CORPAY, INC.CPAY
CORPAY, INC. Stock Compensation Disclosure
Stock-Based Compensation
The Company accounts for stock-based compensation pursuant to relevant authoritative guidance, which requires measurement
of compensation cost for all stock awards at fair value on the date of grant and recognition of compensation, net of forfeitures,
over the requisite service period for awards expected to vest.
The Company has a Stock Incentive Plan (the "Plan"), pursuant to which the Company's Board is permitted to grant equity to
employees and directors. Under the Plan, a maximum of 20.65 million shares of the Company's common stock is approved to
be issued for grants of restricted stock and stock options.
The table below summarizes the expense recognized within general and administrative expenses in the Consolidated Statements
of Income related to stock-based compensation for the years ended December 31 (in thousands):
2025 | 2024 | 2023 | ||||
Stock options | $30,959 | $30,822 | $24,342 | |||
Restricted stock | 71,678 | 85,902 | 91,744 | |||
Stock-based compensation | $102,637 | $116,724 | $116,086 |
The tax benefits related to stock-based compensation, inclusive of the tax benefits upon the exercises of options and vesting of
restricted stock were $38.1 million, $60.7 million and $22.1 million for the years ended December 31, 2025, 2024 and 2023,
respectively.
The following table summarizes the Company’s total unrecognized compensation cost related to outstanding stock awards as of
December 31, 2025 (cost in thousands):
Unrecognized Compensation Cost | Weighted Average Period of Expense Recognition Remaining (in Years) | |||
Stock options | $50,354 | 1.65 | ||
Restricted stock | 36,877 | 0.58 | ||
Total | $87,231 |
Stock Options
The following summarizes the changes in the number of shares of stock options outstanding for the following periods (shares
and aggregate intrinsic value in thousands):
Shares | Weighted Average Exercise Price | Options Exercisable at End of Year | Weighted Average Exercise Price of Exercisable Options | Weighted Average Fair Value of Options Granted During the Year | Aggregate Intrinsic Value | |||||||
Outstanding at December 31, 2022 | 5,301 | $188.12 | 3,512 | $159.46 | $113,681 | |||||||
Granted | 411 | 222.51 | $66.28 | |||||||||
Exercised | (648) | 172.01 | 40,983 | |||||||||
Forfeited | (81) | 241.78 | ||||||||||
Outstanding at December 31, 2023 | 4,983 | 192.18 | 3,182 | 163.54 | 451,039 | |||||||
Granted | 169 | 285.11 | $97.38 | |||||||||
Exercised | (2,271) | 188.61 | 324,577 | |||||||||
Forfeited | (397) | 253.49 | ||||||||||
Outstanding at December 31, 2024 | 2,484 | 191.97 | 1,760 | 171.95 | 364,092 | |||||||
Granted | 598 | 325.28 | $84.88 | |||||||||
Exercised | (432) | 155.69 | 86,899 | |||||||||
Forfeited | (57) | 240.35 | ||||||||||
Outstanding at December 31, 2025 | 2,593 | $227.70 | 1,551 | $185.93 | $206,036 | |||||||
Expected to vest at December 31, 2025 | 1,042 | $289.87 |
The following table summarizes information about stock options outstanding at December 31, 2025 (shares in thousands):
Exercise Price | Options Outstanding | Weighted Average Remaining Vesting Life in Years | Options Exercisable | |||
$133.40 – $150.74 | 895 | 0.00 | 895 | |||
$165.96 – $225.45 | 518 | 0.08 | 381 | |||
$231.70 – $261.07 | 426 | 0.58 | 205 | |||
$272.38 – $319.61 | 462 | 1.67 | 68 | |||
$328.16 – $377.31 | 292 | 1.84 | 2 | |||
2,593 | 1,551 |
The aggregate intrinsic value of stock options exercisable at December 31, 2025 was $178.4 million. The weighted average
remaining contractual term of options exercisable at December 31, 2025 was 2.8 years.
The fair value of stock option awards granted was estimated using the Black-Scholes option pricing model with the following
weighted-average assumptions for grants or modifications during the years ended December 31 as follows:
2025 | 2024 | 2023 | ||||
Risk-free interest rate | 3.90% | 4.28% | 4.39% | |||
Dividend yield | — | — | — | |||
Expected volatility | 30.64% | 35.68% | 33.73% | |||
Expected term (in years) | 3.1 | 3.8 | 3.4 |
The weighted-average remaining contractual term for options outstanding was 5.1 years at December 31, 2025.
On September 30, 2021, the Company granted 850,000 performance stock options to an officer of the Company ("Performance
Option Grant"), which are exercisable upon the achievement of certain time-based vesting and market conditions. On October
23, 2024, the Company modified the Performance Option Grant and recorded approximately $10.3 million in incremental
stock-based compensation expense.
On October 25, 2021, the Company granted 30,000 performance stock options to an officer of the Company, which are
exercisable upon the achievement of certain performance metrics and time-based vesting. On June 18, 2025, the Company
modified the grant and recorded approximately $1.1 million in incremental stock-based compensation expense.
Restricted Stock
The following table summarizes the changes in the number of shares of restricted stock awards and restricted stock units
outstanding for the following periods (shares in thousands):
Shares | Weighted Average Grant Date Fair Value | |||
Outstanding at December 31, 2022 | 435 | $237.68 | ||
Granted | 441 | 213.36 | ||
Cancelled | (24) | 230.11 | ||
Issued | (310) | 235.25 | ||
Outstanding at December 31, 2023 | 542 | 219.61 | ||
Granted | 367 | 277.87 | ||
Cancelled | (55) | 229.11 | ||
Issued | (394) | 225.22 | ||
Outstanding at December 31, 2024 | 460 | 260.23 | ||
Granted | 260 | 320.15 | ||
Cancelled | (60) | 277.13 | ||
Issued | (317) | 258.03 | ||
Outstanding at December 31, 2025 | 343 | $304.83 |
The total fair value of restricted stock awards and restricted stock units vested was $112.5 million, $112.3 million and $66.6
million for the years ended December 31, 2025, 2024 and 2023, respectively.
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.