Genpact LTDG
Genpact LTD Stock Compensation Disclosure
Stock-based compensation
The Company has granted stock-based awards under the Genpact Limited 2007 Omnibus Incentive Compensation Plan (the “2007 Omnibus Plan”) and the Genpact Limited 2017 Omnibus Incentive Compensation Plan (the “2017 Omnibus Plan”) to eligible persons, including employees, directors and certain other persons associated with the Company.
A brief summary of each plan is provided below:
2007 Omnibus Plan
The Company adopted the 2007 Omnibus Plan on July 13, 2007 and amended and restated it on April 11, 2012. The 2007 Omnibus Plan provided for the grant of awards intended to qualify as incentive stock options, non-qualified stock options, share appreciation rights, restricted share awards, restricted share units ("RSUs"), PUs, cash incentive awards and other equity-based or equity-related awards. Under the 2007 Omnibus Plan, the Company was authorized to grant awards for the issuance of up to a total of 23,858,823 common shares.
2017 Omnibus Plan
On May 9, 2017, the Company’s shareholders approved the adoption of the 2017 Omnibus Plan, pursuant to which 15,000,000 Company common shares are available for issuance. The 2017 Omnibus Plan was amended and restated on April 5, 2019 and April 5, 2022 to increase the number of common shares authorized for issuance by 8,000,000 shares to 23,000,000 shares and by 3,500,000 shares to 26,500,000 shares, respectively. No grants may be made under the 2007 Omnibus Plan after the date of adoption of the 2017 Omnibus Plan. Grants that were outstanding under the 2007 Omnibus Plan as of the date of the Company’s adoption of the 2017 Omnibus Plan, remain subject to the terms of the 2007 Omnibus Plan.
Stock-based compensation costs relating to the foregoing plans during the years ended December 31, 2023, 2024 and 2025 were $87,108, $65,318 and $88,650, respectively, and have been allocated to cost of revenue and selling, general, and administrative expenses.
Income tax benefits recognized in relation to stock-based compensation costs, including options, RSUs and PUs, including excess tax benefits, during the years ended December 31, 2023, 2024 and 2025 were $19,312, $8,997 and $16,487, respectively.
Stock options
All options granted under the 2007 and 2017 Omnibus Plans are exercisable into common shares of the Company, have a contractual period of ten years and vest over to five years unless otherwise specified in the applicable award agreement. The compensation expense is recognized on a straight-line basis over the vesting term.
The compensation cost is determined at the date of grant by estimating the fair value of an option using the Black-Scholes option-pricing model. No options were granted in 2023, 2024 and 2025.
The Company has issued, and intends to continue to issue, new common shares upon stock option exercises and the vesting of share awards under its equity-based incentive compensation plans.
17. Stock-based compensation (Continued)
A summary of stock option activity during the years ended December 31, 2023, 2024 and 2025 is set out below:
| Year ended December 31, 2023 | |||||||||||||||||||||||
| Shares arising out of options | Weighted average exercise price | Weighted average remaining contractual life (years) | Aggregate intrinsic value | ||||||||||||||||||||
| Outstanding as of January 1, 2023 | 7,748,114 | 33.27 | 5.6 | — | |||||||||||||||||||
| Granted | — | — | — | — | |||||||||||||||||||
| Forfeited | (319,646) | 41.06 | — | — | |||||||||||||||||||
| Expired | (53,990) | 43.94 | — | — | |||||||||||||||||||
| Exercised | (1,376,330) | 20.17 | — | 29,255 | |||||||||||||||||||
| Outstanding as of December 31, 2023 | 5,998,148 | 35.77 | 5.5 | $ | 19,341 | ||||||||||||||||||
| Vested as of December 31, 2023 and expected to vest thereafter (Note a) | 5,784,672 | 35.38 | 5.5 | $ | 19,332 | ||||||||||||||||||
| Vested and exercisable as of December 31, 2023 | 3,161,392 | 30.42 | 4.3 | $ | 15,069 | ||||||||||||||||||
| Weighted average grant-date fair value of options granted during the period | — | ||||||||||||||||||||||
| Year ended December 31, 2024 | |||||||||||||||||||||||
| Shares arising out of options | Weighted average exercise price | Weighted average remaining contractual life (years) | Aggregate intrinsic value | ||||||||||||||||||||
| Outstanding as of January 1, 2024 | 5,998,148 | $ | 35.77 | 5.5 | $ | — | |||||||||||||||||
| Granted | — | — | — | — | |||||||||||||||||||
| Forfeited | (226,691) | 45.13 | — | — | |||||||||||||||||||
| Expired | (183,810) | 45.19 | — | — | |||||||||||||||||||
| Exercised | (240,091) | 30.01 | — | 3,149 | |||||||||||||||||||
| Outstanding as of December 31, 2024 | 5,347,556 | $ | 35.31 | 4.4 | $ | 47,372 | |||||||||||||||||
| Vested as of December 31, 2024 and expected to vest thereafter (Note a) | 5,262,942 | $ | 35.12 | 4.4 | $ | 47,335 | |||||||||||||||||
| Vested and exercisable as of December 31, 2024 | 4,216,796 | $ | 32.35 | 3.9 | $ | 46,650 | |||||||||||||||||
| Weighted average grant-date fair value of options granted during the period | — | ||||||||||||||||||||||
| Year Ended December 31, 2025 | |||||||||||||||||||||||
| Shares arising out of options | Weighted average exercise price | Weighted average remaining contractual life (years) | Aggregate intrinsic value | ||||||||||||||||||||
| Outstanding as of January 1, 2025 | 5,347,556 | $ | 35.31 | 4.4 | $ | — | |||||||||||||||||
| Granted | — | — | — | — | |||||||||||||||||||
| Forfeited | (75,040) | 44.90 | — | — | |||||||||||||||||||
| Expired | — | — | — | — | |||||||||||||||||||
| Exercised | (235,974) | 34.49 | — | 2,899 | |||||||||||||||||||
| Outstanding as of December 31, 2025 | 5,036,542 | $ | 35.20 | 3.4 | $ | 61,095 | |||||||||||||||||
| Vested as of December 31, 2025 and expected to vest thereafter (Note a) | 5,020,702 | $ | 35.15 | 3.4 | $ | 61,091 | |||||||||||||||||
| Vested and exercisable as of December 31, 2025 | 4,230,132 | $ | 33.18 | 3.0 | $ | 58,912 | |||||||||||||||||
| Weighted average grant-date fair value of options granted during the period | — | ||||||||||||||||||||||
(a) Options expected to vest after considering an estimated forfeiture rate.
17. Stock-based compensation (Continued)
Cash received by the Company upon the exercise of stock options during the years ended December 31, 2023, 2024 and 2025 amounted to $27,755, $7,205 and $8,140, respectively. Income tax benefits from the exercise of stock options during the years ended December 31, 2023, 2024 and 2025 were $6,631, $423 and $479 (including excess tax benefits of $3,453, $110 and $245), respectively.
As of December 31, 2025, the total remaining unrecognized stock-based compensation cost for options expected to vest amounted to $1,197, which will be recognized over the weighted average remaining requisite vesting period of 0.9 years.
Restricted Share Units
The Company has granted RSUs under the 2007 and 2017 Omnibus Plans. Each RSU represents the right to receive one common share. The fair value of each RSU is the market price of one common share of the Company on the date of grant. The RSUs granted to date have graded vesting schedules of three months to four years. The compensation expense is recognized on a straight-line basis over the vesting term.
A summary of RSU activity during the years ended December 31, 2023, 2024 and 2025 is set out below:
| Year ended December 31, 2023 | |||||||||||
| Number of Restricted Share Units | Weighted Average Grant Date Fair Value | ||||||||||
| Outstanding as of January 1, 2023 | 579,622 | $ | 42.97 | ||||||||
| Granted | 1,047,905 | 42.77 | |||||||||
| Vested (Note b) | (510,057) | 42.77 | |||||||||
| Forfeited | (80,854) | 42.96 | |||||||||
| Outstanding as of December 31, 2023 | 1,036,616 | $ | 42.87 | ||||||||
| Expected to vest (Note a) | 953,972 | ||||||||||
| Year ended December 31, 2024 | |||||||||||
| Number of Restricted Share Units | Weighted Average Grant Date Fair Value | ||||||||||
| Outstanding as of January 1, 2024 | 1,036,616 | $ | 42.87 | ||||||||
| Granted | 1,881,223 | 34.57 | |||||||||
| Vested (Note c) | (530,464) | 40.01 | |||||||||
| Forfeited | (253,106) | 39.13 | |||||||||
| Outstanding as of December 31, 2024 | 2,134,269 | $ | 36.71 | ||||||||
| Expected to vest (Note a) | 1,972,934 | ||||||||||
| Year ended December 31, 2025 | |||||||||||
| Number of Restricted Share Units | Weighted Average Grant Date Fair Value | ||||||||||
| Outstanding as of January 1, 2025 | 2,134,269 | $ | 36.71 | ||||||||
| Granted | 1,339,281 | 47.58 | |||||||||
| Vested (Note d) | (942,725) | 37.79 | |||||||||
| Forfeited | (228,489) | 39.72 | |||||||||
| Outstanding as of December 31, 2025 | 2,302,336 | $ | 42.29 | ||||||||
| Expected to vest (Note a) | 2,145,220 | ||||||||||
17. Stock-based compensation (Continued)
(a)RSUs expected to vest after considering an estimated forfeiture rate.
(b)453,761 RSUs that vested during the year were net settled upon vesting by issuing 296,656 shares (net of minimum statutory tax withholding). 9,103 RSUs vested in the year ended December 31, 2023, in respect of which 4,983 shares were issued during 2024 after withholding shares to the extent of minimum statutory withholding taxes. 47,193 RSUs vested in the year ended December 31, 2023, in respect of which 46,982 shares were issued in 2025 after withholding shares to the extent of minimum statutory withholding taxes.
(c)443,718 RSUs that vested during the year were net settled upon vesting by issuing 293,000 shares (net of minimum statutory tax withholding). 22,551 RSUs vested in the year ended December 31, 2024, in respect of which 13,626 were issued in 2025 after withholding shares to the extent of minimum statutory withholding taxes. 64,195 RSUs vested in the year ended December 31, 2024, shares in respect of which will be issued in 2026 after withholding shares to the extent of minimum statutory withholding taxes.
(d)892,189 RSUs that vested during the year were net settled upon vesting by issuing 550,442 shares (net of minimum statutory tax withholding). 50,536 RSUs that vested in the year ended December 31, 2025 will be issued in 2026 after withholding shares to the extent of minimum statutory withholding taxes.
As of December 31, 2025, the total remaining unrecognized stock-based compensation cost related to RSUs amounted to $52,495, which will be recognized over the weighted average remaining requisite vesting period of 2.0 years.
Performance Units
The Company also grants stock awards in the form of PUs, and has granted PUs under both the 2007 and 2017 Omnibus Plans.
Each PU represents the right to receive one common share at a future date based on the Company’s performance against specified targets. PUs granted to date have vesting schedules of approximately six months to three years. PUs granted under the plans are subject to cliff vesting. The compensation expense for such awards is recognized on a straight-line basis over the vesting terms.
For PUs granted prior to 2023, the fair value of each PU was the market price of one common share of the Company on the date of grant and the performance period for such grants was one year. For PUs that have a performance period of one year, the Company’s estimate of the number of shares to be issued is adjusted upward or downward based upon the probability of achievement of the performance targets. The ultimate number of shares issued and the related compensation cost recognized is based on a comparison of the final performance metrics to the specified targets.
For PUs granted annually beginning in 2023, the performance period of the awards increased to three years from one year. The number of PUs that will ultimately vest will be determined, subject to certain conditions and limitations, based on the Company’s achievement of the performance targets set forth in the awards as well as its total shareholder return ("TSR") relative to the TSR of the companies included as of the beginning of the performance period in the S&P 400 Midcap Index (the “Peer Group”) over the three-year performance period.
The grant date fair value for PUs granted in 2023, 2024 and 2025 is determined using a Monte Carlo simulation model. This model simulates a range of possible future share prices and estimates the probabilities of the potential payouts. This model also incorporates the following assumptions:
•The historical volatility for the companies in the Peer Group was measured using the most recent three-year period.
•The risk-free interest rate is based on the U.S. Treasury rate assumption commensurate with the three-year performance period.
•For determining the TSR of the Company and the companies in the Peer Group, dividends are assumed to have been reinvested in the stock of the issuing entities on a continuous basis.
•The correlation coefficients used to model the way in which each entity tends to move in relation to each other are based upon the price data used to calculate historical volatility.
17. Stock-based compensation (Continued)
The fair value of each PU granted in 2023, 2024 and 2025 was estimated on the date of grant using the following valuation assumptions:
| Year ended December 31, 2023 | Year ended December 31, 2024 | Year ended December 31, 2025 | |||||||||||||||||||||||||||
| Dividend yield | 1.22 | % | — | 1.52 | % | 1.62 | % | — | 1.81 | % | 1.37 | % | |||||||||||||||||
| Expected life (years) | 2.54 | — | 2.80 | 2.38 | — | 2.80 | 2.81 | ||||||||||||||||||||||
| Risk-free rate of interest for expected life | 3.80 | % | — | 4.44 | % | 3.83 | % | — | 4.37 | % | 3.89 | % | |||||||||||||||||
| Volatility | 24.03 | % | — | 24.71 | % | 24.24 | % | — | 26.33 | % | 25.78 | % | |||||||||||||||||
A summary of PU activity during the years ended December 31, 2023, 2024 and 2025 is set out below:
| Year ended December 31, 2023 | |||||||||||||||||
| Number of Performance Units | Weighted Average Grant Date Fair Value | Maximum Shares Eligible to Receive | |||||||||||||||
| Outstanding as of January 1, 2023 | 3,570,951 | $ | 44.07 | 3,570,951 | |||||||||||||
| Granted | 986,891 | 43.99 | 2,368,538 | ||||||||||||||
| Vested (Note b) | (647,549) | 42.53 | (647,549) | ||||||||||||||
| Forfeited | (357,362) | 44.19 | (411,551) | ||||||||||||||
| Adjustment upon final determination of level of performance goal achievement (Note c) | 96,668 | 44.50 | 96,668 | ||||||||||||||
| Outstanding as of December 31, 2023 | 3,649,599 | $ | 44.32 | 4,977,057 | |||||||||||||
| Expected to vest (Note a) | 3,282,005 | ||||||||||||||||
| Year ended December 31, 2024 | |||||||||||||||||
| Number of Performance Units | Weighted Average Grant Date Fair Value | Maximum Shares Eligible to Receive | |||||||||||||||
| Outstanding as of January 1, 2024 | 3,649,599 | $ | 44.32 | 4,977,057 | |||||||||||||
| Granted | 1,381,610 | 32.64 | 3,315,864 | ||||||||||||||
Vested (Note d) | (1,365,712) | 44.13 | (1,365,712) | ||||||||||||||
| Forfeited | (407,693) | 41.76 | (722,332) | ||||||||||||||
| Outstanding as of December 31, 2024 | 3,257,804 | $ | 39.77 | 6,204,877 | |||||||||||||
| Expected to vest (Note a) | 3,305,380 | ||||||||||||||||
| Year ended December 31, 2025 | |||||||||||||||||
| Number of Performance Units | Weighted Average Grant Date Fair Value | Maximum Shares Eligible to Receive | |||||||||||||||
| Outstanding as of January 1, 2025 | 3,257,804 | $ | 39.77 | 6,204,877 | |||||||||||||
| Granted | 881,631 | 53.83 | 2,115,914 | ||||||||||||||
Vested (Note e) | (1,154,998) | 44.50 | (1,154,998) | ||||||||||||||
| Forfeited | (332,083) | 39.76 | (796,999) | ||||||||||||||
| Outstanding as of December 31, 2025 | 2,652,354 | $ | 42.39 | 6,368,794 | |||||||||||||
| Expected to vest (Note a) | 2,969,268 | ||||||||||||||||
17. Stock-based compensation (Continued)
(a)PUs expected to vest are based on the probable achievement of the performance targets after considering an estimated forfeiture rate.
(b)647,549 PSUs that vested during the year 2023 were net settled upon vesting by issuing 412,275 shares (net of minimum statutory tax withholding).
(c)Represents an adjustment made in March 2023 to the number of shares subject to the PUs granted in 2022 upon certification of the level of achievement of the performance targets underlying such awards.
(d)1,365,712 PSUs that vested during the year 2024 were net settled upon vesting by issuing 871,442 shares (net of minimum statutory tax withholding).
(e)1,154,998 PSUs that vested during the year 2025 were net settled upon vesting by issuing 738,490 shares (net of minimum statutory tax withholding).
As of December 31, 2025, the total remaining unrecognized stock-based compensation cost related to PUs amounted to $56,846, which will be recognized over the weighed average remaining requisite vesting period of 1.8 years.
Employee Stock Purchase Plan (ESPP)
On May 1, 2008, the Company adopted the Genpact Limited U.S. Employee Stock Purchase Plan and the Genpact Limited International Employee Stock Purchase Plan (together, the “ESPP”). In April 2018, these plans were amended and restated, and their terms were extended to August 31, 2028.
The ESPP allows eligible employees to purchase the Company’s common shares through payroll deductions at 90% of the closing price of the Company’s common shares on the last business day of each purchase interval. The dollar amount of common shares purchased under the ESPP cannot exceed 15% of the participating employee’s base salary, subject to a cap of $25 per employee per calendar year. With effect from September 1, 2009, the offering periods commence on the first business day in March, June, September and December of each year and end on the last business day of the subsequent May, August, November and February. 4,200,000 common shares have been reserved for issuance in the aggregate over the term of the ESPP.
During the years ended December 31, 2023, 2024 and 2025, 337,875, 303,923 and 223,543 common shares, respectively, were issued under the ESPP.
The ESPP is considered compensatory under FASB guidance on Compensation-Stock Compensation.
The compensation expense for the ESPP is recognized in accordance with the FASB guidance on Compensation—Stock Compensation. The compensation expense for the ESPP during the years ended December 31, 2023, 2024 and 2025 was $1,468, $1,065 and $964, respectively, and has been allocated to cost of revenue and selling, general, and administrative expenses.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
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.