Extra Space Storage Inc.EXR
Extra Space Storage Inc. Stock Compensation Disclosure
STOCK-BASED COMPENSATION
As of December 31, 2025, 6,472,477 shares were available for issuance under the Company’s 2015 Incentive Award Plan (the “Plan”). The Company added shares to the plan through an S-8 filed with the SEC on August 1, 2025.
Options are exercisable once vested. Options are exercisable at such times and subject to such terms as determined by the Compensation Committee, but under no circumstances may be exercised if such exercise would cause a violation of the ownership limit in the Company’s charter. Options expire 10 years from the date of grant. All of the Company’s remaining outstanding options were exercised during the year ended December 31, 2024.
As defined under the terms of the Plan, restricted stock grants may be awarded. The stock grants are subject to a vesting period over which the restrictions are released and the stock certificates are given to the grantee. During the vesting period, the grantee is not permitted to sell, transfer, pledge, encumber or assign shares of restricted stock granted under the Plan; however, the grantee has the ability to vote the shares and receive nonforfeitable dividends paid on shares. Unless otherwise determined by the Compensation Committee at the time of grant, the forfeiture and transfer restrictions on the shares lapse over a one-year period or a four-year period beginning on the date of grant.
Option Grants
A summary of stock option activity is as follows:
| Options | Number of Shares | Weighted Average Exercise Price | |||||||||
| Outstanding at December 31, 2022 | 9,272 | $ | 82.47 | ||||||||
| Exercised | — | $ | — | ||||||||
| Outstanding at December 31, 2023 | 9,272 | $ | 82.47 | ||||||||
| Exercised | (9,272) | $ | 82.47 | ||||||||
| Outstanding at December 31, 2024 | — | $ | — | ||||||||
| Outstanding at December 31, 2025 | — | $ | — | ||||||||
The total intrinsic value of options exercised for the years ended December 31, 2025, 2024 and 2023 was $0, $798 and $0, respectively.
There have been no options granted since 2016. The Company recorded no compensation expense relating to outstanding options in general and administrative expense for the years ended December 31, 2025, 2024 and 2023. Net proceeds received for the years ended December 31, 2025, 2024 and 2023, related to option exercises was $0, $765 and $0, respectively. At December 31, 2025, there was no unrecognized compensation expense related to non-vested stock options under the Plan.
Common Stock Granted to Employees and Directors
The Company recorded $20,620, $16,808 and $14,205 of expense in general and administrative expense in its statement of operations related to restricted stock awards granted to employees and directors for the years ended December 31, 2025, 2024 and 2023, respectively. The forfeiture rate, which is estimated at a weighted-average of 5.2% of unvested awards outstanding as of December 31, 2025, is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimates. At December 31, 2025 there was $24,944 of total unrecognized compensation expense related to non-vested restricted stock awards under the Plan. That cost is expected to be recognized over a weighted-average period of 2.18 years. The fair value of common stock awards is determined based on the closing trading price of the Company’s common stock on the grant date.
A summary of the Company’s employee and director stock grant activity is as follows:
| Restricted Stock Grants | Shares | Weighted-Average Grant-Date Fair Value | |||||||||
| Unreleased at December 31, 2022 | 208,060 | $ | 158.38 | ||||||||
| Granted | 98,263 | $ | 158.04 | ||||||||
| Released | (90,662) | $ | 147.21 | ||||||||
| Canceled | (10,084) | $ | 165.36 | ||||||||
| Unreleased at December 31, 2023 | 205,577 | $ | 162.81 | ||||||||
| Granted | 142,324 | $ | 147.87 | ||||||||
| Released | (93,453) | $ | 153.78 | ||||||||
| Canceled | (6,365) | $ | 155.37 | ||||||||
| Unreleased at December 31, 2024 | 248,083 | $ | 157.84 | ||||||||
| Granted | 153,788 | $ | 149.53 | ||||||||
| Released | (111,795) | $ | 156.27 | ||||||||
| Canceled | (10,862) | $ | 152.70 | ||||||||
| Unreleased at December 31, 2025 | 279,214 | $ | 154.09 | ||||||||
Performance-based Stock Units
The performance-based stock units (the “PSUs”) granted to executives represent the right to earn shares of the Company’s common stock. These awards have two financial performance components: (1) the Company’s core FFO performance (“FFO Target”), and (2) the Company’s total stockholder return relative to the performance of a defined group of peers (“TSR Target”). Each of these performance components are weighted 50% and are measured over the performance period, which is defined as the three-year period ending December 31 from the year of grant. At the end of the performance period, the financial performance components are reviewed to determine the number of shares actually granted to executives, which can be as low as zero shares and up to a maximum of 2.25 shares issued for each PSU. A summary of the PSU activity is as follows:
| Performance-Based Stock Units | Units | Weighted-Average Grant-Date Fair Value | ||||||||||||
| Unvested at December 31, 2022 | 147,159 | $ | 130.63 | |||||||||||
| Granted | 86,795 | $ | 207.28 | |||||||||||
| Released | (45,242) | $ | 162.18 | |||||||||||
| Unvested at December 31, 2023 | 188,712 | $ | 158.32 | |||||||||||
| Granted | 115,283 | $ | 161.82 | |||||||||||
| Released | (40,832) | $ | 143.36 | |||||||||||
| Unvested at December 31, 2024 | 263,163 | $ | 162.17 | |||||||||||
| Granted | 112,828 | $ | 164.94 | |||||||||||
| Released | (61,085) | $ | 152.56 | |||||||||||
| Unvested at December 31, 2025 | 314,906 | $ | 165.03 | |||||||||||
The Company recorded $14,418, $12,183 and $12,433 of expense in general and administrative expense in its statement of operations related to PSUs granted to executives for the years ended December 31, 2025, 2024 and 2023, respectively. The Company estimated the fair value of the PSUs as of the grant date, using the closing trading price of the Company’s common stock on the grant date to value the FFO Target portion. A Monte Carlo simulation model was used to calculate the fair value of the TSR Target portion of the PSUs, using the following assumptions:
| For the Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Intrinsic value | $41,007 | $39,369 | $30,256 | |||||||||||||||||
| Risk-free rate | 4.0% | 5.5% | 4.6% | |||||||||||||||||
| Volatility | 30.5% | 29.9% | 29.3% | |||||||||||||||||
| Expected term (in years) | 2.8 | 2.8 | 2.8 | |||||||||||||||||
| Dividend yield | —% | —% | —% | |||||||||||||||||
| Unrecognized compensation cost | $20,304 | $19,642 | $18,798 | |||||||||||||||||
| Term over which compensation cost recognized (in years) | 3 | 3 | 3 | |||||||||||||||||
Under the terms of the PSUs, dividends for the entire measurement period are paid in cash when the shares are released, therefore, a dividend yield of zero was used. The valuation model applied in this calculation utilizes subjective assumptions that could potentially change over time, including the probabilities associated with achieving the FFO Targets (categorized within Level 3 of the fair value hierarchy). Therefore, the amount of unrecognized compensation expense at December 31, 2025 noted above does not necessarily represent the expense that will ultimately be realized by the Company in the statement of operations.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 29, 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.