CDW CorpCDW
CDW Corp Stock Compensation Disclosure
Equity-Based Compensation
Equity-based compensation expense, which is recorded in Selling and administrative expenses in the Consolidated Statements of Operations was as follows:
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Equity-based compensation expense | $ | 83.6 | $ | 64.7 | $ | 93.7 | ||||||||||||||
Income tax benefit(1) | (13.4) | (10.8) | (17.3) | |||||||||||||||||
| Equity-based compensation expense, net of tax | $ | 70.2 | $ | 53.9 | $ | 76.4 | ||||||||||||||
(1)Represents equity-based compensation tax expense at the statutory tax rates. Excess tax benefits associated with equity awards are excluded from this disclosure. The excess tax benefits associated with equity awards related to federal taxes are separately disclosed in Note 10 (Income Taxes) for the year ended December 31, 2025. The excess tax benefits associated with equity awards related to federal, state and foreign taxes are separately disclosed in Note 10 (Income Taxes) for the years ended December 31, 2024 and 2023.
The total unrecognized compensation cost related to non-vested awards was $97 million as of December 31, 2025, and is expected to be recognized over a weighted-average period of 1.9 years.
Long-Term Incentive Plan
The 2021 Long-Term Incentive Plan (“2021 LTIP”) provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, and performance awards. The maximum aggregate number of shares of the Company’s common stock that may be issued under the 2021 LTIP is 22.1 million shares. As of December 31, 2025, 5.8 million shares were available for issuance under the 2021 LTIP. Authorized but unissued shares are reserved for issuance in connection with equity-based awards.
Stock Options
The exercise price of a stock option granted is equal to the fair value of the underlying stock on the date of the grant. Stock options granted under the LTIP have a contractual term of ten years and generally vest ratably over three years. To estimate the fair value of options granted, the Company uses the Black-Scholes option pricing model.
There were no stock options granted in the year ended December 31, 2025. The weighted-average assumptions used to value the stock options granted for the years ended December 31, 2024 and December 31, 2023 were as follows:
| 2024 | 2023 | |||||||||||||
| Weighted average grant date fair value | $ | 76.21 | $ | 64.77 | ||||||||||
Expected volatility(1) | 29.32 | % | 29.94 | % | ||||||||||
Risk-free rate(2) | 4.07 | % | 3.80 | % | ||||||||||
| Expected dividend yield | 1.08 | % | 1.24 | % | ||||||||||
Expected term (in years)(3) | 5.4 | 5.5 | ||||||||||||
(1)Based on a weighting of the historical volatility and implied volatility.
(2)Based on a composite US Treasury rate.
(3)Based on contractual term length and on historical experience of both exercised and unexercised options.
Stock option activity for the year ended December 31, 2025, was as follows:
| Number of Options | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (years) | Aggregate Intrinsic Value | |||||||||||||||||||||||
Outstanding at January 1, 2025 | 2,766,299 | $ | 134.15 | |||||||||||||||||||||||
| Granted | — | — | ||||||||||||||||||||||||
| Forfeited/Expired | (53,173) | 195.68 | ||||||||||||||||||||||||
Exercised(1) | (339,601) | 86.97 | ||||||||||||||||||||||||
Outstanding at December 31, 2025 | 2,373,525 | 139.52 | 4.59 | $ | 52.4 | |||||||||||||||||||||
Vested and exercisable at December 31, 2025 | 2,184,456 | $ | 132.40 | 4.37 | $ | 52.4 | ||||||||||||||||||||
Expected to vest after December 31, 2025 | 189,069 | $ | 221.82 | 7.14 | ||||||||||||||||||||||
(1)The total intrinsic value of stock options exercised during the years ended December 31, 2025, 2024, and 2023 was $28 million, $66 million, and $97 million, respectively.
Restricted Stock Units (“RSUs”)
Restricted stock units represent the right to receive unrestricted shares of the Company’s stock at the time of vesting. RSUs granted under the 2021 LTIP vest either ratably over three years or cliff-vest at the end of three years. The fair value of RSUs is equal to the closing price of the Company’s common stock on date of grant.
RSU activity for the year ended December 31, 2025, was as follows:
| Number of Units | Weighted-Average Grant-Date Fair Value | |||||||||||||
Non-vested at January 1, 2025 | 491,352 | $ | 196.58 | |||||||||||
Granted(1) | 393,125 | 168.80 | ||||||||||||
Vested(2) | (196,261) | 192.23 | ||||||||||||
| Forfeited | (26,979) | 190.28 | ||||||||||||
Non-vested at December 31, 2025 | 661,237 | 181.61 | ||||||||||||
(1)The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2025, 2024, and 2023 was $168.80, $203.24, and $189.30, respectively.
(2)The aggregate fair value of RSUs that vested during the years ended December 31, 2025, 2024, and 2023 was $38 million, $37 million, and $27 million, respectively.
Performance Share Units (“PSUs”)
Performance share units represent the right to receive unrestricted shares of the Company’s stock at the time of vesting. PSUs granted under the 2021 LTIP cliff-vest at the end of three years. The majority of the PSUs will vest
between 0% to 200% of the number of PSUs granted based on the Company’s performance against a cumulative adjusted free cash flow measure and cumulative non-GAAP net income per diluted share measure over a three-year performance period.
PSU activity for the year ended December 31, 2025, was as follows:
| Number of Units | Weighted-Average Grant-Date Fair Value | |||||||||||||
Non-vested at January 1, 2025 | 430,281 | $ | 210.22 | |||||||||||
Granted(1) | 260,230 | 173.02 | ||||||||||||
Attainment adjustment(2) | (52,430) | 196.70 | ||||||||||||
Vested(3) | (236,834) | 193.43 | ||||||||||||
| Forfeited | (21,620) | 207.35 | ||||||||||||
Non-vested at December 31, 2025 | 379,627 | 197.22 | ||||||||||||
(1)The weighted-average grant date fair value of PSUs granted during the years ended December 31, 2025, 2024, and 2023 was $173.02, $224.53, and $210.30, respectively.
(2)During the year ended December 31, 2025, the PSUs that vested at December 31, 2024, were adjusted to reflect final attainment.
(3)The aggregate fair value of PSUs that vested during the years ended December 31, 2025, 2024, and 2023 was $46 million, $42 million, and $35 million, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
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.