,674 and 56,663 Consensus shares were purchased under the Purchase Plan for a weighted average purchase price of $19.45, $16.33 and $24.45 per share, respectively. Cash received upon issuance of the Company’s common stock under the Purchase Plan was $1.3 million, $1.3 million and $1.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, there are 751,973 shares available under the Purchase Plan for future issuance.
The compensation expense related to the Purchase Plan has been estimated utilizing the following assumptions:
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
| Risk-free interest rate | 3.80% | 4.44% | 5.38% | ||||||||||||||
| Expected term (in years) | 0.5 | 0.5 | 0.5 | ||||||||||||||
| Dividend yield | 0.00% | 0.00% | 0.00% | ||||||||||||||
| Expected volatility | 50.47% | 49.53% | 53.57% | ||||||||||||||
| Weighted average volatility | 50.47% | 49.53% | 53.57% | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Apr 15, 2022 | |
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.