TechnipFMC plcFTI
TechnipFMC plc Stock Compensation Disclosure
SHARE-BASED COMPENSATION
On April 28, 2022, we adopted the TechnipFMC plc 2022 Incentive Award Plan (the “Plan”). Under the Plan, 8.9 million ordinary shares were authorized for awards, and the remaining available shares from the previous plan were added to the authorized amount under the Plan.
The exercise price for options is determined by the Committee but cannot be less than the fair market value of our ordinary shares at the grant date. For restricted share units issued on or after January 1, 2023, the vesting schedule of restricted share unit grants changed from a three-year cliff to a three-year ratable schedule, with grants vesting in three equal installments over three years on the anniversary of the grant date. Performance share unit grants generally vest after three years of service.
Under the Plan, our Board of Directors has the authority to grant non-employee directors share options, restricted shares, restricted share units, and performance shares. Unless otherwise determined by our Board of Directors, awards to non-employee directors generally vest one year from the date of grant. All restricted share units awarded prior to 2020 will be settled when a non-executive director ceases services on the Board of Directors. Beginning with the 2020 equity award, non-executive directors have the opportunity to elect the year in which they will take receipt of the equity grants from either (a) a period of to 10 years from the grant date or (b) upon their separation from Board service. The elections are made prior to the beginning of the grant year and are irrevocable after December 31 of the year prior to grant. Restricted share units are settled when a director ceases services to the Board of Directors. As of December 31, 2025, outstanding awards to active and retired non-employee directors included 50.8 thousand of restricted share units.
The measurement of share-based compensation expense on restricted share awards is based on the market price and fair value at the grant date and the number of shares awarded. The fair value of performance shares is estimated using a combination of the closing stock price on the grant date and the Monte Carlo simulation model. We use the Black-Scholes options pricing model to measure the fair value of stock options.
The share-based compensation expense for each award is recognized ratably over the applicable service period, or, for awards subject to retirement-eligibility provisions, over the period beginning at the start of the service period and ending when an employee becomes eligible for retirement (currently age 62 under the Plan), after taking into account estimated forfeitures. For awards where the grant terms specify that retirement eligibility does not affect vesting, this retirement provision does not apply.
We recognize compensation expense and the corresponding tax benefits for awards under the Plan. The compensation expense under the Plan was as follows:
| Year Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Share-based compensation expense | $ | 61.9 | $ | 58.3 | $ | 40.9 | |||||||||||
| Income tax benefits related to share-based compensation expense | $ | 5.8 | $ | 14.9 | $ | 9.0 | |||||||||||
As of December 31, 2025, the portion of share-based compensation expense related to outstanding awards to be recognized in future periods is as follows:
| December 31, 2025 | |||||
| Share-based compensation expense not yet recognized (in millions) | $ | 42.6 | |||
| Weighted-average recognition period (in years) | 0.8 | ||||
Restricted Share Units
A summary of the non-vested restricted share units’ activity is as follows:
| (Shares in thousands) | Shares | Weighted-Average Grant Date Fair Value | |||||||||
| Non-vested as of December 31, 2024 | 5,519.2 | $ | 12.25 | ||||||||
| Granted | 932.3 | 29.25 | |||||||||
| Vested | (3,548.3) | 10.32 | |||||||||
| Cancelled/forfeited | (157.5) | 15.06 | |||||||||
| Non-vested as of December 31, 2025 | 2,745.7 | $ | 20.35 | ||||||||
The weighted-average grant-date fair value of restricted stock share units granted during the years ended December 31, 2025, 2024, and 2023 was $29.25, $19.99 and $14.06, respectively.
Performance Share Units
Annually, the Board of Directors has granted certain employees and senior executives performance share units that vest subject to achieving satisfactory performance measures. The number of shares earned is determined at the end of each performance period based on the Company’s achievement of certain predefined targets as described in the underlying performance share unit agreement. In the event the Company exceeds the predefined target, shares for up to a maximum of 200% of the target award may be awarded. In the event the Company falls below the predefined target, a reduced number of shares may be awarded. If the Company falls below the threshold award performance level, no shares will be awarded. As of December 31, 2025, 6.5 million performance share units were outstanding assuming the achievement of 100% of target. For performance share units issued on or after January 1, 2022, performance is based on results of return on invested capital (“ROIC”) (50%) and total shareholder return (“TSR”) (50%).
In 2025, the Board granted one-time PSU awards under the shareholder approved Value Creation Plan “VCP” to certain executives with overall payout capped at 3.6 million PSUs.
The PSU awards granted in 2025 under the VCP are subject to the achievement of two key criteria.
The Company must first achieve and maintain an ROIC target for a four-consecutive quarter period (a “Performance Period”). If the ROIC target is achieved, PSUs will be earned only if a 12-month volume weighted average share price (“VWAP”) exceeds $35.00 during the same four-consecutive quarter period in which the ROIC target is attained. If the ROIC targets are not achieved in any four-consecutive quarter period within the four-year period ending December 31, 2028, then the entire award will be forfeited.
As the performance-based vesting condition was not probable as of the reporting date, no compensation cost has been recognized. However, the Company performed a Monte Carlo simulation to estimate the theoretical fair-value should the performance conditions be satisfied. The Monte Carlo simulation incorporated standard valuation inputs; expected volatility of 44.86%, risk free interest rate of 3.77% and an expected performance period of 3.69 years.
For the performance share units which vest based on TSR, the fair value of performance shares is estimated using a combination of the closing stock price on the grant date and the Monte Carlo simulation model. The weighted-average fair value and the assumptions used to measure the fair value of performance share units subject to performance-adjusted vesting conditions in the Monte Carlo simulation model were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Weighted-average fair value(a) | $ | 36.3 | $ | 29.1 | $ | 21.7 | |||||||||||
Expected volatility(b) | 42.02 | % | 48.10 | % | 69.40 | % | |||||||||||
Risk-free interest rate(c) | 4.17 | % | 4.38 | % | 4.44 | % | |||||||||||
Expected performance period in years(d) | 3.0 | 3.0 | 3.0 | ||||||||||||||
(a) The weighted-average fair value was based on performance share units granted during the period.
(b) Expected volatility is based on normalized historical volatility of our shares over a preceding period commensurate with the expected term of the performance share units.
(c) The risk-free rate for the expected term of the performance share units is based on the U.S. Treasury yield curve in effect at the time of grant.
(d) For awards subject to service-based vesting, the expected term was estimated using a simplified method for all awards granted in 2025, 2024, and 2023.
A summary of the non-vested performance share units’ activity is as follows:
| (Shares in thousands) | Shares | Weighted-Average Grant Date Fair Value | |||||||||
| Non-vested as of December 31, 2024 | 4,336.6 | $ | 15.00 | ||||||||
| Granted | 4,270.9 | 17.73 | |||||||||
| Adjustments for performance achieved | 2,034.3 | 9.61 | |||||||||
| Vested | (4,068.6) | 9.61 | |||||||||
| Cancelled/forfeited | (105.4) | 19.94 | |||||||||
| Non-vested as of December 31, 2025 | 6,467.8 | $ | 18.42 | ||||||||
The weighted-average grant-date fair value of performance share units granted during the years ended December 31, 2025, 2024, and 2023 was $17.73, $24.39 and $17.86
Share Option Awards
The fair value of each share option award is estimated as of the date of grant using the Black-Scholes options pricing model.
Share options outstanding are time-based awards vesting over three years. There were no share options granted in 2025, 2024 and 2023.
The following is a summary of share option transactions during the year ended December 31, 2025:
| (Shares in thousands) | Number of Shares | Weighted average exercise price | Weighted average remaining life (in years) | ||||||||||||||
| Balance as of December 31, 2024 | 1,192.4 | $ | 19.82 | 3.3 | |||||||||||||
| Exercised | (131.9) | 20.85 | |||||||||||||||
| Balance as of December 31, 2025 | 1,060.5 | $ | 19.69 | 2.3 | |||||||||||||
| Exercisable as of December 31, 2025 | 1,060.5 | $ | 19.69 | 2.3 | |||||||||||||
The aggregate intrinsic value of stock options outstanding and stock options exercisable as of December 31, 2025 and December 31, 2024 was $24.9 million and $9.1 million respectively.
Cash received from the share option exercises was $3.7 million, $32.2 million and $1.1 million during each of the years ended December 31, 2025, 2024, and 2023, respectively. The total intrinsic value of share options exercised during each of the years ended December 31, 2025, 2024, and 2023 was $0.9 million, $2.1 million and $0.3 million. To exercise share options, an employee may choose (1) to pay, either directly or by way of the group savings plan, the share option strike price to obtain shares, or (2) to sell the shares immediately after having exercised the share option (in this case, the employee does not pay the strike price but instead receives the intrinsic value of the share options in cash).
The following summarizes significant ranges of outstanding and exercisable share options as of December 31, 2025:
| Options Outstanding and Exercisable | |||||||||||||||||
| Exercise Price Range | Number of options (in thousands) | Weighted average remaining life (in years) | Weighted average exercise price | ||||||||||||||
$16.00-$19.00 | 477.2 | 3.2 | $ | 16.46 | |||||||||||||
$20.00-$24.00 | 555.3 | 1.6 | 22.18 | ||||||||||||||
$25.00-$26.00 | 28.0 | 2.5 | 25.24 | ||||||||||||||
| Total | 1,060.5 | 2.3 | $ | 19.69 | |||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 5, 2021 | |
| 2019 | Mar 3, 2020 | |
| 2018 | Mar 11, 2019 | |
| 2017 | Apr 2, 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.