Delek US Holdings, Inc.DK
Delek US Holdings, Inc. Stock Compensation Disclosure
Equity-Based Compensation
Delek US Holdings, Inc. 2006 Long-Term Incentive Plan
The Delek US Holdings, Inc. 2006 Long-Term Incentive Plan, as amended (the "2006 Plan"), allowed Delek to grant stock options, SARs, RSUs, PRSUs, and other stock-based awards of up to 5,053,392 shares of Delek's common stock to certain directors, officers, employees, consultants and other individuals who performed services for Delek or its affiliates. Stock options and SARs granted under the 2006 Plan were generally granted at market price or higher. The vesting of all outstanding awards was subject to continued service to Delek or its affiliates except that vesting of awards granted to certain executive employees could, under certain circumstances, accelerate upon termination of their employment and the vesting of all outstanding awards could accelerate upon the occurrence of an Exchange Transaction (as defined in the 2006 Plan). In the second quarter of 2010, Delek's Board of Directors and its Incentive Plan Committee began using stock-settled SARs, rather than stock options, as the primary form of appreciation award under the 2006 Plan. The 2006 Plan expired in April 2016.
Delek US Holdings, Inc. 2016 Long-Term Incentive Plan
On May 5, 2016, our stockholders approved our 2016 Long-Term Incentive Plan (the “2016 Plan”) to succeed our 2006 Plan. The 2016 Plan allows Delek to grant stock options, SARs, restricted stock, RSUs, performance awards and other stock-based awards of up to 17,010,000 shares of Delek's common stock to certain directors, officers, employees, consultants and other individuals who perform services for Delek or its affiliates. Stock options and SARs issued under the 2016 Plan are granted at prices equal to (or greater than) the fair market value of Delek's common stock on the grant date and are generally subject to a vesting period of one year or more. No awards will be made under the 2016 Plan after May 5, 2026.
Alon USA Energy, Inc. 2005 Long-Term Incentive Plan
In connection with the Delek/Alon Merger, Delek assumed the Alon USA Energy, Inc. Second Amended and Restated 2005 Incentive Compensation Plan (the “Alon 2005 Plan” and, collectively with the 2006 Plan and the 2016 Plan, the "Incentive Plans") as a component of its overall executive incentive compensation program. The Alon 2005 Plan permitted the granting of awards to Alon's officers and key employees in the form of options to purchase common stock, SARs, restricted shares of common stock, RSUs, performance shares, performance units and senior executive plan bonuses. Effective with the Delek/Alon Merger, all contractually unvested share-based awards were converted into share-based awards denominated in Delek common stock. Committed but unissued share-based awards were exchanged and converted into rights to receive share-based awards indexed to Delek common stock. The Alon 2005 Plan was terminated June 4, 2021.
Option and SAR Assumptions
The table below provides the fair value assumptions for our outstanding stock options and SARs under the Incentive Plans. For all awards granted, we calculated volatility using historical and implied volatility of a peer group of public companies using weekly stock prices.
| 2024 Grants | ||||||||
| (Graded Vesting - 2 years) | ||||||||
| Expected volatility | 61.59% | |||||||
| Dividend yield | 3.70% | |||||||
| Expected term | 5.75 years | |||||||
| Risk free rate | 4.03% | |||||||
| Fair value per share | $11.66 | |||||||
Stock Option and SAR Activity
The following table summarizes our Incentive Plans stock option and SAR activity for the years ended December 31, 2025, 2024 and 2023:
| Number of Shares Under Option | Weighted-Average Strike Price | Weighted-Average Contractual Term (in years) | Aggregate Intrinsic Value (in millions) | |||||||||||||||||||||||
| Options and SARs outstanding, December 31, 2022 | 1,527,045 | $ | 35.17 | |||||||||||||||||||||||
| Exercised | (51,200) | $ | 25.06 | |||||||||||||||||||||||
| Forfeited | (259,730) | $ | 37.34 | |||||||||||||||||||||||
| Options and SARs outstanding, December 31, 2023 | 1,216,115 | $ | 35.14 | |||||||||||||||||||||||
| Granted | 230,000 | $ | 26.50 | |||||||||||||||||||||||
| Exercised | (33,150) | $ | 25.81 | |||||||||||||||||||||||
| Forfeited | (172,400) | $ | 38.91 | |||||||||||||||||||||||
| Options and SARs outstanding, December 31, 2024 | 1,240,565 | $ | 33.25 | |||||||||||||||||||||||
| Exercised | (501,275) | $ | 28.62 | |||||||||||||||||||||||
| Forfeited | (209,900) | $ | 37.75 | |||||||||||||||||||||||
| Options and SARs outstanding, December 31, 2025 | 529,390 | $ | 35.86 | 3.6 | $1.0 | |||||||||||||||||||||
| Vested options and SARs exercisable, December 31, 2025 | 414,390 | $ | 38.45 | 2.4 | $0.6 | |||||||||||||||||||||
| Vested options and SARs exercisable, December 31, 2024 | 1,010,565 | $ | 34.79 | 3.1 | $0.1 | |||||||||||||||||||||
Restricted Stock Units
The Incentive Plans provide for the award of RSUs and PRSUs to certain employees and non-employee directors. RSUs granted to employees vest ratably over to five years from the date of grant, and RSUs granted to non-employee directors vest quarterly over the year following the date of grant. The grant date fair value of RSUs is determined based on the closing price of Delek's common stock on the grant date. PRSUs initially granted to employees will typically vest in one to three tranches, the first of which vests on December 31 of the year following the grant date, the second and third on the subsequent December 31. PRSUs subsequently granted to employees will typically vest at the end of a calendar year performance period. The number of PRSUs that will ultimately vest is based on the Company's total shareholder return over the performance period. The grant date fair value of PRSUs for market-based awards is determined using a Monte-Carlo simulation model. We record compensation expense for these awards based on the grant date fair value of the award, recognized ratably over the measurement period.
Performance-Based Restricted Stock Unit Assumptions
The table below provides the assumptions used in estimating the fair values of our outstanding PRSUs under the Incentive Plans. For all awards granted, we calculated volatility using historical volatility and implied volatility of a peer group of public companies using weekly stock prices.
| 2025 Grants | 2024 Grants | 2023 Grants | |||||||||||||||
| Expected volatility | 37.85% - 48.15% | 51.41% | 57.61% - 64.46% | ||||||||||||||
| Expected term | 0.15 - 2.81 years | 2.81 years | 1.81 - 2.81 years | ||||||||||||||
| Risk free rate | 3.66% - 4.10% | 4.25% | 4.32% - 4.60% | ||||||||||||||
| Fair value per share | $26.87 | $35.69 | $24.95 | ||||||||||||||
The following table summarizes the RSU and PRSU activity under the Incentive Plans for the years ended December 31, 2025, 2024 and 2023:
| Number of RSUs and PRSUs | Weighted-Average Grant Date Price | Total Fair Value: In Millions | ||||||||||||||||||
| Balance | December 31, 2022 | 2,621,333 | $ | 26.85 | ||||||||||||||||
| Granted | 1,446,101 | $ | 24.17 | |||||||||||||||||
| Vested | (667,597) | $ | 26.38 | $ | 17.6 | |||||||||||||||
| Forfeited | (539,850) | $ | 27.89 | |||||||||||||||||
| Performance Not Achieved | (350,939) | $ | 10.58 | |||||||||||||||||
| Balance | December 31, 2023 | 2,509,048 | $ | 27.48 | ||||||||||||||||
| Granted | 1,224,602 | $ | 26.47 | |||||||||||||||||
| Vested | (836,331) | $ | 25.27 | $ | 21.1 | |||||||||||||||
| Forfeited | (303,865) | $ | 25.98 | |||||||||||||||||
| Performance Not Achieved | (251,696) | $ | 34.56 | |||||||||||||||||
| Balance | December 31, 2024 | 2,341,758 | $ | 27.17 | ||||||||||||||||
Granted (1) | 1,967,079 | $ | 21.58 | |||||||||||||||||
| Vested | (1,205,864) | $ | 24.86 | $ | 30.0 | |||||||||||||||
| Forfeited | (393,939) | $ | 23.66 | |||||||||||||||||
| Performance Not Achieved | (139,535) | $ | 34.70 | |||||||||||||||||
| Balance | December 31, 2025 | 2,569,499 | $ | 24.11 | ||||||||||||||||
(1) Includes awards granted related to certain restructuring plans previously recorded as a liability. These awards were reclassified as equity in the fourth quarter of 2025. Refer to Note 20 Restructuring and Other Charges for further information.
Compensation Expense Related to Equity-based Awards Granted Under the Incentive Plans
Compensation expense for Delek equity-based awards amounted to $79.0 million, $27.8 million and $23.9 million for the years ended December 31, 2025, 2024 and 2023, respectively, and are included in general and administrative expenses and operating expenses in the accompanying consolidated statements of income. These amounts exclude amounts related to discontinued operations of $1.6 million and $0.2 million for the years ended December 31, 2024 and 2023, respectively. We recognized income tax (benefit) expense for equity-based awards of $(2.0) million, $(3.1) million and $(2.0) million for the years ended December 31, 2025, 2024 and 2023, respectively.
As of December 31, 2025, there was $27.3 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.3 years.
The aggregate intrinsic value, which represents the difference between the underlying stock's market price and the award's exercise price, of the share-based awards exercised or vested during the years ended December 31, 2025, 2024 and 2023 was $34.7 million, $20.1 million and $16.3 million, respectively. During the years December 31, 2025, 2024 and 2023, respectively, we issued net shares of common stock of 902,384, 589,300 and 450,123 as a result of exercised or vested equity-based awards. These amounts are net of 735,557, 256,865 and 223,645 shares, respectively, withheld to satisfy employee tax obligations related to the exercises and vesting for the years ended December 31, 2025, 2024 and 2023. Delek paid approximately $9.6 million, $5.5 million and $4.5 million, respectively, of taxes in connection with the settlement of these awards for the years ended December 31, 2025, 2024 and 2023. We issue new shares of common stock upon exercise or vesting of share-based awards.
Delek Logistics GP, LLC 2012 Long-Term Incentive Plan
Logistics GP maintains a unit-based compensation plan for officers, directors and employees of Logistics GP or its affiliates and certain consultants, affiliates of Logistics GP or other individuals who perform services for Delek Logistics. The Delek Logistics GP, LLC 2012 Long-Term Incentive Plan ("Logistics LTIP") permits the grant of unit options, restricted units, phantom units, unit appreciation rights, distribution equivalent rights, other unit-based awards, and unit awards. Awards granted under the Logistics LTIP will be settled with Delek Logistics units. The Logistics GP board of directors has authorized for issuance under the Logistics LTIP of up to 912,207 common units representing limited partner interests in Delek Logistics. The term of the Logistics LTIP was also extended to June 9, 2031. Equity-based compensation expense is included in general and administrative expenses in the accompanying consolidated statements of income and is immaterial for the years ended December 31, 2025, 2024 and 2023.
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.