Eastern Bankshares, Inc.EBC
Eastern Bankshares, Inc. Stock Compensation Disclosure
Share-Based Compensation
Employee Stock Ownership Plan
As part of the IPO completed on October 14, 2020, the Company established a tax-qualified Employee Stock Ownership Plan to provide eligible employees the opportunity to own Company shares. The ESOP borrowed $149.4 million from the Company to purchase 14,940,652 common shares during the IPO and in the open market. The loan is payable in annual installments over 30 years at an interest rate equal to the Prime rate as published in the The Wall Street Journal. As the loan is repaid to the Company, shares are released and allocated proportionally to eligible participants on the basis of each participant’s proportional share of compensation relative to the compensation of all participants. The unallocated ESOP shares are pledged as collateral on the loan.
The Company accounts for its ESOP in accordance with FASB ASC 718-40, “Compensation – Stock Compensation.” Under this guidance, unreleased shares are deducted from shareholders’ equity as unearned ESOP shares in the accompanying Consolidated Balance Sheets. The Company recognizes compensation expense equal to the fair value of the ESOP shares during the periods in which they are committed to be released. To the extent that the fair value of the Company’s ESOP shares differs from the cost of such shares, the difference is credited or debited to equity. As the loan is internally leveraged, the loan receivable from the ESOP to the Company is not reported as an asset nor is the debt of the ESOP shown as a liability in the Company’s Consolidated Balance Sheets. Dividends on unallocated shares are used to pay the ESOP debt.
The following table presents the amount of compensation expense associated with the ESOP and the amount of the loan payments made by the ESOP, including the portions related to principal and interest, for the periods indicated:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Compensation expense | $ | 8,390 | $ | 7,356 | $ | 7,129 | |||||||||||
| Annual loan payment: | |||||||||||||||||
| Interest | 10,628 | 11,543 | 9,374 | ||||||||||||||
| Principal | 1,800 | 1,523 | 2,914 | ||||||||||||||
| Total loan payment | $ | 12,428 | $ | 13,066 | $ | 12,288 | |||||||||||
The number of shares committed to be released per year is estimated to be 495,313 through 2049 and 392,123 in the year 2050.
The following table presents share information held by the ESOP:
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (Dollars in thousands) | |||||||||||
| Allocated shares | 2,347,249 | 1,889,114 | |||||||||
| Shares committed to be released | 103,190 | 103,078 | |||||||||
| Unallocated shares (suspense shares) | 12,279,642 | 12,784,387 | |||||||||
| Total shares | 14,730,081 | 14,776,579 | |||||||||
| Fair value of unallocated shares | $ | 226,314 | $ | 220,531 | |||||||
Share-Based Compensation Plan
On November 29, 2021, the shareholders of the Company approved the Eastern Bankshares, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the issuance of up to 26,146,141 shares of common stock pursuant to grants of restricted stock, restricted stock units (“RSUs”), non-qualified stock options and incentive stock options, any or all of which can be granted with performance-based vesting conditions. Under the 2021 Plan, 7,470,326 shares may be issued as restricted stock or RSUs, including those issued as performance shares and performance share units (“PSUs”), and 18,675,815 shares may be issued upon the exercise of stock options. These shares may be awarded from the Company’s authorized but unissued shares. However, the 2021 Plan permits the grant of additional awards of restricted stock or RSUs above the aforementioned limit, provided that, for each additional share of restricted stock or RSU awarded in excess of such limit, the pool of shares available to be issued upon the exercise of stock options will be reduced by three shares. Pursuant to the terms of the 2021 Plan, each of the Company’s non-employee directors were automatically granted awards of restricted
stock on November 30, 2021. Such restricted stock awards vest pro-rata on an annual basis over a five-year period. The maximum term for stock options is ten years.
The following table summarizes the share-based compensation awards for the years ended December 31, 2025, 2024 and 2023:
| Time | Type of award | Shares granted | Vesting Period (Approximate from date of grant) (1) | ||||||||||||||
| 2025 | |||||||||||||||||
| May | RSA | 54,326 | 1 year | ||||||||||||||
| March | RSU | 630,493 | 3 years | ||||||||||||||
| March | PSU | 339,503 | 2.8 years | ||||||||||||||
| 2024 | |||||||||||||||||
| September | RSU | 146,178 | 3 years | ||||||||||||||
| September | PSU | 67,350 | 2.3 years | ||||||||||||||
| May | RSA | 56,352 | 1 year | ||||||||||||||
| March | RSU | 416,276 | 3 years | ||||||||||||||
| March | PSU | 234,091 | 2.8 years | ||||||||||||||
| 2023 | |||||||||||||||||
| May | RSA | 47,820 | 1 year | ||||||||||||||
| March | RSU | 318,577 | 3 years | ||||||||||||||
| March | PSU | 108,984 | 3 years | ||||||||||||||
(1)Vesting of PSU awards is contingent upon the Compensation and Human Capital Management Committee of the Board of Director’s certification, after the conclusion of the period indicated from the date of the grant, that the Company has attained a threshold level of certain performance criteria over such period.
As of December 31, 2025 and 2024, there were 3,134,086 shares and 3,844,157 shares that remained available for issuance as restricted stock or RSU awards (including those that may be issued as performance shares and PSUs), respectively, and 18,675,815 shares that remained available for issuance upon the exercise of stock options at both dates. As of both December 31, 2025 and 2024, no stock options had been awarded under the 2021 Plan.
The following table summarizes the Company’s restricted stock award activity for the periods indicated:
| For the Years Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Restricted Stock Awards | Number of Shares | Weighted-Average Grant Price Per Share | Number of Shares | Weighted-Average Grant Price Per Share | |||||||||||||||||||
| Non-vested restricted stock at beginning of year | 316,945 | $ | 18.02 | 420,400 | $ | 19.15 | |||||||||||||||||
| Granted | 54,236 | 15.58 | 56,352 | 13.84 | |||||||||||||||||||
| Vested | (173,230) | 17.61 | (275,474) | 16.27 | |||||||||||||||||||
| Forfeited | (2,983) | 14.87 | (3,026) | 14.87 | |||||||||||||||||||
| Converted in connection with merger | — | — | 118,693 | 14.87 | |||||||||||||||||||
| Non-vested restricted stock at end of year | 194,968 | $ | 17.75 | 316,945 | $ | 18.02 | |||||||||||||||||
The following table summarizes the Company’s restricted stock unit activity for the periods indicated:
| For the Years Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Restricted Stock Units | Number of Shares | Weighted-Average Grant Price Per Share | Number of Shares | Weighted-Average Grant Price Per Share | |||||||||||||||||||
| Non-vested restricted stock at beginning of year | 1,356,522 | $ | 16.55 | 952,001 | $ | 19.46 | |||||||||||||||||
| Granted | 630,493 | 17.73 | 562,454 | 13.83 | |||||||||||||||||||
| Vested | (636,413) | 17.09 | (372,179) | 18.62 | |||||||||||||||||||
| Forfeited | (24,620) | 15.42 | (22,520) | 13.20 | |||||||||||||||||||
| Converted in connection with merger | — | — | 236,766 | 14.87 | |||||||||||||||||||
| Non-vested restricted stock at end of year | 1,325,982 | $ | 16.87 | 1,356,522 | $ | 16.55 | |||||||||||||||||
The following table summarizes the Company’s performance stock unit activity for the periods indicated:
| For the Years Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Performance Stock Units | Number of Shares | Weighted-Average Grant Price Per Share | Number of Shares | Weighted-Average Grant Price Per Share | |||||||||||||||||||
| Non-vested restricted stock at beginning of year | 969,739 | $ | 16.63 | 633,034 | $ | 19.40 | |||||||||||||||||
| Granted | 339,503 | 18.79 | 301,441 | 10.82 | |||||||||||||||||||
| Vested | (408,629) | 20.96 | (76,353) | 14.87 | |||||||||||||||||||
| Forfeited | (282,698) | 20.57 | — | — | |||||||||||||||||||
| Converted in connection with merger | — | — | 111,617 | 14.87 | |||||||||||||||||||
| Non-vested restricted stock at end of year | 617,915 | $ | 13.15 | 969,739 | $ | 16.63 | |||||||||||||||||
Included in vested RSU and PSU shares, as shown in the tables above, are shares withheld for employee payroll taxes. The aggregate number of RSU and PSU shares withheld for payroll taxes during the years ended December 31, 2025, 2024, and 2023, was 401,357, 147,323, and 95,808, respectively.
The following table shows share-based compensation expense under the 2021 Plan and the related tax benefit for the periods indicated:
| For the Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In millions) | |||||||||||||||||
| Share-based compensation expense | $ | 16.9 | $ | 19.3 | $ | 16.5 | |||||||||||
Related tax benefit (1) | 4.7 | 5.3 | 4.7 | ||||||||||||||
(1)Estimated based upon the Company’s statutory rate for the respective period.
As of December 31, 2025 and 2024, there was $20.8 million and $21.4 million, respectively, of total unrecognized compensation expense related to unvested RSAs, RSUs, and PSUs granted and issued under the 2021 Plan, as applicable. As of December 31, 2025, this cost is expected to be recognized over a weighted average remaining period of approximately 1.6 years. As of December 31, 2024, this cost was expected to be recognized over a weighted average remaining period of approximately 1.4 years.
Stock Options
In connection with the Company’s merger with HarborOne, 728,896 stock options, which were awarded by HarborOne to certain employees and which were fully vested at the time of the merger close, were converted to stock options of the Company. The fair value of each option was estimated on the merger closing date of November 1, 2025 using the Black-Scholes option-pricing model with the portion of fair value related to pre-combination service being included as an adjustment to consideration paid in the merger. The valuation model included the following assumptions: (i) volatility was based upon the Company’s historical volatility; (ii) expected life represented the period of time that the option is expected to be outstanding, taking into account the contractual term and the vesting period; (iii) expected dividend yield was based on the Company’s history and expectation of dividend payouts; (iv) the risk-free rate was based on the U.S. Treasury yield curve in effect at the
time of grant for a period equivalent to the weighted average expected life of the option, which was approximately three months.
During the fourth quarter of 2025 and following the merger completion, 400,279 options were exercised. As of December 31, 2025, there were 328,617 outstanding options which had an aggregate fair value of $1.5 million. As of December 31, 2025, the weighted average remaining contractual term was 6 months.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 26, 2024 | |
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.