ENSIGN GROUP, INCENSG
ENSIGN GROUP, INC Stock Compensation Disclosure
OPTIONS AND AWARDS
The Company has one stock incentive plan, the Amended and Restated 2022 Omnibus Incentive Plan (the Amended and Restated Plan), pursuant to which grants of the Company's securities may currently be made. During the second quarter of 2025, the Company’s stockholders approved the Amended and Restated Plan, which increased the total number of shares authorized for issuance under the 2022 Omnibus Incentive Plan (the Predecessor Plan). Including the shares rolled over from the Predecessor Plan, the Amended and Restated Plan provides for the issuance of 4,231 shares of common stock. The number of shares available to be issued under the Amended and Restated Plan will be reduced by (i) one share for each share that relates to an option or stock appreciation right award and (ii) two shares for each share which relates to an award other than a stock option or stock appreciation right award (a full-value award). Non-employee director options, to the extent granted, will vest and become exercisable in three equal annual installments, or the length of the term if less than three years, on the completion of each year of service measured from the grant date. All other options generally vest over five years at 20% per year on the anniversary of the grant date. Options expire ten years from the date of grant. At December 31, 2025, the total number of shares available for issuance under the Amended and Restated Plan was 3,397.
The Company uses the Black-Scholes option-pricing model to recognize the value of stock-based compensation expense for stock option awards. Determining the appropriate fair-value model and calculating the fair value of stock option awards at the grant date requires judgment, including estimating stock price volatility, expected option life, and forfeiture rates. The fair-value of the restricted stock awards at the grant date is based on the market price on the grant date, adjusted for forfeiture rates. The Company develops estimates based on historical data and market information, which can change significantly over time.
•The expected option term is calculated by the average of the contractual term of the options and the weighted average vesting period for all options. The calculation of the expected option term is based on the Company's experience due to sufficient history.
•The Company utilizes its own experience to calculate estimated volatility for options granted.
•The dividend yield is based on the Company's historical pattern of dividends as well as expected dividend patterns.
•The risk-free rate is based on the implied yield of U.S. Treasury notes as of the grant date with a remaining term approximately equal to the expected term.
•Estimated forfeiture rate of approximately 4.62% per year is based on the Company's historical forfeiture activity of unvested stock options.
Stock Options
The Company granted 721, 704 and 1,008 stock options during the years ended December 31, 2025, 2024 and 2023, respectively. The Company used the following assumptions for stock options granted during the years ended December 31, 2025, 2024 and 2023:
| Grant Year | Options Granted | Weighted Average Risk-Free Rate | Expected Life | Weighted Average Volatility | Weighted Average Dividend Yield | |||||||||||||||||||||||||||
| 2025 | 721 | 4.1% | 6.2 years | 39.2% | 0.2% | |||||||||||||||||||||||||||
| 2024 | 704 | 4.3% | 6.2 years | 40.5% | 0.2% | |||||||||||||||||||||||||||
| 2023 | 1,008 | 4.3% | 6.2 years | 41.3% | 0.2% | |||||||||||||||||||||||||||
For the years ended December 31, 2025, 2024 and 2023, the following represents the exercise price and fair value displayed at grant date for stock option grants:
| Grant Year | Granted | Weighted Average Exercise Price | Weighted Average Fair Value of Options | |||||||||||||||||
| 2025 | 721 | $ | 160.61 | $ | 71.32 | |||||||||||||||
| 2024 | 704 | $ | 132.46 | $ | 60.37 | |||||||||||||||
| 2023 | 1,008 | $ | 95.05 | $ | 43.85 | |||||||||||||||
The weighted average exercise price equaled the weighted average fair value of common stock on the grant date for all options granted during the periods ended December 31, 2025, 2024 and 2023 and therefore, the intrinsic value was $0 at the date of grant.
The following table represents the employee stock option activity during the years ended December 31, 2025, 2024 and 2023:
| Number of Options Outstanding | Weighted Average Exercise Price | Number of Options Vested | Weighted Average Exercise Price of Options Vested | ||||||||||||||||||||
| January 1, 2023 | 3,833 | $ | 46.72 | 2,069 | $ | 28.87 | |||||||||||||||||
| Granted | 1,008 | 95.05 | |||||||||||||||||||||
| Forfeited | (91) | 71.44 | |||||||||||||||||||||
| Exercised | (759) | 24.21 | |||||||||||||||||||||
| December 31, 2023 | 3,991 | $ | 62.65 | 1,887 | $ | 39.58 | |||||||||||||||||
| Granted | 704 | 132.46 | |||||||||||||||||||||
| Forfeited | (76) | 86.92 | |||||||||||||||||||||
| Exercised | (632) | 35.28 | |||||||||||||||||||||
| December 31, 2024 | 3,987 | $ | 78.84 | 1,895 | $ | 52.64 | |||||||||||||||||
| Granted | 721 | 160.61 | |||||||||||||||||||||
| Forfeited | (60) | 110.62 | |||||||||||||||||||||
| Exercised | (577) | 50.39 | |||||||||||||||||||||
| December 31, 2025 | 4,071 | $ | 96.87 | 1,991 | $ | 67.10 | |||||||||||||||||
The following table represents the employee stock option activity during the year ended December 31, 2025:
| Stock Options Outstanding | Stock Options Vested | |||||||||||||||||||||||||||||||||||||
| Number Outstanding | Black-Scholes Fair Value | Remaining Contractual Life (Years) | Vested and Exercisable | |||||||||||||||||||||||||||||||||||
| Year of Grant | Exercise Price | |||||||||||||||||||||||||||||||||||||
| 2016 | $15.93 | - | $16.86 | 53 | $ | 314 | 1 | 53 | ||||||||||||||||||||||||||||||
| 2017 | 15.80 | - | 19.41 | 104 | 617 | 2 | 104 | |||||||||||||||||||||||||||||||
| 2018 | 22.49 | - | 32.71 | 196 | 2,069 | 3 | 196 | |||||||||||||||||||||||||||||||
| 2019 | 41.07 | - | 45.76 | 302 | 4,743 | 4 | 302 | |||||||||||||||||||||||||||||||
| 2020 | 44.84 | - | 59.49 | 332 | 6,562 | 5 | 332 | |||||||||||||||||||||||||||||||
| 2021 | 73.47 | - | 83.64 | 395 | 12,973 | 6 | 298 | |||||||||||||||||||||||||||||||
| 2022 | 79.79 | - | 94.88 | 430 | 16,364 | 7 | 235 | |||||||||||||||||||||||||||||||
| 2023 | 89.83 | - | 98.83 | 896 | 39,354 | 8 | 336 | |||||||||||||||||||||||||||||||
| 2024 | 119.19 | - | 146.37 | 651 | 39,371 | 9 | 135 | |||||||||||||||||||||||||||||||
| 2025 | $126.34 | - | $189.93 | 712 | 50,864 | 10 | — | |||||||||||||||||||||||||||||||
| TOTAL | 4,071 | $ | 173,231 | 1,991 | ||||||||||||||||||||||||||||||||||
The aggregate intrinsic value of options outstanding, vested and expected to vest as of December 31, 2025, 2024 and 2023 is as follows:
| December 31, | ||||||||||||||||||||
| Options | 2025 | 2024 | 2023 | |||||||||||||||||
| Outstanding | $ | 317,984 | $ | 219,309 | $ | 197,819 | ||||||||||||||
| Vested | 213,189 | 152,011 | 137,048 | |||||||||||||||||
| Expected to vest | 98,487 | 63,243 | 56,759 | |||||||||||||||||
The intrinsic value is calculated as the difference between the market value of the underlying common stock and the exercise price of the options. At December 31, 2025, 2024 and 2023, the aggregate intrinsic value of options that vested during the years ended December 31, 2025, 2024 and 2023 was $54,478, $37,700, and $31,658, respectively. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $60,636, $60,358, and $56,186, respectively.
Restricted Stock Awards
The Company granted 248, 232 and 219 restricted stock awards during the years ended December 31, 2025, 2024 and 2023, respectively. All awards were granted at an issue price of $0 and generally vest over five years. The fair value per share of restricted awards granted during the years ended December 31, 2025, 2024 and 2023 ranged from $126.34 to $189.93, $116.65 to $149.12 and $89.83 to $98.31, respectively. The fair value per share includes quarterly stock awards to non-employee directors. Included in the restricted stock award grants are $8,003 and $6,165 of annual bonuses that were settled in vested restricted stock awards during the years ended December 31, 2025 and 2024, respectively.
A summary of the status of the Company's non-vested restricted stock awards as of December 31, 2025 and changes during the years ended December 31, 2025, 2024 and 2023 is presented below:
| Non-Vested Restricted Awards | Weighted Average Grant Date Fair Value | ||||||||||
| Nonvested at January 1, 2023 | 487 | $ | 64.92 | ||||||||
| Granted | 219 | 92.04 | |||||||||
| Vested | (255) | 64.21 | |||||||||
| Forfeited | (20) | 71.53 | |||||||||
| Nonvested at December 31, 2023 | 431 | $ | 78.91 | ||||||||
| Granted | 232 | 131.26 | |||||||||
| Vested | (215) | 86.97 | |||||||||
| Forfeited | (13) | 83.12 | |||||||||
| Nonvested at December 31, 2024 | 435 | $ | 102.71 | ||||||||
| Granted | 248 | 155.13 | |||||||||
| Vested | (236) | 109.30 | |||||||||
| Forfeited | (11) | 109.85 | |||||||||
Nonvested at December 31, 2025 | 436 | $ | 129.54 | ||||||||
During the year ended December 31, 2025, the Company granted 14 automatic quarterly stock awards to non-employee directors for their service on the Company's board of directors. The fair value per share of these stock awards ranged from $129.09 to $177.94 based on the market price on the grant date.
Stock-based compensation expense
Stock-based compensation expense recognized for the Company's equity incentive plans and long-term incentive plan for the years ended December 31, 2025, 2024 and 2023 was as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Stock-based compensation expense related to stock options | $ | 30,676 | $ | 22,439 | $ | 17,221 | |||||||||||
| Stock-based compensation expense related to restricted stock awards | 15,121 | 11,662 | 11,845 | ||||||||||||||
Stock-based compensation expense related to restricted stock awards to non-employee directors | 2,098 | 2,082 | 1,688 | ||||||||||||||
| TOTAL | $ | 47,895 | $ | 36,183 | $ | 30,754 | |||||||||||
In future periods, the Company expects to recognize approximately $102,691 and $49,326 in stock-based compensation expense for unvested options and unvested restricted stock awards, respectively, that were outstanding as of December 31, 2025. Future stock-based compensation expense will be recognized over 3.7 and 3.8 weighted average years for unvested options and restricted stock awards, respectively. There were 2,080 unvested and outstanding options as of December 31, 2025, of which 1,916 options are expected to vest. The weighted average contractual life for options outstanding, vested and expected to vest as of December 31, 2025 was 6.7 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 4, 2026 | Showing above |
| 2024 | Feb 5, 2025 | |
| 2022 | Feb 2, 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.