Note 7—Stock-Based Compensation
The 2019 Incentive Plan authorizes the issuance of up to 15,885,000 RSUs. The number of RSUs that may be granted under this Plan is subject to adjustments for changes in capital structure. The Company issues new shares of common stock upon vesting and settlement of RSUs. Shares for vested RSUs are generally delivered to participants annually, net of shares withheld for taxes.
Summary of Restricted Stock Unit Activity
At the end of 2025, 6,275,000 shares were available to be granted as RSUs, and the following awards were outstanding:
•2,187,000 time-based RSUs, which vest upon continued employment or service over specified periods of time; and
•121,000 performance-based RSUs, of which 70,000 were granted to executive officers subject to the determination of the attainment of performance targets for 2025, which occurred in September 2025. At that time, a portion vested as a result of executive officers who met accelerated vesting provisions. The remaining awards vest upon continued employment over specified periods of time. Please refer to Note 1 for accelerated vesting requirements. The following table summarizes RSU transactions during 2025:
| | | | | | | | | | | |
| Number of
Units
(in 000’s) | | Weighted-Average
Grant Date Fair
Value |
| Outstanding at the end of 2024 | 2,799 | | | $ | 463.24 | |
| Granted | 1,095 | | | 883.46 | |
| Vested and delivered | (1,494) | | | 558.05 | |
| Forfeited | (92) | | | 567.87 | |
| | | |
| Outstanding at the end of 2025 | 2,308 | | | $ | 597.00 | |
The weighted-average grant date fair value of RSUs granted was $883.46, $547.26, and $471.47 in 2025, 2024, and 2023. The remaining unrecognized compensation cost related to non-vested RSUs at the end of 2025 was $897 and the weighted-average period of time over which this cost will be recognized is 1.6 years. Included in the outstanding balance at the end of 2025 were approximately 766,000 RSUs vested but not yet delivered.
Summary of Stock-Based Compensation
The following table summarizes stock-based compensation expense and the related tax benefits:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Stock-based compensation expense | $ | 860 | | | $ | 818 | | | $ | 774 | |
Less recognized income tax benefit | 183 | | | 173 | | | 163 | |
| Stock-based compensation expense, net | $ | 677 | | | $ | 645 | | | $ | 611 | |
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.