Community Healthcare Trust IncCHCT
Community Healthcare Trust Inc Stock Compensation Disclosure
STOCK INCENTIVE PLANS
2024 Incentive Plan
The 2024 Incentive Plan, as amended, authorized the Company to award 1,150,000 shares of the Company's common stock outstanding at December 31, 2025. Shares issued under the 2024 Incentive Plan are generally subject to long-term, fixed vesting periods of 3 to 8 years. If an employee or director voluntarily terminates his or her relationship with the Company or is terminated for cause before the end of the vesting period, the shares are forfeited. Recipients of restricted stock awards and time-based units have the right to receive dividends and the right to vote the shares. As of December 31, 2025, the Company had granted a total of 473,592 restricted shares or restricted stock units under the Plan Pool as award shares to its employees and directors, with 676,408 authorized shares remaining which had not been granted.
Programs under the 2024 Incentive Plan
Alignment of Interest Program
The Alignment of Interest Program, as amended, authorized the Company to grant 1,000,000 shares of the Company’s common stock to its employees and directors in lieu of the employee's or director's cash compensation (the "Program Pool"), at their election. As of December 31, 2025, the Company had issued a total of 976,853 restricted shares under the Program Pool in lieu of cash compensation to its employees and directors, with 23,147 authorized shares remaining which had not been issued. See Note 16 – Subsequent Events for additional shares authorized under this program in January 2026.
The Company's Alignment of Interest Program is designed to provide the Company's employees and directors with an incentive to remain with the Company and to incentivize long-term growth and profitability. Under the Alignment of Interest Program, employees may elect to defer up to 100% of their base salary and other compensation (certain employees are limited to 50% of their base salary, bonus and any other compensation), and directors may elect to defer up to 100% of their director fee. The number of shares granted will be increased through a Company match depending on the length of the vesting period selected by the employee or director. Employees may select vesting periods of 3 years, 5 years, or 8 years, subject to certain retirement eligibility requirements, with a 30%, 50%, and 100% Company match, respectively. Directors may select vesting periods of 1 year, 2 years, or 3 years, with a 20%, 40%, or 60% Company match, respectively.
Executive Officer Incentive Program
The Executive Officer Incentive Program provides for individual and Company performance awards of cash, restricted stock and/or three-year long term incentive plan (“LTIP”) awards consisting of RSUs. Company performance awards are based on certain Company metrics which may include adjusted funds from operations ("AFFO"), dividend payout ratio, and debt to total capitalization ratio, as applicable.
Non-Executive Officer Incentive Program
The Non-Executive Officer Incentive Program provides for individual and Company performance awards of cash and/or restricted stock. Company performance awards are based on certain Company metrics which may include AFFO, dividend payout ratio, and debt to total capitalization ratio, as applicable.
Restricted Stock Awards
A summary of the activity under the 2024 Incentive Plan and previous 2014 Incentive Plan that expired in 2024 and related information for the years ended December 31, 2025, 2024, and 2023 is included in the table below.
| Year Ended December 31, | ||||||||||||||
| (dollars and shares in thousands, except per share amounts) | 2025 | 2024 | 2023 | |||||||||||
| Stock-based awards, beginning of year | 1,560 | 1,374 | 1,708 | |||||||||||
| Stock in lieu of compensation | 153 | 157 | 141 | |||||||||||
| Stock awards | 158 | 182 | 220 | |||||||||||
| Total Granted | 311 | 339 | 361 | |||||||||||
Vested (1) | (349) | (152) | (692) | |||||||||||
| Forfeited | (4) | (1) | (3) | |||||||||||
| Stock-based awards, end of year | 1,518 | 1,560 | 1,374 | |||||||||||
| Weighted average grant date fair value, per share, of: | ||||||||||||||
| Stock-based awards, beginning of year | $ | 35.52 | $ | 36.45 | $ | 37.43 | ||||||||
| Stock-based awards granted during the year | $ | 17.25 | $ | 21.69 | $ | 36.78 | ||||||||
| Stock-based awards vested during the year | $ | 31.06 | $ | 22.37 | $ | 35.38 | ||||||||
| Stock-based awards forfeited during the year | $ | 26.16 | $ | 39.21 | $ | 43.83 | ||||||||
| Stock-based awards, end of year | $ | 31.89 | $ | 35.52 | $ | 36.45 | ||||||||
| Grant date fair value of shares granted during the year | $ | 5,376 | $ | 7,355 | $ | 13,220 | ||||||||
| ___________ | ||||||||||||||
(1) Vested shares for the twelve months ended December 31, 2025 included the accelerated vesting of 198 thousand shares upon the termination of our former Executive Vice President, Asset Management. Vested shares for the twelve months ended December 31, 2023 included the accelerated vesting of 625 thousand shares upon the passing of our former CEO and President. | ||||||||||||||
The Company had unvested restricted stock-based compensation that had not yet been recognized of approximately $17.1 million and $25.2 million, respectively, at December 31, 2025 and 2024. The vesting periods for the non-vested shares granted during 2025 ranged from 3 to 8 years with a weighted-average amortization period remaining as of December 31, 2025 of approximately 4.75 years. The weighted average amortization period remaining for all unvested grants as of December 31, 2025 was approximately 3.5 years. Compensation expense recognized during the years ended December 31, 2025, 2024, and 2023 from the amortization of the value of shares over the vesting period was approximately $13.4 million, $8.9 million and $20.0 million, respectively, which are included in general and administrative expenses on the consolidated statements of operations.
Accelerated Amortization and Vestings of Restricted Stock
The Company's former Executive Vice President, Asset Management was terminated effective May 31, 2025. In accordance with his employment agreement, his unvested restricted shares totaling 198,015 shares vested and his unvested restricted stock units totaling 18,275 units vested at target upon termination. As such, upon termination and vesting of these shares and restricted stock units, the Company accelerated the unamortized remaining balance of his deferred compensation at May 31, 2025 and recognized $4.6 million of amortization expense.
The Company's former CEO and President, Timothy Wallace, passed away in March 2023. At the time of his passing, Mr. Wallace had 624,725 shares of restricted stock that had not vested or been fully amortized. In accordance with the terms of his employment agreement, the Company accelerated the vesting of these shares and accelerated the unamortized remaining balance of deferred compensation related to these unvested shares, recognizing an additional $11.8 million of amortization expense in 2023.
Restricted Stock Units
On July 24, 2025, under the 2024 Incentive Plan, the Company granted performance-based and time-based RSUs to its executive officers. These RSUs are forward-looking with a three-year performance period beginning July 1, 2025. The performance-based RSUs were valued by independent specialists utilizing a Monte Carlo simulation to calculate the grant date fair values of $15.25 per share for the Absolute TSR RSUs and $18.16 per share for the Relative TSR RSUs. The grant date fair value of the time-based RSUs was based on the Company's stock price on the grant date of $16.40. The combined weighted average grant date fair value of the RSUs granted was $16.59 per share. The following assumptions were used in valuing the performance-based RSUs:
| Volatility | 31.0 | % | ||||||||||||
| Dividend assumption | 8.3 | % | ||||||||||||
| Expected term | 3 years | |||||||||||||
| Risk-free rate | 3.9 | % | ||||||||||||
| Stock price (per share) | $ | 16.40 | ||||||||||||
A summary of the Company's RSU activity during the twelve months ended months ended December 31, 2025, 2024 and 2023, respectively, is included in the table below, as well as compensation expense recognized from the amortization of the value of RSUs over the applicable vesting periods, included in general and administrative expenses on the Consolidated Statements of Operations.
| Year Ended December 31, | ||||||||||||||
| (Dollars and RSUs in thousands) | 2025 | 2024 | 2023 | |||||||||||
| Restricted Stock Units, beginning of period | 123 | — | — | |||||||||||
Absolute TSR Performance-based RSUs granted (1) | 36 | 57 | — | |||||||||||
Relative TSR Performance-based RSUs granted (1) | 35 | 43 | — | |||||||||||
Time-based RSUs granted (2) | 39 | 34 | — | |||||||||||
| Total RSUs granted | 110 | 134 | — | |||||||||||
Vested RSUs (2) | (28) | (11) | — | |||||||||||
| Restricted Stock Units, end of period | 205 | 123 | — | |||||||||||
| Amortization expense | $ | 1,455 | $ | 1,118 | $ | — | ||||||||
| Grant Date Value Remaining at period end to be Amortized During the Performance Period | $ | 1,826 | $ | 1,453 | $ | — | ||||||||
| Weighted average grant date fair value of: | ||||||||||||||
| Stock-based units, beginning of year | $ | 18.56 | $ | — | $ | — | ||||||||
| Stock-based units granted during the year | $ | 16.59 | $ | 19.24 | $ | — | ||||||||
| Stock-based units vested during the year | $ | 21.32 | $ | 26.62 | $ | — | ||||||||
| Stock-based units, forfeited during the year | $ | — | $ | — | $ | — | ||||||||
| Stock-based units, end of year | $ | 17.12 | $ | 18.56 | $ | — | ||||||||
| Grant date fair value of units granted during the year | $ | 1,827 | $ | 2,570 | $ | — | ||||||||
| ______________ | ||||||||||||||
(1) The number of Performance-based RSUs granted were based on target levels. These RSUs will vest or will be forfeited based on the performance level achieved at the end of the respective -year performance period on June 30, 2026 and June 30, 2028. | ||||||||||||||
(2) The number of time-based RSUs granted were based on target levels and vest ratably on June 30 of each year of the respective -year periods ending June 30, 2026 and 2028, provided the recipient remains continuously employed by the Company on each such date. | ||||||||||||||
(3) Vested shares for the twelve months ended December 31, 2025 included the accelerated vesting of 18 thousand shares upon the termination of our former Executive Vice President, Asset Management. | ||||||||||||||
The Company had nonvested stock unit-based compensation that had not yet been recognized of approximately $1.8 million and $1.5 million at December 31, 2025 and 2024, respectively; there was no unrecognized stock-unit based compensation at December 31, 2023. The restricted stock units granted on July 24, 2025, with a performance/service period beginning July 1, 2025, had remaining vesting periods ranging from 1 year to 3 years. At December 31, 2025,
the weighted-average amortization period remaining of the restricted stock units was approximately 2.2 years. The weighted average amortization period remaining for all unvested grants as of December 31, 2025 was approximately 1.7 years. Compensation expense recognized during the years ended December 31, 2025 and 2024 from the amortization of the value of restricted stock units over the vesting period was approximately $1.5 million and $1.1 million respectively, which is included in general and administrative expenses on the Consolidated Statements of Operations. Amortization expense for the year ended December 30, 2025 includes accelerated amortization totaling $0.2 million related to a termination during the second quarter, discussed in more detail above. There was no amortization expense related to restricted stock units during the year ended December 31, 2023.
401(k) Plan
The Company maintains a 401(k) plan that allows eligible employees to defer salary, subject to certain limitations imposed by the Internal Revenue Code. The Company provides a matching contribution of up to 3.5% of each eligible employee’s salary, subject to certain limitations. The Company’s matching contributions were approximately $0.2 million for each of the years ended December 31, 2025, and 2024, and 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 14, 2023 | |
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.