DIAMOND HILL INVESTMENT GROUP INC Stock Compensation Disclosure

Note 7 Compensation Plans

Share-Based Payment Transactions

The Company maintains the shareholder-approved Diamond Hill Investment Group, Inc. 2025 Equity and Cash Incentive Plan (the “2025 Plan”) which authorizes the issuance of up to 225,000 DHIL common shares in various forms of equity awards. As of December 31, 2025, there were 162,151 DHIL common shares available for grants under the 2025 Plan. Previously, the Company issued equity awards under the Diamond Hill Investment Group, Inc. 2022 Equity and Cash Incentive Plan (the “2022 Plan”) and the Diamond Hill Investment Group, Inc. 2014 Equity and Cash Incentive Plan (the “2014 Plan”). There are no longer any DHIL common shares available for issuance under the 2022 and 2014 Plans, although certain grants previously made under the 2022 and 2014 Plans remain issued and outstanding.

Restricted share grants represent DHIL common shares issued and outstanding upon grant that remain subject to restrictions until specified vesting conditions are satisfied. The Company issues to all new Company employees upon hire restricted shares, and may issue additional restricted shares to certain key employees from time to time, that cliff vest after five years. In the first quarter of each year, the Company also issues to certain key employees restricted shares that vest ratably on an annual basis over three years.

Restricted share awards provide for accelerated vesting upon a change in control of the Company, as defined in the applicable award agreements. No change in control had occurred as of December 31, 2025, and accordingly, no accelerated vesting or incremental share-based compensation cost was recognized in the accompanying consolidated financial statements for the year ended December 31, 2025.

Restricted shares are valued based upon the fair market value of the common shares on the applicable grant date. The restricted shares are recorded as deferred compensation in the equity section of the balance sheet on the grant date and then recognized as compensation expense on a straight-line basis over the vesting period of the respective grant. The Company accounts for forfeitures as they occur and does not estimate forfeitures at the grant date.

Holders of unvested restricted shares are entitled to receive cash dividends, if and when declared, on the same basis as holders of vested common shares. Such dividend rights are nonforfeitable and are recognized as compensation expense when paid.

Compensation and related costs, excluding deferred compensation expense (benefit) includes expenses related to restricted shares of $13.3 million, $11.8 million, and $11.6 million, for the years ended December 31, 2025, 2024, and 2023, respectively.

The weighted-average grant date price per share of restricted shares issued during the years ended December 31, 2024 and 2023 was $154.27 and $186.85, respectively. The total fair value of restricted shares vested, as of their respective vesting dates, during the years ended December 31, 2025, 2024, and 2023 was $11.7 million, $15.3 million, and $13.8 million, respectively. As of December 31, 2025, the weighted-average remaining vesting period of unvested restricted shares was approximately 1.6 years.

Total deferred equity compensation related to unvested restricted shares was $29.2 million as of December 31, 2025. The recognition of compensation expense related to deferred compensation over the remaining vesting periods is as follows:

Employee Stock Purchase Plan

Under the ESPP, eligible employees may purchase DHIL common shares at 85% of the fair market value on the last day of each offering period. Each offering period is approximately three months, which coincides with the Company’s fiscal quarters. During the year ended December 31, 2025, ESPP participants purchased 2,161 DHIL common shares for $0.3 million and the Company recorded $0.1 million of share-based payment expense related to these purchases. During the year ended December 31, 2024, ESPP participants purchased 2,501 DHIL common shares for $0.3 million and the Company recorded $0.1 million of share-based payment expense related to these purchases. During the year ended December 31, 2023, ESPP participants purchased 2,904 DHIL common shares for $0.4 million and the Company recorded $0.1 million of share-based payment expense related to these purchases. The fair value of shares purchased under the ESPP is measured on the grant date, as the plan includes no lookback or option features, and is equal to the 15% discount from the fair market value of the Company’s common shares on that date.

As of December 31, 2025, 84,764 DHIL common shares were reserved for future issuance through the ESPP.

401(k) Plan

The Company sponsors a 401(k) plan in which all Company employees are eligible to participate. Company employees may contribute a portion of their compensation subject to certain limits based on federal tax laws. The Company matches employee contributions equal to 250.0% of the first 6.0% of an employee’s compensation contributed to the plan. The Company may settle the 401(k) plan matching contributions in cash or DHIL common shares. After June 1, 2023, the Company made all matching contributions in cash. Employees vest ratably in the matching contributions over a five year period. The following table summarizes the Company’s expenses attributable to the 401(k) plan during the years ended December 31, 2025, 2024, and 2023:

Deferred Compensation Plans

Under the Deferred Compensation Plans, participants may elect to voluntarily defer, for a minimum of five years (subject to an earlier distribution in the case of the participant’s death or disability or a change in control of DHIL), certain incentive compensation that the Company may contribute into the Deferred Compensation Plans. Participants are responsible for designating investment options for the assets they contribute, and the distribution paid to each participant reflects any gains or losses on the assets realized in connection with the Deferred Compensation Plans. Assets held in the Deferred Compensation Plans are included in the Company’s investment portfolio, and the associated obligation to participants is included in deferred compensation liability. Deferred compensation liabilities are recorded at amounts due to participants, which reflect the fair value of underlying investment elections, with changes recognized in compensation expense.

Deferred compensation liability was $42.5 million and $39.1 million as of December 31, 2025 and 2024, respectively.