Cushman & Wakefield Ltd.CWK
Cushman & Wakefield Ltd. Stock Compensation Disclosure
Note 13: Stock-Based Compensation
The Company issues individual grants of share-based compensation awards, subject to board approval, for purposes of recruiting and as part of its overall compensation strategy. During the periods presented, the Company granted Restricted Stock Units (“RSUs”) under the 2018 Omnibus Plans, which are further described below.
Restricted Stock Units
Time-Based and Performance-Based RSUs
The Company may award certain individuals with RSUs. Time-based RSUs (“TBRSUs”) contain only a service condition, and the related compensation cost is recognized over the requisite service period of typically three years using the straight-line vesting method. The Company has determined the fair value of TBRSUs as the fair value of common share on the grant date.
In the first quarter of 2025, 2024 and 2023, the Company granted 2.8 million, 2.7 million and 2.7 million TBRSUs, respectively, to a select group of management and employees. Throughout the remainder of 2025, 2024 and 2023, an additional 0.3 million, 0.3 million and 0.5 million TBRSUs, respectively, were granted. The compensation cost for these grants will be recognized over a requisite service period of 3 years.
As of December 31, 2025, the Company does not have any material outstanding share awards that are liability classified.
Performance-based RSUs (“PBRSUs”) contain certain performance and market conditions, as defined in the award agreements, as well as a service condition, and vest upon the satisfaction of such service condition and achievement of performance targets during the defined performance periods.
In 2025, 2024 and 2023, the Company granted 0.6 million, 1.9 million and 0.5 million PBRSUs, respectively, to a select group of management.
The 2025 PBRSU awards are comprised of three one-year performance periods (referred to herein as 2025 PBRSU Tranche A, 2025 PBRSU Tranche B and 2025 PBRSU Tranche C). Under U.S. GAAP, awards are not considered granted until performance conditions are established. In 2025, performance conditions were only established for 2025 PBRSU Tranche A. The performance conditions for 2025 PBRSU Tranche B and 2025 PBRSU Tranche C have not yet been established and, as a result, these tranches are not considered granted under U.S. GAAP until the respective performance conditions are established.
The 2023 PBRSU awards are comprised of three one-year performance periods (referred to herein as 2023 PBRSU Tranche A, 2023 PBRSU Tranche B and 2023 PBRSU Tranche C). In 2023, performance conditions were only established for 2023 PBRSU Tranche A. In 2024, performance conditions were established for 2023 PBRSU Tranche B. In 2025, performance conditions were established for 2023 PBRSU Tranche C.
Of the PBRSU grants in 2025, 0.3 million related to 2025 awards, and the remaining 0.3 million related to the 2023 PBRSU Tranche C awards, for which performance conditions were set in 2025. Of the PBRSU grants in 2024, 1.6 million related to 2024 awards, and the remaining 0.3 million related to the 2023 PBRSU Tranche B awards, for which performance conditions were set in 2024.
Of the 2025 PBRSU awards, 100% vest based upon the satisfaction of certain Adjusted EPS goals, with a relative Total Shareholder Return (“TSR”) modifier. Of the 2024 PBRSU awards, for select executive members, 25% vest based upon the satisfaction of certain Strategic Cost Efficiency (“SCE”) goals and 75% vest based upon the satisfaction of certain Strategic Cash Generation (“SCG”) goals. For the rest of the 2024 award recipients, 50% vest based upon the satisfaction of certain SCE goals and 50% vest based upon the satisfaction of certain SCG goals. Of the 2023 PBRSU awards, 50% vest based upon the satisfaction of certain SCE goals and 50% vest based upon the satisfaction of certain Adjusted Free Cash Flow goals, both with a relative TSR modifier.
As the 2025 and 2023 PBRSUs contain both performance conditions and market conditions (due to the relative TSR modifier), the fair value at grant date of these awards was determined using a Monte Carlo simulation model, which used the following assumptions:
2025 PBRSU Tranche A (Q3 2025 grant) | 2025 PBRSU Tranche A (Q1 2025 grant) | 2023 PBRSU Tranche C (Q1 2025 grant) | 2023 PBRSU Tranche B (Q1 2024 grant) | 2023 PBRSU Tranche A (Q3 2023 grant) | 2023 PBRSU Tranche A (Q1 2023 grant) | |||||||||||||||
Stock price (1) | $ | 13.39 | $ | 11.90 | $ | 11.90 | $ | 10.01 | $ | 8.18 | $ | 13.38 | ||||||||
Period (2) | 2.4 years | 2.8 years | 0.8 years | 1.9 years | 2.5 years | 2.9 years | ||||||||||||||
Risk-free interest rate (3) | 3.7 | % | 4.0 | % | 4.1 | % | 4.6 | % | 4.6 | % | 4.4 | % | ||||||||
Historical volatility rate (4) | 44.8 | % | 44.2 | % | 39.5 | % | 46.9 | % | 39.9 | % | 44.4 | % | ||||||||
Dividend yield (5) | — | % | — | % | — | % | — | % | — | % | — | % | ||||||||
Fair value at grant date | $ | 15.35 | $ | 12.76 | $ | 12.18 | $ | 10.35 | $ | 8.25 | $ | 14.64 | ||||||||
(1) The stock price is the closing price of the Company’s common shares on the grant date.
(2) The period for volatility for the Company and the peer group (Russell 2000) is based on the time between the valuation date and the end of the performance period.
(3) The risk-free interest rate used is based on zero-coupon risk-free rates over the time from the valuation date to the end of the performance period, based on interpolation.
(4) The weighted average of the daily historical stock price volatility of the Company over the time from the valuation to the end of the performance period is used to determine volatility.
(5) The dividend yield is 0% as the Company has not paid any dividends nor does it currently intend to pay dividends for the foreseeable future.
The Company considered achievement of the performance and market conditions for the 2025 and 2023 awards to be probable and therefore began recognizing expense for these awards as of the respective grant dates.
As the 2024 PBRSUs contain only performance conditions, the fair value of these awards was equal to the closing price of the Company’s common shares on the grant date. The Company considered the achievement of the SCE and SCG performance conditions to be probable and therefore began recognizing expense for such awards as of the grant date. The fair value of the PBRSUs granted during the year ended December 31, 2024 ranged from $10.01 to $10.35.
The following table summarizes the Company’s outstanding RSUs (in millions, except for per share amounts):
| Time-Based RSUs | Performance-Based RSUs | |||||||||||||
| Number of RSUs | Weighted Average Fair Value per Share | Number of RSUs | Weighted Average Fair Value per Share | |||||||||||
| Unvested as of December 31, 2022 | 4.0 | $ | 18.81 | 2.3 | $ | 19.04 | ||||||||
| Granted | 3.2 | 12.66 | 0.5 | 13.85 | ||||||||||
| Vested | (1.8) | 17.97 | (0.2) | 14.84 | ||||||||||
| Forfeited | (0.5) | 18.70 | (1.0) | 16.74 | ||||||||||
| Unvested as of December 31, 2023 | 4.9 | $ | 15.18 | 1.6 | $ | 19.22 | ||||||||
| Granted | 3.0 | 10.28 | 1.9 | 10.07 | ||||||||||
| Vested | (2.3) | 15.50 | (0.4) | 16.24 | ||||||||||
| Forfeited | (0.4) | 15.02 | — | — | ||||||||||
| Unvested as of December 31, 2024 | 5.2 | $ | 11.88 | 3.1 | $ | 12.61 | ||||||||
| Granted | 3.1 | 11.84 | 0.6 | 12.46 | ||||||||||
| Vested | (2.4) | 12.95 | (0.3) | 18.93 | ||||||||||
| Forfeited | (0.4) | 11.44 | (0.3) | 19.76 | ||||||||||
| Unvested as of December 31, 2025 | 5.5 | $ | 11.43 | 3.1 | $ | 11.01 | ||||||||
The following table summarizes the Company’s compensation expense related to RSUs (in millions):
| Year Ended December 31, | Unrecognized at December 31, 2025 | |||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||
| Time-Based RSUs | $ | 30.2 | $ | 26.4 | $ | 40.0 | $ | 36.9 | ||||||
| Performance-Based RSUs | 27.5 | 9.0 | 13.6 | 13.9 | ||||||||||
| Total RSU stock-based compensation cost | $ | 57.7 | $ | 35.4 | $ | 53.6 | $ | 50.8 | ||||||
The total unrecognized compensation cost related to non-vested RSU awards is expected to be recognized over a weighted average period of approximately 1.7 years.
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.