Dauch CorpDCH
Dauch Corp Stock Compensation Disclosure
9. STOCK-BASED COMPENSATION AND OTHER INCENTIVE COMPENSATION
STOCK-BASED COMPENSATION
At December 31, 2025, we had stock-based awards outstanding under stock compensation plans approved by our stockholders. Under these plans, shares have been authorized for issuance to our directors, officers and certain other associates in the form of unvested restricted stock units, performance shares or other awards that are based on the value of our common stock. Shares available for future grants at December 31, 2025 were 6.0 million. The current stock plan will expire in May 2028.
RESTRICTED STOCK UNITS We have awarded restricted stock units (RSUs). Compensation expense associated with RSUs is recorded to paid-in-capital ratably over the three-year vesting period.
The following table summarizes activity relating to our RSUs:
| Weighted-Average | |||||||||||
| Number of | Grant Date Fair | ||||||||||
| Shares/Units | Value per Share/Unit | ||||||||||
| (in millions, except per share data) | |||||||||||
| Outstanding at January 1, 2023 | 4.9 | $ | 7.66 | ||||||||
| Granted | 1.3 | 8.36 | |||||||||
| Vested | (2.6) | 5.62 | |||||||||
| Canceled | (0.2) | 9.53 | |||||||||
| Outstanding at December 31, 2023 | 3.4 | $ | 9.34 | ||||||||
| Granted | 1.6 | 6.83 | |||||||||
| Vested | (0.5) | 10.15 | |||||||||
| Canceled | (0.1) | 8.29 | |||||||||
| Outstanding at December 31, 2024 | 4.4 | $ | 8.38 | ||||||||
| Granted | 2.3 | 4.60 | |||||||||
| Vested | (1.3) | 9.43 | |||||||||
| Canceled | (0.4) | 6.14 | |||||||||
| Outstanding at December 31, 2025 | 5.0 | $ | 6.56 | ||||||||
As of December 31, 2025, unrecognized compensation cost related to unvested RSUs totaled $10.2 million. The weighted-average period over which this cost is expected to be recognized is approximately two years. In 2025 and 2024, the total fair market value of RSUs vested was $6.0 million and $3.6 million, respectively.
PERFORMANCE SHARES As of December 31, 2025, we have performance shares (PS) outstanding under our 2018 Amended and Restated Omnibus Incentive Plan. We grant performance shares payable in stock to officers and certain other associates which vest over a three-year performance period.
In 2025, 2024 and 2023, grants to officers were based on the Company's free cash flow in each of the three years of the performance period, as well as the cumulative free cash flow over the same period, adjusted based on a total shareholder return (TSR) measure. The TSR metric compares our TSR over the three-year performance period relative to the TSR of our pre-defined competitor peer group. Additionally, during 2025, 2024 and 2023 grants to certain other associates were based on the Company's three-year cumulative free cash flow. Based on these free cash flow and relative TSR performance metrics, the number of performance shares that become exercisable for officers will be between 0% and 230% of the grant date amount and for other associates between 0% and 150% of the grant date amount. Share price appreciation and dividends paid are measured over the performance period to determine TSR. As these awards are settled in stock, the compensation expense is recorded ratably over the vesting period to paid-in-capital.
The following table summarizes activity relating to our performance shares:
| Weighted-Average | |||||||||||
| Number of | Grant Date Fair | ||||||||||
| Shares | Value per Share | ||||||||||
| Free Cash Flow Awards | (in millions, except per share data) | ||||||||||
| Outstanding at January 1, 2023 | 1.6 | $ | 7.81 | ||||||||
| Granted | 0.6 | 9.19 | |||||||||
| Vested | (0.9) | 5.93 | |||||||||
| Canceled | (0.1) | 10.20 | |||||||||
| Outstanding at December 31, 2023 | 1.2 | $ | 9.80 | ||||||||
| Granted | 0.8 | 7.01 | |||||||||
| Vested | (0.2) | 11.15 | |||||||||
| Canceled | — | 8.11 | |||||||||
| Outstanding at December 31, 2024 | 1.8 | $ | 8.34 | ||||||||
| Granted | 1.2 | 4.87 | |||||||||
| Vested | (0.4) | 9.74 | |||||||||
| Canceled | (0.2) | 6.81 | |||||||||
| Outstanding at December 31, 2025 | 2.4 | $ | 6.51 | ||||||||
We estimate the fair value of our free cash flow performance shares on the date of grant using our estimated three-year cumulative free cash flow, based on the Company's budget and long-range plan assumptions at the time, and adjust quarterly as necessary. We estimate the fair value of our TSR metric on the date of grant using the Monte Carlo simulation approach. The Monte Carlo simulation approach utilizes inputs on volatility assumptions, risk free rates, the price of the Company’s and our competitor peer group's common stock and their correlation as of each valuation date. Volatility assumptions are based on historical and implied volatility measurements.
Based on the current fair value, the estimated unrecognized compensation cost related to unvested PS totaled $5.7 million, as of December 31, 2025. The weighted-average period over which this cost is expected to be recognized is approximately two years.
OTHER INCENTIVE COMPENSATION
LONG-TERM CASH AWARDS As of December 31, 2025, we have long-term cash awards (LTCAs) outstanding under our 2018 Amended and Restated Omnibus Incentive Plan. The $5.4 million, $5.7 million and $5.2 million of LTCAs granted during 2025, 2024 and 2023 respectively, are payable in cash to certain associates which vest over a three-year period. Compensation expense associated with LTCAs paid in cash is recorded ratably over the three-year vesting period. As of December 31, 2025, unrecognized compensation cost related to unvested LTCAs totaled $5.8 million. The weighted-average period over which this cost is expected to be recognized is approximately two years.
PERFORMANCE UNITS As of December 31, 2025, we have performance units (PUs) outstanding under our 2018 Amended and Restated Omnibus Incentive Plan. We grant PUs payable in cash to officers and certain other associates which vest over a three-year performance period and are based primarily on the Company's three-year cumulative free cash flow. The $13.4 million, $13.6 million and $12.8 million of PUs granted during 2025, 2024 and 2023, respectively, are payable for officers between 0% and 230% of the grant date amount, inclusive of the potential impact of the TSR metric, and for other associates between 0% and 150% of the grant date amount, using our cumulative free cash flow performance metric. Based on the current fair value, the estimated unrecognized compensation cost related to unvested PUs totaled $13.2 million, as of December 31, 2025. The weighted-average period over which this cost is expected to be recognized is approximately two years.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2018 | Feb 15, 2019 | |
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.