FIGS, Inc.FIGS
FIGS, Inc. Stock Compensation Disclosure
STOCK-BASED COMPENSATION
Amended 2016 Equity Incentive Plan
In 2016, the Company adopted the 2016 Equity Incentive Plan (as amended, the “2016 Plan”). The 2016 Plan provided for the issuance of restricted stock awards (“RSAs”), RSUs, stock appreciation rights (“SARs”), incentive stock options, non-qualified stock options and other stock-based awards to employees and consultants of the Company and its affiliates and members of the Board of Directors of the Company (the “Board”). Prior to its termination, the number of shares of Class A common stock authorized for issuance under the 2016 Plan was 51,716,934. Only incentive stock options, non-qualified stock options and RSUs were granted under the 2016 Plan.
On May 18, 2021, the Board approved the termination of the 2016 Plan. Any remaining shares of common stock available for issuance under the 2016 Plan as of such date were added to the shares of our Class A common stock reserved for issuance under the Company’s 2021 Equity Incentive Award Plan (the “2021 Plan”). Additionally, any shares of common stock subject to awards granted under the 2016 Plan that expire, lapse or are terminated, exchanged for or settled in cash, surrendered, repurchased, canceled without having been fully exercised, or forfeited following the effective date of the 2021 Plan will become available for issuance under the 2021 Plan.
2021 Equity Incentive Award Plan and 2021 Employee Stock Purchase Plan
On May 18, 2021, the Board adopted and the stockholders of the Company approved the 2021 Plan and the 2021 Employee Stock Purchase Plan (the “ESPP”).
The number of shares reserved for issuance under the 2021 Plan increases automatically on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (A) a number of shares of Class A common stock such that the aggregate number of Shares available for grant under the 2021 Plan immediately following such increase shall equal 5% of the aggregate number of shares of Class A common stock and Class B common stock outstanding on the final day of the immediately preceding calendar year, and (B) such lesser number of shares of Class A common stock as determined by our Board. The 2021 Plan authorizes the granting of RSAs, RSUs, SARs, incentive stock options, non-qualified stock options, dividend equivalents, and other stock or cash awards to employees and consultants of the Company and its subsidiaries and members of the Board.
The number of shares of the Company’s Class A common stock that will be available for issuance and sale to eligible employees under the ESPP increases automatically on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (A) 1% of the shares of Class A common stock and Class B common stock outstanding as of the last day of the immediately preceding fiscal year and (B) such lesser number of shares of Class A common stock as determined by our Board. The ESPP permits eligible employees to purchase shares of the Company’s Class A common stock at a purchase price per share equal to 85% of the lesser of (i) the fair market value of the Company’s Class A common stock on the first trading day of an applicable offering period or (ii) the last trading day of a purchase period in an applicable offering period.
All options and SARs granted under the 2021 Plan will generally expire ten years from the date of grant if not exercised. In the event of a termination of employment, any unvested portion of an option will generally be forfeited immediately. Any vested options may generally be exercised within three months, except for (i) instances of termination due to death or disability whereby any vested options may be exercised within one year and (ii) instances of termination “with cause” whereby any vested options are forfeited immediately.
Shares that expire, lapse or are terminated, exchanged for or settled in cash, surrendered, repurchased, canceled without having been fully exercised, or forfeited will become available for future awards under the 2021 Plan. In addition, shares of Class A common stock that are tendered to the Company by a participant to satisfy the applicable exercise or purchase price of an award and/or to satisfy any applicable tax withholding obligation with respect to an award will be added to the number of shares of Class A common stock available for future awards. Additionally, any shares of Class A common stock subject to awards granted under the 2016 Plan that expire, lapse or are terminated, exchanged for or settled in cash, surrendered, repurchased, canceled without having been fully exercised, or forfeited following the effective date of the 2021 Plan will become available for issuance under the 2021 Plan. The 2021 Plan is administered by the Board with respect to awards to non-employee directors and by the Compensation Committee of the Board with respect to other participants.
As of December 31, 2025, the number of shares available for issuance under the 2021 Plan and ESPP were 6,229,832 and 3,034,713, respectively.
Stock Option Valuation
The assumptions that the Company used to determine the grant date fair value of stock options granted were as follows, presented on a weighted-average basis:
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk free interest rate | 4.1 | % | 4.0 | % | 3.6 | % | |||||||||||
| Expected volatility | 43 | % | 41 | % | 40 | % | |||||||||||
| Expected dividend yield | 0 | % | 0 | % | 0 | % | |||||||||||
| Expected term (in years) | 5.50 | 6.25 | 6.25 | ||||||||||||||
A summary of stock option activity under the 2016 Plan and 2021 Plan, is as follows:
| Stock Options Outstanding | |||||||||||||||||||||||
Number of Shares | Weighted Average Exercise Price (per share) | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in millions) | ||||||||||||||||||||
| Outstanding at December 31, 2024 | 39,636,645 | $ | 5.45 | 5.21 | $ | 81 | |||||||||||||||||
| Granted | 5,441,251 | 6.21 | |||||||||||||||||||||
| Exercised | (258,017) | 5.66 | |||||||||||||||||||||
| Forfeited | (7,027,934) | 13.34 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 37,791,945 | $ | 4.09 | 4.34 | $ | 275 | |||||||||||||||||
| Exercisable at December 31, 2025 | 33,312,136 | $ | 3.76 | 4.06 | $ | 253 | |||||||||||||||||
During the year ended December 31, 2025, the Company repriced, on a one-for-one basis, certain fully vested outstanding stock options to purchase shares of the Company’s Class A common stock (the “Repricings”). The Repricings were accounted for as modifications under ASC 718 and the resulting incremental stock-based compensation expense was not material for the year ended December 31, 2025.
The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s Class A common stock for those stock options that had exercise prices lower than the fair value of the Class A common stock as of the end of the period. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2025, 2024, and 2023 was $0.5 million, $0.6 million, and $5.6 million, respectively.
The weighted-average grant date fair values per share of the Company’s stock options granted during the years ended December 31, 2025, 2024, and 2023 was $0.77, $2.89, and $3.35, respectively. The grant date fair value of stock
options vested during the years ended December 31, 2025, 2024 and 2023 was $7.9 million, $22.5 million, and $27.3 million, respectively.
As of December 31, 2025, total unrecognized compensation cost related to unvested stock option awards was $3.7 million, to be recognized over a weighted-average period of 2.7 years.
Restricted Stock Units
The fair value of RSUs that vested during the years ended December 31, 2025, 2024, and 2023 were $27.5 million, $9.2 million, and $17.4 million respectively.
As of December 31, 2025, total unrecognized compensation cost related to unvested RSUs was $38.5 million, to be recognized over a weighted-average period of 2.6 years.
A summary of RSU activity under the 2016 Plan and 2021 Plan is as follows:
Number of Shares | Weighted average grant date fair value per share | ||||||||||
| Unvested restricted stock units at December 31, 2024 | 8,163,662 | $ | 5.11 | ||||||||
| Granted | 4,434,067 | 5.57 | |||||||||
| Vested | (3,795,698) | 4.54 | |||||||||
| Forfeited | (962,126) | 6.36 | |||||||||
| Unvested restricted stock units at December 31, 2025 | 7,839,905 | $ | 5.49 | ||||||||
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.