FOX FACTORY HOLDING CORPFOXF
FOX FACTORY HOLDING CORP Stock Compensation Disclosure
Stockholders’ Equity
Share Repurchase Plan
There were no repurchases of common stock during the fiscal year ended January 2, 2026. During the fiscal year January 3, 2025, the Company repurchased approximately 378 shares for $25,000, at an average price of $66.03. All repurchased shares were immediately retired. The aggregate cost of share repurchases and average price paid per share exclude 1% excise tax on share repurchases imposed as part of the Inflation Reduction Act of 2022. Common stock was reduced by the number of shares retired at $0.001 par value per share. The excess purchase price over par value was allocated between additional paid-in capital and retained earnings.
Equity Incentive Plan
The Company has outstanding awards under 2022 Omnibus Plan (the “2022 Plan”). Under the 2022 Plan, the Company has the ability to issue incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, RSUs, performance units and/or performance shares.
The 2022 Plan is administered by the Compensation Committee of the Board of Directors of the Company, which has the authority to determine the type of incentive award, as well as the terms and conditions of the awards. Options granted under the 2022 Plan have vesting periods ranging from to 10 years and expire no later than 10 years from the date of grant. As of January 2, 2026, there were no outstanding options. RSUs generally vest over a to four-year period with equal annual installments beginning at the end of one year and the remaining vesting annually thereafter. In addition to time-based vesting criteria, certain of our RSUs include performance-based vesting criteria. As of January 2, 2026, there were 2,094 shares available for issuance under the 2022 Plan. The Company generally issues new shares in connection with awards under its equity incentive plans.
Stock-Based Compensation
Compensation expense related to the Company’s share-based awards for the fiscal years ended January 2, 2026, January 3, 2025, and December 29, 2023 was $14,266, $9,606, and $16,465, respectively, all of which related to RSUs and performance share units (“PSUs”). No compensation expense related to stock options was incurred during the fiscal years ended January 2, 2026, January 3, 2025, and December 29, 2023.
The following table summarizes the allocation of stock-based compensation in the accompanying consolidated statements of operations:
| For the fiscal years ended | |||||||||||||||||
| January 2, 2026 | January 3, 2025 | December 29, 2023 | |||||||||||||||
| Cost of sales | $ | 1,122 | $ | 1,124 | $ | 1,179 | |||||||||||
| General and administrative | 10,186 | 5,981 | 12,610 | ||||||||||||||
| Sales and marketing | 1,509 | 1,303 | 1,501 | ||||||||||||||
| Research and development | 1,449 | 1,198 | 1,175 | ||||||||||||||
| Total | $ | 14,266 | $ | 9,606 | $ | 16,465 | |||||||||||
Stock-based compensation expense capitalized to inventory was not material for the years ended January 2, 2026, January 3, 2025, and December 29, 2023.
Restricted Stock Units
The Company grants both time-based and performance-based stock awards, which also include a time-based vesting feature. Compensation expense for time-based stock awards is measured at the grant date based on the closing market price of the Company’s common stock and recognized ratably over the vesting period.
For performance-based stock awards, compensation expense is measured based on estimates of the number of shares ultimately expected to vest at each reporting date based on management’s expectations regarding the relevant performance criteria. The recognition of compensation expense associated with performance-based stock awards requires defined criteria for assessing achievement and judgment in assessing the probability of meeting the performance goals.
The following table summarizes RSU activity:
| Unvested RSUs | |||||||||||
| Number of shares outstanding | Weighted-average grant date fair value | ||||||||||
| Unvested at December 30, 2022 | 297 | $ | 87.05 | ||||||||
| Granted | 135 | $ | 109.23 | ||||||||
| Canceled | (44) | $ | 90.91 | ||||||||
| Vested | (141) | $ | 83.97 | ||||||||
| Unvested at December 29, 2023 | 247 | $ | 100.21 | ||||||||
| Granted | 333 | $ | 45.82 | ||||||||
| Canceled | (43) | $ | 71.30 | ||||||||
| Vested | (137) | $ | 94.76 | ||||||||
| Unvested at January 3, 2025 | 400 | $ | 59.88 | ||||||||
| Granted | 572 | $ | 25.87 | ||||||||
| Canceled | (51) | $ | 38.43 | ||||||||
| Vested | (175) | $ | 65.90 | ||||||||
| Unvested at January 2, 2026 | 746 | $ | 33.95 | ||||||||
The fair value of vested RSUs was $3,901, $5,837, and $15,516 for the years ended January 2, 2026, January 3, 2025, and December 29, 2023, respectively. As of January 2, 2026, the Company had approximately $15,721 of unrecognized stock-based compensation expense related to RSUs, which will be recognized over the remaining weighted-average vesting period of approximately 1.75 years.
Performance Stock Units
During the year ended January 2, 2026, the Company issued PSUs to certain executives that represent shares potentially issuable in the future. Issuance is based upon the Company’s performance, over a three-year performance period, on certain measures including EBITDA margin. The PSUs vest only upon the achievement of the applicable performance goals for the performance period, and, depending on the actual achievement on the performance goals, the grantee may earn between 0% and 200% of the target PSUs. The fair value of PSUs is calculated based on the stock price on the date of grant.
The following table summarizes the activity for the Company’s unvested PSUs for the year ended January 2, 2026:
| Unvested PSUs | |||||||||||
| Number of shares outstanding | Weighted-average grant date fair value | ||||||||||
| Unvested at December 30, 2022 | 48 | $ | 126.69 | ||||||||
| Granted | 45 | $ | 114.04 | ||||||||
| Canceled | (10) | $ | 120.08 | ||||||||
| Vested | (13) | $ | 141.57 | ||||||||
| Unvested at December 29, 2023 | 70 | $ | 116.54 | ||||||||
| Granted | 232 | $ | 46.38 | ||||||||
| Canceled | (26) | $ | 52.30 | ||||||||
| Vested | (30) | $ | 118.09 | ||||||||
| Unvested at January 3, 2025 | 246 | $ | 57.00 | ||||||||
| Granted | 262 | $ | 26.14 | ||||||||
| Canceled | (6) | $ | 40.65 | ||||||||
| Vested | (38) | $ | 115.16 | ||||||||
| Unvested at January 2, 2026 | 464 | $ | 35.03 | ||||||||
The stock-based compensation expense recognized each period is dependent upon our estimate of the number of shares that will ultimately vest based on the achievement of certain performance conditions. Future stock-based compensation expense for unvested performance-based awards could reach a maximum of $17,134 assuming achievement at the maximum level. The unrecognized stock-based compensation expense is expected to be recognized over a weighted average period of 1.63 years.
Stock Options
There was no stock option activity during the years ended January 2, 2026, January 3, 2025, and December 29, 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.