EnerSysENS
EnerSys Stock Compensation Disclosure
Stock-Based Compensation
As of March 31, 2025, the Company maintains the 2023 Equity Incentive Plan (“2023 EIP”). The 2023 EIP reserved 3,614,500 shares of common stock for the grant of various classes of nonqualified stock options, restricted stock units, market condition-based on total shareholder return (“TSR”) and performance condition-based share units (“PSU”) and other forms of equity-based compensation. Shares subject to any awards that expire without being exercised or that are forfeited or settled in cash shall again be available for future grants of awards under the 2023 EIP. Shares subject to stock option or stock appreciation right awards, that have been retained by the Company in payment or satisfaction of the exercise price and any applicable tax withholding obligation of such awards, shall not be available for future grant under the 2023 EIP.
As of March 31, 2025, 2,837,222 shares are available for future grants. The Company’s equity incentive plans are intended to provide an incentive to employees and non-employee directors of the Company to remain in the service of the Company and to increase their interest in the success of the Company in order to promote the long-term interests of the Company. The plans seek to promote the highest level of performance by providing an economic interest in the long-term performance of the Company. The Company settles employee share-based compensation awards with newly issued shares.
Stock Options
During fiscal 2025, the Company granted to management and other key employees 266,027 non-qualified options that vest ratably over 3 years from the date of grant. Options expire 10 years from the date of grant.
The Company recognized stock-based compensation expense relating to stock options of $5,869, with a related tax benefit of $1,161 for fiscal 2025, $7,022 with a related tax benefit of $730 for fiscal 2024 and $6,232 with a related tax benefit of $848 for fiscal 2023.
For purposes of determining the fair value of stock options granted, the Company used a Black-Scholes Model with the following assumptions:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Risk-free interest rate | 3.84 | % | 4.24 | % | 2.92 | % | ||||||||||||||
| Dividend yield | 1.02 | % | 0.95 | % | 0.99 | % | ||||||||||||||
| Expected life (years) | 6 | 6 | 6 | |||||||||||||||||
| Volatility | 38.61 | % | 38.25 | % | 37.40 | % | ||||||||||||||
The following table summarizes the Company’s stock option activity in the years indicated:
| Number of Options | Weighted- Average Remaining Contract Term (Years) | Weighted- Average Exercise Price | Aggregate Intrinsic Value | |||||||||||||||||||||||
| Options outstanding as of March 31, 2022 | 975,605 | 7.5 | $ | 78.94 | $ | 3,605 | ||||||||||||||||||||
| Granted | 310,140 | 75.33 | — | |||||||||||||||||||||||
| Exercised | (75,180) | 65.22 | 1,561 | |||||||||||||||||||||||
| Forfeited | (9,575) | 80.05 | 39 | |||||||||||||||||||||||
| Expired | (4,679) | 85.12 | — | |||||||||||||||||||||||
| Options outstanding as of March 31, 2023 | 1,196,311 | 7.3 | $ | 78.83 | $ | 12,150 | ||||||||||||||||||||
| Granted | 200,314 | 101.04 | — | |||||||||||||||||||||||
| Exercised | (197,350) | 71.81 | 6,110 | |||||||||||||||||||||||
| Forfeited | (9,166) | 78.68 | 158 | |||||||||||||||||||||||
| Expired | — | — | — | |||||||||||||||||||||||
| Options outstanding as of March 31, 2024 | 1,190,109 | 7.0 | $ | 83.74 | $ | 15,043 | ||||||||||||||||||||
| Granted | 266,027 | 101.56 | — | |||||||||||||||||||||||
| Exercised | (139,016) | 76.66 | 3,950 | |||||||||||||||||||||||
| Forfeited | (29,340) | 98.38 | 115 | |||||||||||||||||||||||
| Expired | — | — | — | |||||||||||||||||||||||
| Options outstanding as of March 31, 2025 | 1,287,780 | 6.8 | $ | 87.85 | $ | 10,472 | ||||||||||||||||||||
| Options exercisable as of March 31, 2025 | 818,637 | 5.7 | $ | 83.13 | $ | 8,951 | ||||||||||||||||||||
| Options vested and expected to vest, as of March 31, 2025 | 1,269,049 | 6.8 | $ | 87.68 | $ | 10,455 | ||||||||||||||||||||
The following table summarizes information regarding stock options outstanding as of March 31, 2025:
| Range of Exercise Prices | Number of Options | Weighted- Average Remaining Contractual Life (Years) | Weighted- Average Exercise Price | |||||||||||||||||
| $57.60-$60.00 | 90,520 | 4.0 | $ | 57.73 | ||||||||||||||||
| $70.01-$80.00 | 378,411 | 6.4 | $ | 75.71 | ||||||||||||||||
| $80.01-$90.00 | 159,380 | 4.2 | $ | 83.01 | ||||||||||||||||
| $90.01-$100.00 | 209,579 | 8.1 | $ | 93.60 | ||||||||||||||||
| $100.01-$109.69 | 449,890 | 8.1 | $ | 103.24 | ||||||||||||||||
| 1,287,780 | 6.8 | $ | 87.85 | |||||||||||||||||
Restricted Stock Units, Market and Performance-condition based Awards
Non-Employee Directors
In fiscal 2025, the Company granted to non-employee directors 19,214 deferred restricted stock units (“DSU”) at the fair value of $76.52 per unit at the date of grant. In fiscal 2024, such grants amounted to 21,147 DSU's at the fair value of $76.83 per unit at the date of grant and in fiscal 2023, such grants amounted to 39,792 DSU's units at the fair value of $42.95 unit at the date of grant. The awards vest immediately upon the date of grant and are settled in shares of common stock six months after termination of service as a director.
The Company also granted to non-employee directors, during fiscal 2025, fiscal 2024 and fiscal 2023, 9,972, 8,386, and 1,635 restricted stock units, respectively, at fair values of $98.62, $94.34 and $66.90, respectively, under the deferred compensation plan for non-employee directors.
Employees
In fiscal 2025, the Company granted to management and other key employees 361,222 restricted stock units that vest ratably over four years from the date of grant, at the fair value of $94.63 per restricted stock unit.
In fiscal 2024, the Company granted to management and other key employees 269,751 restricted stock units that vest ratably over four years from the date of grant at the fair value of $94.31 per restricted stock unit.
In fiscal 2023, the Company granted to management and other key employees 345,449 restricted stock units that vest ratably over four years from the date of grant at a fair value of $70.88 per restricted stock unit.
A summary of the changes in restricted stock units, including DSU's, and TSRs awarded to employees and directors that were outstanding under the Company’s equity compensation plans during fiscal 2025 is presented below:
| Restricted Stock Units (RSU) | Market condition-based Share Units (TSR) | |||||||||||||||||||||||||
| Number of RSU | Weighted- Average Grant Date Fair Value | Number of TSR | Weighted- Average Grant Date Fair Value | |||||||||||||||||||||||
| Non-vested awards as of March 31, 2024 | 1,022,836 | $ | 69.24 | 1,132 | $ | 66.89 | ||||||||||||||||||||
| Granted | 361,222 | 94.63 | — | — | ||||||||||||||||||||||
| Stock dividend | 9,685 | 75.49 | 11 | 66.89 | ||||||||||||||||||||||
| Performance factor | — | — | — | — | ||||||||||||||||||||||
| Vested | (435,043) | 64.39 | — | — | ||||||||||||||||||||||
| Forfeitures | (38,993) | 86.69 | — | — | ||||||||||||||||||||||
| Non-vested awards as of March 31, 2025 | 919,707 | $ | 80.42 | 1,143 | $ | 66.89 | ||||||||||||||||||||
The Company recognized stock-based compensation expense relating to restricted stock units of $21,867, with a related tax benefit of $3,520 for fiscal 2025, $23,585, with a related tax benefit of $4,557 for fiscal 2024 and $20,139, with a related tax benefit of $3,746 for fiscal 2023.
All Award Plans
As of March 31, 2025, unrecognized compensation expense associated with the non-vested equity awards outstanding was $64,214 and is expected to be recognized over a weighted-average period of 27 months.
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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.