Carlyle Group Inc.CG
Carlyle Group Inc. Stock Compensation Disclosure
14. Equity-Based Compensation
The Carlyle Group Inc. Amended and Restated 2012 Equity Incentive Plan (the “Equity Incentive Plan,” initially
adopted in May 2012 and as most recently amended and restated on May 29, 2024) is a source of equity-based awards
permitting the Company to grant to Carlyle employees, directors and consultants non-qualified options, share appreciation
rights, common shares, restricted stock units and other awards based on the Company’s shares of common stock. A total of
58,800,000 shares of common stock are authorized for the grant of awards under the Equity Incentive Plan, of which a total of
23,355,929 shares of the Company’s common stock remain available for grant as of December 31, 2025.
The Company recorded equity-based compensation expense, net of forfeitures of $374.7 million, $467.9 million and
$249.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. Equity-based compensation expense
generates deferred tax assets, which are realized when the awards vest. The Company recorded corresponding deferred tax
benefits the years ended December 31, 2025, 2024 and 2023 of $65.2 million, $88.1 million and $41.1 million, respectively. A
portion of the accumulated deferred tax asset associated with equity-based compensation expense was reclassified as a current
tax benefit due to awards vesting during the years ended December 31, 2025, 2024 and 2023. The net impact of the addition/
(reduction) in deferred tax assets due to the equity-based compensation expense recorded during the period less the tax
deduction for awards that vested was $(17.0) million, $39.7 million and $12.7 million for the years ended December 31, 2025,
2024 and 2023, respectively. As of December 31, 2025, the total unrecognized equity-based compensation expense related to
unvested deferred restricted stock units was $514.5 million, which is expected to be recognized over a weighted-average term
of 2.1 years.
Equity-based awards issued to non-employees, including non-employee directors and consultants, are recognized as
general, administrative and other expenses. The grant-date fair value of deferred restricted stock units granted to non-employees
is charged to expense on a straight-line basis over the vesting period. Equity-based awards that require the satisfaction of future
service criteria are recognized over the relevant service period. The expense for equity-based awards issued to non-employees
was $10.7 million, $11.6 million and $6.5 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Restricted Stock Units
The Company grants deferred restricted stock units that are unvested when granted and vest ratably over a service
period, which generally ranges from one year to four years. The grant-date fair value of the deferred restricted stock units
granted to Carlyle’s employees is charged to equity-based compensation expense on a straight-line basis over the required
service period.
During 2021, the Company granted 7.1 million shares long-term, strategic restricted stock units to certain senior
professionals, the majority of which are eligible to vest based on the achievement of annual performance targets over four years
across a number of the Company’s employees. Compensation cost is recognized over the requisite service period if it is
probable that the performance condition will be satisfied. The final tranche of these strategic awards vested in February 2025.
During 2023, the Company granted 6.8 million shares related to equity inducement awards granted in connection with
the appointment of the Company’s Chief Executive Officer, which included 2.1 million time-based restricted stock units which
are eligible to vest ratably in four equal annual installments, beginning in December 2023. The final installment of this award is
eligible to vest in December 2026.
Performance-Vesting Restricted Stock Units
The Company has also granted awards for which the vesting is subject to both a service condition and a market
condition. Compensation cost for the awards containing market conditions, including stock price performance conditions, is
based on a grant-date fair value that factors in the probability that the market conditions will be achieved and is recognized over
the requisite service period on a straight-line basis.
The equity inducement awards granted in connection with the appointment of the Company’s Chief Executive Officer
in 2023 included 4.7 million performance-based restricted stock units which contain stock price performance conditions.
During the years ended December 31, 2025, 2024 and 2023, the Company recognized $16.1 million, $30.0 million, and
$49.5 million, respectively, in equity-based compensation expense related to these awards.
During 2024, the Company granted 13.2 million restricted stock units to certain senior Carlyle professionals that are
eligible to vest in three tranches based on the achievement of stock price performance over service periods of , , and
three years. These awards had a grant-date fair value of approximately $347 million, which was derived using the Monte Carlo
Simulation model. The significant assumptions used to estimate the grant-date fair value of these awards included a risk-free
rate of 4.15% and a concluded equity volatility of 40%. During 2025, the Company granted 3.0 million restricted stock units
with stock price performance conditions to certain senior Carlyle professionals that are eligible to vest in three tranches based
on the achievement of stock price performance over service periods of generally , , and four years. These awards had a
grant-date fair value of $148.8 million, which reflected risk-free rates ranging from 3.62% to 4.23% and a concluded equity
volatility of 40%. The Company recognized $99.6 million and $201.6 million in equity-based compensation expense related to
awards with stock price performance conditions, excluding the equity inducement awards described above, during the years
ended December 31, 2025 and 2024, respectively.
Common Shares
In connection with its strategic investment in NGP, the Company agreed to grant common shares on an annual basis
with a value not to exceed $10.0 million based on a prescribed formula, which will vest over a 42-month period. Because the
Company accounts for its investment in NGP under the equity method of accounting, the fair value of the shares is recognized
as a reduction to principal investment income. During the years ended December 31, 2025, 2024 and 2023, the Company
recognized $7.3 million, $8.9 million and $8.8 million, respectively, as a reduction to principal investment income related to
these shares. In connection with the Restructuring of the Company’s strategic investment in NGP as described in Note 4,
Investments, this obligation to grant its common shares to NGP annually was terminated, following a final grant made with
respect to 2030.
A summary of the status of the Company’s non-vested equity-based awards as of December 31, 2025 and a summary
of changes from December 31, 2022 through December 31, 2025, are presented below:
Unvested Shares | Performance- Vesting Restricted Stock Units | Weighted- Average Grant Date Fair Value | Restricted Stock Units | Weighted- Average Grant Date Fair Value | Unvested Common Shares | Weighted- Average Grant Date Fair Value | |||||
Balance, December 31, 2022 | — | $— | 10,865,248 | $35.78 | 452,880 | $39.73 | |||||
Granted(1) | 4,941,317 | $23.19 | 13,332,230 | $32.36 | 258,579 | $39.73 | |||||
Vested | — | $— | 5,280,029 | $31.86 | 252,530 | $34.85 | |||||
Forfeited | — | $— | 1,685,119 | $32.24 | — | $37.91 | |||||
Balance, December 31, 2023 | 4,941,317 | $23.19 | 17,232,330 | $34.68 | 458,929 | $37.87 | |||||
Granted(1) | 13,286,934 | $26.55 | 5,659,849 | $40.92 | 247,293 | $40.08 | |||||
Vested(2) | 995,848 | $29.86 | 6,932,134 | $33.39 | 247,316 | $34.52 | |||||
Forfeited | 292,253 | $24.55 | 1,993,557 | $33.86 | — | $— | |||||
Balance, December 31, 2024 | 16,940,150 | $25.41 | 13,966,488 | $37.97 | 458,906 | $39.35 | |||||
Granted(1) | 3,121,401 | $49.04 | 4,997,491 | $55.65 | 171,891 | $56.33 | |||||
Vested(3) | 5,362,679 | $30.83 | 7,247,447 | $35.19 | 232,959 | $36.87 | |||||
Forfeited | 484,304 | $23.37 | 377,498 | $43.36 | — | $— | |||||
Balance, December 31, 2025 | 14,214,568 | $28.63 | 11,339,034 | $47.36 | 397,838 | $46.04 |
(1)Includes shares reserved for issuance upon settlement of dividend-equivalent rights carried by certain restricted stock units concurrently with the
settlement of the restricted stock units for shares.
(2)Includes 3,332,881 shares that were retired in connection with the net share settlement of equity-based awards. The Company paid $159.0 million of
taxes related to the net share settlement of equity-based awards during the year ended December 31, 2024, which is included within financing activities
in the consolidated statements of cash flows.
(3)Includes 5,128,944 shares that were retired in connection with the net share settlement of equity-based awards. The Company paid $286.5 million of
taxes related to the net share settlement of equity-based awards during the year ended December 31, 2025, which is included within financing activities
in the consolidated statements of cash flows.
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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.