HF Sinclair CorpDINO
HF Sinclair Corp Stock Compensation Disclosure
Stock-Based Compensation
We have a principal share-based compensation plan, the HF Sinclair Corporation Amended and Restated 2020 Long Term Incentive Plan (the “2020 Plan”). The 2020 Plan provides for the grant of unrestricted and restricted stock, restricted stock units, other stock-based awards, stock options, performance awards, substitute awards, cash awards and stock appreciation rights. An aggregate of 6,368,930 of these awards may be issued pursuant to awards granted under the 2020 Plan. We also have a stock compensation deferral plan that allows non-employee directors to defer settlement of vested stock granted under our share-based compensation plan. Our accounting policy for the recognition of compensation expense for awards with pro-rata vesting is to expense the costs ratably over the vesting periods. Share-based awards paid in cash upon vesting are accounted for as liability awards and recorded at fair value at the end of each reporting period with a mark-to-mark adjustment recognized in earnings.
The stock-based compensation expense and associated tax benefit were as follows:
| Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Compensation expense: | ||||||||||||||||||||
| Restricted stock units | $ | 22 | $ | 18 | $ | 30 | ||||||||||||||
| Performance stock units | 12 | 4 | 12 | |||||||||||||||||
| Total compensation expense | $ | 34 | $ | 22 | $ | 42 | ||||||||||||||
| Tax benefit recognized on compensation expense | $ | 8 | $ | 5 | $ | 10 | ||||||||||||||
Restricted Stock Units
Under the 2020 Plan, we grant certain officers and other key employees restricted stock unit awards, which are payable in stock or cash and generally vest over a period of three years. Restricted stock unit award recipients have the right to receive dividends; however, restricted stock units do not have any other rights of absolute ownership. Upon vesting, restrictions on the restricted stock units lapse at which time they convert to common shares or cash. In addition, we grant non-employee directors restricted stock unit awards, which typically vest over a period of one year and are payable in stock. The fair value of each restricted stock unit award is measured based on the grant date market price of our common shares and is amortized over the respective vesting period. We account for forfeitures on an estimated basis.
A summary of restricted stock units activity during the year ended December 31, 2025 is presented below:
| Restricted Stock Units | Grants | Weighted-Average Grant Date Fair Value | ||||||||||||
Outstanding at January 1, 2025 | 951,690 | $ | 54.23 | |||||||||||
| Granted | 460,866 | $ | 54.84 | |||||||||||
| Vested | (396,474) | $ | 39.03 | |||||||||||
| Forfeited | (38,582) | $ | 48.40 | |||||||||||
Outstanding at December 31, 2025 | 977,500 | $ | 60.91 | |||||||||||
As of December 31, 2025, there was $31 million of total unrecognized compensation cost related to unvested restricted stock unit grants. That cost is expected to be recognized over a weighted-average period of 1.5 years.
The following table reflects activity related to our restricted stock units:
| Years Ended December 31, | ||||||||||||||||||||
| Restricted Stock Unit Activity | 2025 | 2024 | 2023 | |||||||||||||||||
| Grant date fair value of vested units (in millions) | $ | 15 | $ | 16 | $ | 21 | ||||||||||||||
Weighted-average grant date fair value per granted unit | $ | 54.84 | $ | 42.36 | $ | 52.59 | ||||||||||||||
| Cash paid for settlement of awards on vesting date (in millions) | $ | 1 | $ | 1 | $ | 4 | ||||||||||||||
Restricted stock units settled in cash | 22,607 | 24,065 | 71,589 | |||||||||||||||||
Performance Share Units
Under the 2020 Plan, we grant certain officers and other key employees performance share units, which are payable in stock or cash upon meeting certain criteria over the service period, and generally vest at the end of a three year period. Under the terms of our performance share unit grants, awards are subject to “financial performance” and “market performance” criteria. Financial performance is based on our financial performance compared to a peer group of independent refining companies, while market performance is based on the relative standing of total stockholder return achieved by HF Sinclair compared to peer group companies. The number of shares ultimately issued or cash paid under these awards can range from zero to 200% of target award amounts. Holders of performance share units have the right to receive dividend equivalents and other distributions with respect to such performance share units based on the target level of payout. Awards subject to financial performance are amortized over the vesting period and are reevaluated periodically based on the probability of achievement of the performance conditions. The grant date fair value of awards subject to market performance are estimated based on a Monte Carlo simulation model and are amortized over the vesting period.
A summary of performance share units activity during the year ended December 31, 2025 is presented below:
| Performance Share Units | Grants | Weighted Average Grant Date Fair Value | ||||||||||||
Outstanding at January 1, 2025 | 622,427 | $ | 59.60 | |||||||||||
| Granted | 258,235 | $ | 59.90 | |||||||||||
| Vested | (125,146) | $ | 73.27 | |||||||||||
| Outstanding at December 31, 2025 | 755,516 | $ | 57.44 | |||||||||||
As of December 31, 2025, there was $24 million of total unrecognized compensation cost related to non-vested performance share units. That cost is expected to be recognized over a weighted-average period of 2.0 years.
The following table reflects activity related to our performance share units:
| Years Ended December 31, | ||||||||||||||||||||
| Performance Share Units Activity | 2025 | 2024 | 2023 | |||||||||||||||||
| Grant date fair value of vested units (in millions) | $ | 9 | $ | 3 | $ | 7 | ||||||||||||||
Weighted-average grant date fair value per granted unit | $ | 59.90 | $ | 49.90 | $ | 67.73 | ||||||||||||||
| Cash paid for settlement of awards on vesting date (in millions) | $ | — | $ | — | $ | 1 | ||||||||||||||
Performance stock units settled in cash | — | 2,724 | 23,587 | |||||||||||||||||
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.