DELUXE CORPDLX
DELUXE CORP Stock Compensation Disclosure
Our employee share-based compensation plans include our employee stock purchase plan and our long-term incentive plan. In February 2025, we amended our long-term incentive plan to increase the aggregate number of shares available for issuance under the plan to 4.7 million shares of common stock, along with any shares released due to the forfeiture or termination of awards issued under the previous plan. As of December 31, 2025, 1.8 million shares remained available for issuance.
Under both our current and previous plans, we have granted non-qualified stock options, restricted stock units, and performance share unit awards. The current plan also permits the issuance of restricted stock and stock appreciation rights, although none of these were outstanding as of December 31, 2025. Our policy regarding the recognition of compensation expense for employee share-based awards can be found in Note 1.
The following amounts were recognized in our consolidated statements of income for share-based compensation awards for the years ended December 31:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Restricted stock units | $ | 17.3 | $ | 14.1 | $ | 14.1 | ||||||||||||||
| Performance share unit awards | 7.1 | 4.7 | 4.1 | |||||||||||||||||
| Employee stock purchase plan | 0.4 | 0.4 | 0.5 | |||||||||||||||||
| Stock options | 0.1 | 0.7 | 1.8 | |||||||||||||||||
| Total share-based compensation expense | $ | 24.9 | $ | 19.9 | $ | 20.5 | ||||||||||||||
| Income tax benefit | $ | (7.1) | $ | (6.3) | $ | (7.4) | ||||||||||||||
As of December 31, 2025, the total compensation expense for unvested awards not yet recognized in our consolidated statements of income was $21.0 million, net of the effect of estimated forfeitures. This amount is expected to be recognized over a weighted-average period of 1.7 years.
Non-qualified stock options – All options permit the purchase of shares of common stock at prices equal to the market value of the stock on the grant date. Options become exercisable starting one year after the grant date, with one-fourth vesting each year over four years, and options can be exercised for up to 10 years following the grant date. No stock options were granted during the past three years.
Each option can be converted into one share of common stock upon exercise. Information regarding our options was as follows:
Number of options (in thousands) | Weighted-average exercise price per option | Aggregate intrinsic value(1) (in millions) | Weighted-average remaining contractual term (in years) | |||||||||||||||||||||||
Outstanding at December 31, 2024 | 1,197 | $ | 44.03 | |||||||||||||||||||||||
| Forfeited or expired | (314) | 51.29 | ||||||||||||||||||||||||
Outstanding at December 31, 2025 | 883 | 41.45 | $ | — | 4.1 | |||||||||||||||||||||
Exercisable at December 31, 2025 | 883 | 41.45 | $ | — | 4.1 | |||||||||||||||||||||
(1) The intrinsic value of a stock award is defined as the amount by which the fair value of the underlying stock exceeds the exercise price of the award.
Restricted stock units – We grant RSU awards under our long-term incentive plan, which generally vest over periods ranging from to four years. In addition to the awards granted to employees, non-employee members of our board of directors can elect to receive all or a portion of their fees in the form of RSUs.
Each RSU converts into one share of common stock upon completion of the vesting period. Information regarding our RSUs was as follows:
Number of units (in thousands) | Weighted-average grant date fair value per unit | Weighted-average remaining vesting period (in years) | ||||||||||||||||||
Outstanding at December 31, 2024 | 1,472 | $ | 21.57 | |||||||||||||||||
| Granted | 1,007 | 17.63 | ||||||||||||||||||
| Vested | (713) | 22.27 | ||||||||||||||||||
| Forfeited | (175) | 19.03 | ||||||||||||||||||
Outstanding at December 31, 2025 | 1,591 | 19.03 | 1.5 | |||||||||||||||||
The fair market value of RSUs that vested was $13.1 million in 2025, $11.4 million in 2024, and $8.5 million in 2023.
Performance share unit awards – Our PSU awards have a -year vesting period. Shares are issued at the end of the vesting period if performance targets related to revenue, free cash flow, and total shareholder return are met. If employment is terminated for any reason prior to the one year anniversary of the commencement of the performance period, the award is forfeited. On or after the one year anniversary of the commencement of the performance period, a pro-rata portion of the shares awarded at the end of the performance period is issued in the case of qualified retirement, death, disability, involuntary termination without cause, or resignation for good reason, as defined in the agreement.
The following weighted-average assumptions were used in the Monte Carlo simulation model to determine the fair value of market-based PSUs granted:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Risk-free interest rate | 4.3 | % | 4.4 | % | 4.4 | % | ||||||||||||||
| Dividend yield | 6.7 | % | 6.0 | % | 6.1 | % | ||||||||||||||
| Expected volatility | 38.5 | % | 38.5 | % | 54.3 | % | ||||||||||||||
The risk-free interest rate for periods within the expected award life is derived from the U.S. Treasury yield curve in effect at the grant date. The dividend yield is estimated over the expected life of the award, based on historical dividends paid. Expected volatility is calculated using the historical volatility of our stock over the expected life of the award.
Information regarding our PSUs was as follows:
Performance share units (in thousands) | Weighted-average grant date fair value per unit | Weighted-average remaining contractual term (in years) | ||||||||||||||||||
Unvested at December 31, 2024 | 691 | $ | 22.47 | |||||||||||||||||
Granted(1) | 355 | 16.09 | ||||||||||||||||||
| Vested | (37) | 30.35 | ||||||||||||||||||
| Forfeited | (122) | 37.57 | ||||||||||||||||||
Unvested at December 31, 2025 | 887 | 17.53 | 1.2 | |||||||||||||||||
(1) Reflects awards granted assuming achievement of performance goals at target.
Employee stock purchase plan – During 2025, 0.2 million shares were issued under this plan at prices ranging from $12.41 to $16.04. During 2024, 0.2 million shares were issued at prices ranging from $13.76 to $16.91. During 2023, 0.2 million shares were issued at prices ranging from $12.61 to $15.77.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 19, 2016 | |
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.