Everus Construction Group, Inc.ECG
Everus Construction Group, Inc. Stock Compensation Disclosure
Stock-Based Compensation
Pre-Separation
Prior to the Separation, key employees of the Company participated in the stock-based compensation plans authorized and managed by MDU Resources. In connection with MDU Resources’ separation of Knife River Corporation (“Knife River”) on May 31, 2023, the provisions of the existing MDU Resources’ compensation plans required adjustments to the number and terms of outstanding employee time-vesting RSUs and PSAs to preserve the intrinsic value of the awards immediately prior to the Knife River Corporation (“Knife River”) separation.
However, the outstanding MDU Resources PSAs would no longer be subject to performance-based vesting conditions. The MDU Resources PSAs were first adjusted for performance. The combined performance factors were determined based on the performance of MDU Resources as of December 31, 2022. Then, at the time of the Knife River separation, all outstanding stock-based compensation awards of MDU Resources were converted into MDU Resources time-vesting RSUs. Following the Knife River separation, no MDU Resources PSAs existed.
In addition, similar required adjustments were needed to the number and terms of outstanding MDU Resources time-vesting RSUs to preserve the intrinsic value of the awards immediately prior to the Separation. At the time of Separation, all outstanding MDU Resources time-vesting RSUs held by Company employees were converted into Everus time-vesting RSUs.
The number of Everus time-vesting RSUs was determined by taking the closing per share price of MDU Resources on October 31, 2024, and dividing by the closing per share price of Everus on November 1, 2024. The ratio used to convert the MDU Resources’ time-vesting RSUs was designed to preserve the aggregate intrinsic value of the awards immediately after the Separation when compared to the aggregate intrinsic value of the awards immediately prior to the Separation. The existing unvested time-vesting RSUs issued through MDU Resources’ stock-based compensation plans were modified in connection with the Separation to maintain an equivalent value immediately before and after Separation. Everus did not incur any incremental compensation expenses related to the conversion of the time-vesting RSUs. The outstanding Everus time-vesting RSUs will continue to vest over the original vesting periods of three years from the respective grant dates, contingent on continued employment.
Post-Separation
The Company has its own stock-based compensation plan under which it’s currently authorized to issue 2.5 million RSUs, PSAs and other stock awards under the Everus Construction Group, Inc. Long-Term Performance-Based Incentive Plan (“Everus LTIP”). As of December 31, 2025, there were approximately 2.4 million shares available for issuance, with approximately 2.2 million shares available for grant under the Everus LTIP. There were approximately 0.2 million of outstanding stock awards that were either vested, but unsettled in shares of common stock or nonvested as of December 31, 2025. The Company either purchases shares on the open market or issues new shares of common stock to satisfy the vesting of stock-based awards.
The Company’s compensation committee has the authority to select recipients of awards, determine the type and size of awards, and establish certain terms and conditions of award grants.
Total stock-based compensation expense, including Company participants and non-employee directors, was $6.3 million, $1.6 million, and $0.8 million for the years ended December 31, 2025, 2024 and 2023, respectively, and was included in Selling, general and administrative expenses in the consolidated statements of income.
As of December 31, 2025, total remaining unrecognized compensation expense related to nonvested time-vesting RSUs, including Company participant and non-employee directors awards, and nonvested PSAs was approximately $4.2 million, which is expected to be amortized over a weighted average period of 1.40 years.
Restricted Stock Units
As previously discussed, adjustments were made to the number of MDU Resources time-vesting RSUs to preserve the intrinsic value of the awards in connection with the separation of Knife River in 2023 and outstanding MDU Resources PSAs were converted to MDU Resources time-vesting RSUs. And at the time of Separation, MDU Resources time-vesting RSUs were converted to Everus time-vesting RSUs for outstanding RSUs granted to Everus employees.
During the year ended December 31, 2025, the Company’s compensation committee granted 47,705 time-vesting RSUs to employees under the Everus LTIP at a weighted-average grant-date fair value per share of $49.60. The time-vesting RSUs generally vest ratably in equal installments over three years, contingent on continued employment through the vesting periods. Upon vesting, participants receive dividends, if any, that accumulate during the vesting period.
During the year ended December 31, 2025, 18,304 shares of common stock were issued, on a net settlement basis, in connection with vested time-vesting RSUs. The gross issuance of 30,939 shares of common stock was considered noncash financing activities, as no cash was exchanged for the shares. However, the Company withheld/repurchased 12,635 to satisfy the employees withholding tax obligations, as evidenced by the financing cash outflow on the consolidated statement of cash flows.
During the year ended December 31, 2025, the Company’s compensation committee granted 19,664 time-vesting RSUs to the Company’s non-employee directors under the Everus LTIP at a weighted-average grant-date fair value per share of $59.13. The time-vesting RSUs generally vest over one year on the first anniversary of the Company's 2025 Annual Meeting of Stockholders, contingent on continued service on the Everus board of directors. Upon vesting, participants receive dividends, if any, that accumulate during the vesting period.
A summary of time-vesting RSUs activity for the years ended December 31, 2025 and 2024, including the conversion to Everus RSUs in 2024, was as follows:
RSUs | |||||||||||
Number of Shares | Weighted-Average Grant-Date Fair Value Per Share2 | ||||||||||
Nonvested pre-Separation | 243,327 | $ | 21.37 | ||||||||
Conversion to Everus RSUs1 | (109,596) | ||||||||||
Vested shares | (30,939) | 40.72 | |||||||||
Nonvested as of December 31, 2024 | 102,792 | 38.33 | |||||||||
Granted shares | 67,369 | 52.38 | |||||||||
Vested shares | (45,419) | 38.82 | |||||||||
Nonvested as of December 31, 2025 | 124,742 | $ | 45.74 | ||||||||
__________________
1.Includes the conversion adjustments to preserve the intrinsic value of the awards.
2.Weighted-average grant-date fair value per share represented post-separations of Knife River and the Company from MDU Resources in 2023 and 2024, respectively, as applicable.
The approximate fair value on vesting date of time-vesting RSUs that vested on December 31, 2025 was $3.9 million. The time-vesting RSUs that vested on December 31, 2024 were net settled in shares of Company common stock in February 2025, with an approximate fair value of $1.4 million before shares were withheld for tax purposes. The time-vesting RSUs that vested during the year ended December 31, 2025, along with the first installment of the annual time-vesting RSUs granted in 2025, are scheduled to be settled in shares of Company common stock at the end of February 2026.
As of December 31, 2025, total remaining unrecognized compensation expense related to nonvested time-vesting RSUs, including Company participant and non-employee directors awards, was approximately $1.9 million, which is expected to be amortized over a weighted average period of 1.04 years.
Performance Share Awards
During the year ended December 31, 2025, the Company’s compensation committee granted 55,092 PSAs, at target, under the Everus LTIP. The PSAs are generally earned over a three-year performance period, with vesting generally at the end of the performance period, dependent upon achievement of performance measures and continued employment through the vesting period. The target number of shares are split equally between performance and market conditions. Upon vesting, participants may receive dividends, if any, that accumulate during the vesting period.
Under the performance conditions for these PSAs, participants can earn from 0% to 200% of the apportioned target grant of shares. The performance conditions are tied to specific financial metrics. The weighted-average grant-date fair value per share for the PSAs applicable to these performance conditions issued during the year ended December 31, 2025 was $47.27.
Under the market condition for these PSAs, participants can earn from 0% to 200% of the apportioned target grant of shares based on the Company’s total shareholder return relative to that of a selected peer group. The weighted-average grant-date fair value per share for the PSAs applicable to the market condition issued during the year ended December 31, 2025 was $56.93, which was determined by multiple Monte Carlo simulations.
A summary of PSAs activity for the year ended December 31, 2025 was as follows:
PSAs | |||||||||||
Number of Shares | Weighted Average Grant-Date Fair Value Per Share | ||||||||||
Nonvested as of December 31, 2024 | — | $ | — | ||||||||
Granted shares | 55,092 | 52.10 | |||||||||
Nonvested as of December 31, 2025 | 55,092 | $ | 52.10 | ||||||||
For the Monte Carlo simulations performed during the year ended December 31, 2025, the blended volatility term structure ranges were comprised of 50% historical volatility and 50% implied volatility. Risk-free interest rates were based on US Treasury security rates in effect as of the respective grant date. The weighted-average grant-date fair value per share and the assumptions used for grants applicable to PSAs with a market condition granted during the year ended December 31, 2025 were:
Annual Award | Off-Cycle Award | ||||||||||
Weighted-average grant-date fair value per share | $ | 55.82 | $ | 72.20 | |||||||
Assumptions: | |||||||||||
Performance period | January 1, 2025 to December 31, 2027 | January 1, 2025 to December 31, 2027 | |||||||||
Grant date closing stock price | $ | 46.54 | $ | 57.39 | |||||||
Blended volatility range | 44.33% - 47.07% | 46.31% - 52.10% | |||||||||
| Risk-free interest rate range | 4.37% - 4.46% | 4.08% - 4.24% | |||||||||
Dividend yield | 0.00 | % | 0.00 | % | |||||||
As of December 31, 2025, total remaining unrecognized compensation expense related to nonvested PSAs was approximately $2.3 million, which is expected to be amortized over a weighted average period of 1.70 years.
The remaining unrecognized compensation for nonvested PSAs with performance conditions was based on the expected achievement of the financial metrics related to the nonvested PSAs as of the end of reporting period. As such, compensation expense related to these nonvested PSAs can vary at each reporting period based on changes in expected achievement of the performance measures. In addition, if the expected achievement of the performance measures change, the total number of shares expected to be earned and vested will also change. However, the remaining unrecognized compensation expense related to nonvested PSAs with a market condition is unaffected by the expected achievement of the performance measure, since it is already included in the Monte Carlo simulations that produce the grant-date fair values.
Stock Awards
Prior to the non-employee director time-vesting RSU grants, the non-employee directors received shares of common stock in addition to cash payments for directors’ fees through fully vested stock award grants. On May 22, 2025, the Company granted 6,778 shares with a grant-date fair value of approximately $0.4 million to the non-employee directors, which represented noncash financing activities.
During the year ended December 31, 2025, the Company issued 713 shares of common stock to certain non-employee directors who chose to convert a portion of their monthly cash payments for directors’ fees into shares of Company common stock, which represented noncash financing activities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
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.