DANA Inc Stock Compensation Disclosure

Note 11.  Stock Compensation

 

2021 Omnibus Incentive Plan

 

The 2021 Omnibus Incentive Plan (the Plan) authorizes the grant of stock options, stock appreciation rights (SARs), RSUs and performance share units (PSUs) through April 2031. Cash-settled awards do not count against the number of shares available for award under the Plan. At  December 31, 2025, there were 4.9 million shares available for future grants. Shares of common stock to be issued under the Plan are made available from authorized and unissued Dana common stock.

 

Award activity — (shares in millions)

 

		RSUs								PSUs
						Grant-Date								Grant-Date
		Shares				Fair Value*				Shares				Fair Value*
December 31, 2024			3.2			$	12.76				0.8			$	19.53
Granted			1.2				17.20				0.3				18.70
Vested			(2.5	)			12.44				(0.6	)			18.56
Forfeited			(0.2	)			15.05				—				—
December 31, 2025			1.7				16.20				0.5				19.67

* Weighted-average per share

 

		2025				2024				2023
Total stock compensation expense		$	40			$	30			$	26
Total grant-date fair value of awards vested			42				31				33
Cash received from exercise of stock options											3
Cash paid to settle RSUs			4				4				5
Intrinsic value of stock options exercised											1
Intrinsic value of RSUs and PSUs vested			61				21				30

 

During the year ended 2025, the Company amended the PSU awards to accrue dividends, which are subject to the same vesting and forfeiture conditions as the original award. The incremental compensation cost resulting from this modification is not material. The weighted-average fair values presented above, including the beginning-of-year values, reflect the impact of this modification.

 

Compensation expense is generally measured based on the fair value at the date of grant and is recognized on a straight-line basis over the vesting period. For RSUs and PSUs, the fair value is based on the closing market price of our common stock at the date of grant. Awards that are settled in cash are subject to liability accounting. Accordingly, the fair value of such awards is remeasured at the end of each reporting period until settled or expired. We had accrued $2 for cash-settled awards at both  December 31, 2025 and 2024. During 2025 we issued 2.5 million and 0.2 million shares of common stock based on vesting of RSUs and PSUs, respectively. At  December 31, 2025, the total unrecognized compensation cost related to the nonvested awards granted and expected to vest was $22. This cost is expected to be recognized over a weighted-average period of 1.6 years.

 

Stock options and stock appreciation rights — The exercise price of each option or SAR equals the closing market price of our common stock on the date of grant. SARs are settled in cash for the difference between the market price on the date of exercise and the exercise price. We have not granted stock options or SARs since 2013. At  December 31, 2025, there were no outstanding stock options or SARs as they have all been exercised or expired.

 

Restricted stock units and performance shares units — Each RSU or PSU granted represents the right to receive one share of Dana common stock or, at the election of Dana (for units awarded to board members) or for employees located outside the U.S. (for employee awarded units), cash equal to the market value per share. All RSUs contain forfeitable dividend equivalent rights. RSUs granted to non-employee directors vest on the first anniversary date of the grant and those granted to employees pro-rata vest over three years. PSUs granted to employees vest if specified performance goals are achieved during the respective performance period, generally three years.

 

Under the 2025, 2024, and 2023 stock compensation award programs, the number of PSUs that ultimately vest is contingent on achieving specified financial targets and specified total shareholder return targets relative to peer companies. For the portions of the awards based on financial metrics, we estimated the fair value at grant date based on the closing market price of our common stock at the date of grant. The estimated grant date value is accrued over the performance period and adjusted as appropriate based on performance relative to the target. For the portion of the PSU award based on shareholder returns, we estimated the fair value at grant date using various assumptions as part of a Monte Carlo simulation. The expected term represents the period from the grant date to the end of the performance period. The risk-free interest rate was based on U.S. Treasury constant maturity rates at the grant date. The estimated volatility was based on observed historical volatility of daily stock returns for the 3-year period preceding the grant date.

 

		PSUs
		2025				2024
Expect term (in years)			3.0				3.0
Risk-free interest rate			4.23	%			4.39	%
Expected volatility			49.1	%			47.7	%

 

Cash incentive awards — Our 2021 Omnibus Incentive Plan provides for cash incentive awards. We make awards annually to certain eligible employees designated by Dana, including certain executive officers. Awards under the plan are primarily based on achieving certain financial performance goals. The financial performance goals of the plan are established annually by the Board of Directors.

 

Under the 2025 annual incentive program, participants were eligible to receive cash awards based on achieving earnings, net new business and cash flow performance goals. Under the 2024 and 2023 annual incentive programs, participants were eligible to receive cash awards based on achieving earnings, sales and cash flow performance goals. We recognized $72, $49 and $85 of expense in 2025, 2024 and 2023 for the expected cash payments under these programs.