Five Point Holdings, LLCFPH
Five Point Holdings, LLC Stock Compensation Disclosure
SHARE-BASED COMPENSATION
In April 2023, the Company’s Board of Directors approved the Five Point Holdings, LLC 2023 Incentive Award Plan (the “Incentive Award Plan”) as the successor to the Five Point Holdings, LLC Amended and Restated 2016 Incentive Award Plan (the
“Prior Plan”). The Incentive Award Plan became effective on June 7, 2023, the date on which it was approved by shareholders at the 2023 Annual Meeting of Shareholders. The Incentive Award Plan increased the aggregate number of common shares available for issuance under the Prior Plan by 7,500,000 Class A common shares of the Holding Company.
As of December 31, 2025, there were 1,439,767 remaining Class A common shares available for future issuance under the Incentive Award Plan.
The Incentive Award Plan provides for the grant of share options, restricted shares, restricted share units, performance awards (which include, but are not limited to, cash bonuses), distribution equivalent awards, deferred share awards, share payment awards, share appreciation rights, other incentive awards (which include, but are not limited to, LTIP Unit awards (as defined in the Incentive Award Plan) and performance share awards. Employees and consultants of the Company and its subsidiaries and affiliates, as well as non-employee members of the Company’s Board of Directors, are eligible to receive awards under the Incentive Award Plan.
Under the Incentive Award Plan, the Company has granted restricted share units (“RSUs”) and restricted share awards either fully vested, with service conditions or with service and performance or market performance conditions. Awards with a service condition generally vest over a two-year or three-year period or in the case of non-employee directors over one year. Awards with a service and market performance condition generally vest at the end of a three-year period if the market condition was achieved at the end of the service period. Awards with a service and performance condition generally vest at the end of a or three-year service period if the performance condition was achieved during the service period. Restricted share awards entitle the holders to non-forfeitable distributions and to vote the underlying Class A common share during the restricted period.
The Company estimates the fair value of restricted share awards with a service or performance condition based on the closing market price of the Company’s Class A common shares on the award’s grant date. The grant date fair value of awards with a market condition are determined using a Monte-Carlo valuation model. The Monte Carlo model is based on random projections of share price paths and must be repeated numerous times to achieve a probabilistic assessment. The model incorporates assumptions related to the expected volatility of our share price and risk free interest rates. Awards with a three-year vesting period and five-year performance period were granted during the year ended December 31, 2025. Expected volatility was 51.78% and 47.37%, respectively, and was calculated based on the historical volatility of the Company’s common stock using daily share price returns over a three-year and five-year lookback period from the date of grant, respectively, and the risk-free interest rate was 3.64% and 3.63%, respectively, and was based on U.S. Treasury yield curve rates with maturities consistent with the three-year vesting period and five-year performance period, respectively. For awards granted during the year ended December 31, 2024, expected volatility was 46.78% and was calculated based on the historical volatility of the Company’s common stock using daily share price returns over a three-year lookback period from the date of grant, and the risk-free interest rate was 4.15% and was based on U.S. Treasury yield curve rates with maturities consistent with the three-year vesting period.
During the years ended December 31, 2025, 2024 and 2023, the Company reacquired vested RSUs and restricted share awards from employees for $2.4 million, $0.8 million and $0.2 million, respectively, for the purpose of settling tax withholding obligations. The reacquisition cost is based on the fair value of the Company’s Class A common shares on the date the tax obligation is incurred.
The following table summarizes share-based equity compensation activity for the years ended December 31, 2025, 2024 and 2023:
| Share-Based Awards (in thousands) | Weighted- Average Grant Date Fair Value | ||||||||||
| Nonvested at January 1, 2023 | 2,166 | $ | 3.77 | ||||||||
Granted | 3,947 | $ | 1.92 | ||||||||
| Cancelled | (906) | $ | 2.16 | ||||||||
Forfeited | — | $ | — | ||||||||
Vested | (798) | $ | 5.50 | ||||||||
| Nonvested at December 31, 2023 | 4,409 | $ | 2.13 | ||||||||
Granted | 2,884 | $ | 2.58 | ||||||||
Forfeited | — | $ | — | ||||||||
Vested | (890) | $ | 4.57 | ||||||||
| Nonvested at December 31, 2024 | 6,403 | $ | 2.00 | ||||||||
Granted | 4,404 | $ | 3.08 | ||||||||
Forfeited | (1,146) | $ | 1.16 | ||||||||
Vested | (1,047) | $ | 3.14 | ||||||||
| Nonvested at December 31, 2025 | 8,614 | $ | 2.52 | ||||||||
Share-based compensation expense was $7.6 million, $4.3 million and $3.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. Share-based compensation expense is included in selling, general, and administrative expenses on the accompanying consolidated statements of operations.
Approximately $11.9 million of total unrecognized compensation cost related to non-vested awards is expected to be recognized over a weighted-average period of 1.9 years from December 31, 2025. The estimated fair value at vesting of share-based awards that vested during the years ended December 31, 2025, 2024 and 2023 was $5.8 million, $2.7 million, and $2.0 million, respectively. Awards forfeited in 2025 represent awards with a market performance condition that were forfeited for no consideration as the threshold vesting condition was not achieved.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 6, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Mar 4, 2024 | |
| 2022 | Mar 6, 2023 | |
| 2021 | Mar 11, 2022 | |
| 2020 | Mar 10, 2021 | |
| 2019 | Mar 13, 2020 | |
| 2018 | Mar 14, 2019 | |
| 2017 | Mar 30, 2018 | |
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.