DT Midstream, Inc.DTM
DT Midstream, Inc. Stock Compensation Disclosure
STOCK-BASED COMPENSATION AND DEFINED CONTRIBUTION PLANS
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The DT Midstream, Inc. Long-Term Incentive Plan permits the grant of incentive and nonqualified stock options, stock appreciation rights, restricted stock awards and restricted stock units, performance share awards, and performance units to employees, consultants and members of DT Midstream's Board of Directors. As a result of a restricted stock award grant, restricted stock unit or performance share award settlement, or by exercise of a stock option, we may issue common stock from our authorized but unissued common stock and/or from outstanding common stock acquired by or on behalf of DT Midstream in the participant's name. Key provisions of the DT Midstream Plan are:
•Authorized limit as of December 31, 2025 was 10,000,000 shares of common stock. The authorized limit increases annually on January 1 by the lesser of 1,750,000 shares of common stock or the amount determined by the DT Midstream Board of Directors.
•Prohibits the grant of a stock option with an exercise price that is less than the fair market value of DT Midstream's stock on the grant date.
The following table summarizes our stock-based compensation expense and the related income tax benefit:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (millions) | |||||||||||||||||
| Stock-based compensation expense | $ | 26 | $ | 23 | $ | 20 | |||||||||||
| Tax benefit | $ | 6 | $ | 5 | $ | 5 | |||||||||||
Restricted Stock Units
Restricted stock units granted under the DT Midstream Plan are for a specified number of shares of DT Midstream common stock that entitle the holder to receive common stock, a cash payment, or a combination thereof at the end of the specified vesting period, which is generally or four years. Restricted stock units are deemed to be equity awards. The fair value of restricted stock units is based on DT Midstream's closing common stock price on the grant date. The fair value is amortized to stock-based compensation expense using a graded vesting schedule over the vesting period. Restricted stock units are settled with DT Midstream common stock and fractional shares are settled in cash.
During the vesting period, the number of restricted stock units granted will increase, assuming full dividend reinvestment on each dividend payment date. The recipient of a restricted stock unit has no shareholder rights during the vesting period. Restricted stock units are nontransferable and subject to risk of forfeiture during the vesting period. Forfeitures are recognized in the period they occur.
The following table summarizes restricted stock unit activity for the year ended December 31, 2025:
| Restricted Stock Units | Weighted- Average Grant Date Fair Value | ||||||||||
| (thousands) | (per share) | ||||||||||
| Nonvested as of December 31, 2024 | 461 | $ | 51.37 | ||||||||
Granted (a) | 105 | 92.35 | |||||||||
| Forfeited | (10) | 81.04 | |||||||||
Vested | (237) | 45.89 | |||||||||
| Nonvested as of December 31, 2025 | 319 | $ | 68.20 | ||||||||
(a)Includes initial grants and dividends reinvested.
The weighted-average grant date fair value of restricted stock units granted, excluding dividends reinvested, during the years ended December 31, 2025, 2024 and 2023 was $99.05, $62.63 and $52.66, respectively. The intrinsic value of restricted stock units vested and issued during the years ended December 31, 2025, 2024 and 2023 was $25 million, $7 million, and $8 million, respectively.
Performance Share Awards
Performance share awards granted under the DT Midstream Plan are for a specified number of shares of DT Midstream common stock that entitle the holder to receive common stock, a cash payment, or a combination thereof at the end of the specified vesting period, which is generally three years. Performance share awards are deemed to be equity awards. Performance share stock-based compensation expense is accrued over the vesting period based on the grant date fair value calculated using: (i) DT Midstream's closing common stock price on the grant date; (ii) the grant date fair value of the market condition; and (iii) the probable achievement of performance objectives. The number of shares issued at settlement is determined based on market conditions and the achievement of certain DT Midstream performance objectives. Performance share awards are settled with DT Midstream common stock and fractional shares are settled in cash.
During the vesting period, the number of performance share awards granted will increase, assuming full dividend reinvestment on each dividend payment date. The recipient of a performance share award has no shareholder rights during the vesting period. Performance share awards are nontransferable and are subject to risk of forfeiture during the vesting period. Forfeitures are recognized in the period they occur.
The following table summarizes performance share award activity for the year ended December 31, 2025:
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Performance Share Awards | Weighted- Average Grant Date Fair Value | ||||||||||
| (thousands) | (per share) | ||||||||||
| Nonvested as of December 31, 2024 | 701 | $ | 64.38 | ||||||||
Granted (a) | 376 | 83.42 | |||||||||
| Forfeited | (18) | 72.90 | |||||||||
| Settled | (364) | 72.97 | |||||||||
| Nonvested as of December 31, 2025 | 695 | $ | 69.95 | ||||||||
(a)Includes initial grants, dividends reinvested and shares added for achievement of final performance objectives on settled awards.
The weighted-average grant date fair value of performance share awards granted, excluding dividends reinvested, during the years ended December 31, 2025, 2024 and 2023 was $99.79, $52.05 and $53.74, respectively. The intrinsic value of performance share awards settled during the years ended December 31, 2025, 2024 and 2023 was $35 million, $10 million and $9 million, respectively.
Unrecognized Compensation Costs
As of December 31, 2025, we had $28 million of total unrecognized compensation costs related to non-vested stock incentive plan arrangements. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.68 years.
Defined Contribution Plans
We sponsor defined contribution retirement savings plans, and participation in one of these plans is available to substantially all employees. We match employee contributions up to certain predefined and Internal Revenue Service limits based on eligible compensation and each employee's contribution rate, and contribute additional amounts in lieu of traditional pension and post-employment healthcare benefits. DT Midstream's cost for these plans was $10 million, $7 million and $7 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 16, 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.