CF Industries Holdings, Inc.CF
CF Industries Holdings, Inc. Stock Compensation Disclosure
Stock-based Compensation
2022 Equity and Incentive Plan
In May 2022, our shareholders approved the CF Industries Holdings, Inc. 2022 Equity and Incentive Plan (the 2022 Equity and Incentive Plan), including 2.5 million new shares of the Company’s common stock available for grant thereunder as part of our pay-for-performance compensation program, which we use to provide incentives that are aligned with the interests of our shareholders. The 2022 Equity and Incentive Plan replaced the CF Industries Holdings, Inc. 2014 Equity and Incentive Plan (the 2014 Equity and Incentive Plan) and permits grants of stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards, which in each case may be conditioned on performance criteria, to employees and certain consultants of the Company and its subsidiaries and non-employee directors of the Company.
Share Reserve and Individual Award Limits
The maximum number of shares reserved for the grant of awards under the 2022 Equity and Incentive Plan is the sum of (i) 2.5 million shares, plus (ii) the number of shares that remain available for new grants under the 2014 Equity and Incentive Plan when the 2022 Equity and Incentive Plan was approved by shareholders, plus (iii) the number of shares subject to stock options granted under the 2014 Equity and Incentive Plan or the CF Industries Holdings, Inc. 2009 Equity and Incentive Plan that were outstanding when the 2022 Equity and Incentive Plan was approved by shareholders, but only to the extent such awards terminate or expire without the delivery of shares, plus (iv) 1.61 times the number of shares subject to restricted stock or restricted stock unit awards (including performance restricted stock unit awards) granted under the 2014 Equity and Incentive Plan that were outstanding when the 2022 Equity and Incentive Plan was approved by shareholders, but only to the extent such awards terminate or expire without the delivery of shares. In no event will the number of shares available for issuance under the 2022 Equity and Incentive Plan exceed 10,615,515 shares. Shares issued with respect to all awards granted under the 2022 Equity and Incentive Plan are counted against the share reserve on a one-for-one basis. The shares subject to any outstanding award under the 2022 Equity and Incentive Plan will be available for subsequent award and issuance under the 2022 Equity and Incentive Plan to the extent those awards subsequently expire, are forfeited or cancelled, or terminate for any reason prior to issuance of the shares subject to those awards. In addition, shares tendered or withheld in payment of the exercise price of an award and shares withheld by the Company to satisfy tax withholding obligations related to an award will be available for subsequent award under the 2022 Equity and Incentive Plan. As of December 31, 2025, we had approximately 6.3 million shares available for future awards under the 2022 Equity and Incentive Plan. The 2022 Equity and Incentive Plan provides that
no more than 5.0 million shares may be issued pursuant to the exercise of incentive stock options, subject to adjustment upon certain capitalization events.
Restricted Stock Awards, Restricted Stock Units and Performance Restricted Stock Units
The fair value of a restricted stock award (RSA) or a restricted stock unit (RSU) is equal to the number of shares subject to the award multiplied by the closing market price of our common stock on the date of grant. We estimated the fair value of each performance restricted stock unit (PSU) on the date of grant using a Monte Carlo simulation. Generally, RSUs vest in three equal annual installments following the date of grant. PSUs are granted to key employees and generally vest three years from the date of grant subject to the attainment of applicable performance goals during the performance period. The RSAs awarded to non-management members of the Board vest the earlier of one year from the date of the grant or the date of the next annual stockholder meeting. During the vesting period, the holders of the RSAs are entitled to dividends and voting rights. During the vesting period, the holders of the RSUs are paid dividend equivalents in cash to the extent we pay cash dividends. PSUs accrue dividend equivalents to the extent we pay cash dividends on our common stock during the performance and vesting periods. Upon vesting of the PSUs, holders are paid the cash equivalent of the dividends paid during the performance and vesting periods based on the shares of common stock, if any, delivered in settlement of PSUs. Holders of RSUs and PSUs are not entitled to voting rights unless and until the awards have vested.
A summary of restricted stock activity during the year ended December 31, 2025 is presented below.
| Restricted Stock Awards | Restricted Stock Units | Performance Restricted Stock Units | |||||||||||||||||||||||||||||||||
| Shares | Weighted- Average Grant-Date Fair Value | Shares | Weighted- Average Grant-Date Fair Value | Shares | Weighted- Average Grant-Date Fair Value | ||||||||||||||||||||||||||||||
| Outstanding as of December 31, 2024 | 23,367 | $ | 79.59 | 471,657 | $ | 79.36 | 272,000 | $ | 84.66 | ||||||||||||||||||||||||||
| Granted | 24,033 | 81.98 | 262,093 | 85.66 | 152,390 | 87.60 | |||||||||||||||||||||||||||||
Restrictions lapsed (vested)(1) | (23,367) | 79.59 | (197,545) | 78.15 | (141,616) | 85.25 | |||||||||||||||||||||||||||||
| Forfeited | — | — | (13,105) | 83.64 | (3,257) | 85.89 | |||||||||||||||||||||||||||||
| Outstanding as of December 31, 2025 | 24,033 | 81.98 | 523,100 | 82.86 | 279,517 | 85.95 | |||||||||||||||||||||||||||||
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(1)For performance restricted stock units, the shares represent the performance restricted stock units granted in 2022, for which the three-year performance period ended December 31, 2024.
The 2025, 2024 and 2023 weighted-average grant-date fair value for RSAs was $81.98, $79.59 and $74.79, for RSUs was $85.66, $80.45 and $81.44, and for PSUs was $87.60, $86.76 and $93.61, respectively. The fair value of restricted stock vested was $35 million, $62 million and $55 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Stock Options
Under the 2014 Equity and Incentive Plan and our other predecessor plans, we granted to plan participants nonqualified stock options to purchase shares of our common stock. The exercise price of these options was equal to the market price of our common stock on the date of grant. The contractual life of each option was ten years and generally one-third of the options vested on each of the first three anniversaries of the date of grant. No stock option awards were granted under the 2014 Equity and Incentive Plan or our other predecessor plans after 2017, and no stock option awards have been granted under the 2022 Equity and Incentive Plan.
As of December 31, 2025, 54,160 options were outstanding and exercisable, with a weighted‑average exercise price of $32.85, a weighted‑average remaining contractual term of 0.8 years, and an aggregate intrinsic value of $2 million. The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $77.34 as of December 31, 2025, which would have been received by the option holders had all option holders exercised their options as of that date. During 2025, 22,485 options were exercised, which had a pre‑tax intrinsic value of $1 million, and no related tax benefit was realized.
Compensation Cost
Compensation cost is recorded primarily in selling, general and administrative expenses. The following table summarizes stock-based compensation costs and related income tax benefits:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Stock-based compensation expense | $ | 45 | $ | 36 | $ | 37 | |||||||||||
| Income tax benefit | (4) | (8) | (9) | ||||||||||||||
| Stock-based compensation expense, net of income taxes | $ | 41 | $ | 28 | $ | 28 | |||||||||||
As of December 31, 2025, pre-tax unrecognized compensation cost was $24 million for RSAs and RSUs, which will be recognized over a weighted-average period of 1.6 years, and $6 million for PSUs, which will be recognized over a weighted-average period of 1.6 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 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.