DXP ENTERPRISES INCDXPE

DXP ENTERPRISES INC Stock Compensation Disclosure

10-KFiled Feb 26, 20262 min read
SHARE-BASED COMPENSATION
2016 Omnibus Incentive Plan

On June 16, 2023, our shareholders approved an amendment to the DXP Enterprises, Inc. 2016 Omnibus Incentive Plan (the “2016 Plan”) to increase the number of shares that can be issued under the 2016 Plan from 1,000,000 shares to a total of 1,250,000 shares, which represents an increase of 250,000 shares (the “Amendment”), which authorized grants of restricted stock awards, restricted stock units, performance awards, options, investment rights, and cash-based awards.

Restricted Stock Awards

The Company grants restricted stock awards (“RSAs”) to employees and non-employee directors. RSAs qualify as participating securities as each award contains non-forfeitable rights to dividends. RSAs are considered outstanding at the date of grant. Refer to Note. 12 Earnings Per Share for further detail.

RSAs are subject to vesting periods between one to ten years. Compensation expense for RSAs is calculated based on the closing price of the Company’s common stock at the date of grant and recognized over the requisite vesting period on a straight-line basis. Unvested RSAs may be forfeited if employees or non-employee directors cease employment or services during the requisite vesting period. Forfeitures reduce expense at the time employment or service cease at the original grant date value. The Company issues new shares of common stock, if available, to settle vested RSAs. At December 31, 2025, 316,163 shares were available for grant.

Changes in RSAs for the twelve months ended December 31, 2025 are as follows:
 Number of
Shares		Weighted Average
Grant Price
Non-vested at December 31, 2024302,400 $38.11 
Granted57,275 $89.87 
Forfeited(2,478)$40.34 
Vested(151,486)$35.73 
Non-vested at December 31, 2025205,711 $54.25 
Changes in RSAs for the twelve months ended December 31, 2024 are as follows:
 Number of
Shares		Weighted Average
Grant Price
Non-vested at December 31, 2023304,437 $27.60 
Granted127,860 $52.89 
Forfeited(9,644)$26.96 
Vested(120,253)$28.13 
Non-vested at December 31, 2024302,400 $38.11 
Changes in RSAs for the twelve months ended December 31, 2023 are as follows:
 Number of
Shares		Weighted Average
Grant Price
Non-vested at December 31, 2022157,767 $28.64 
Granted215,554 $27.36 
Forfeited— $— 
Vested(68,884)$29.23 
Non-vested at December 31, 2023304,437 $27.60 
The following table sets forth information regarding the vesting and distribution of RSAs for the periods indicated (in thousands):

  December 31,
  20252024
2023
Aggregate grant-date fair value of vested shares
$5,412 $3,382 $2,013 
Tax benefits realized for tax deductions related to vestings
1,462 803 756 
Compensation expense associated with RSAs recognized during the period
5,708 4,714 3,072 

Unrecognized compensation expense under the 2016 Plan at December 31, 2025, December 31, 2024 and December 31, 2023 was $6.9 million, $7.7 million and $5.9 million, respectively. As of December 31, 2025, the weighted average period over which the unrecognized compensation expense is expected to be recognized is 1.2 years.
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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.

Other Available Disclosures

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