GE Vernova Inc.GEV
GE Vernova Inc. Stock Compensation Disclosure
SHARE-BASED COMPENSATION. We grant stock options, restricted stock units (RSUs), and performance share units
(PSUs) to employees under the 2024 Long-Term Incentive Plan (LTIP). Under the LTIP, we are authorized to issue up to approximately
25 million shares. We record compensation expense for awards expected to vest over the vesting period. We estimate forfeitures based on
experience and adjust expense to reflect actual forfeitures. When options are exercised, RSUs vest, and PSUs are earned, we issue
shares from authorized unissued common stock.
Stock options provide awardees the opportunity to purchase shares of GE Vernova common stock in the future at the market price of our
common stock on the date the award is granted (Strike price). The options become exercisable over the vesting period, typically becoming
fully vested in either 3 or 4 years from the date of grant, and generally expire 10 years from the grant date if not exercised. RSUs entitle the
awardee to receive shares of GE Vernova common stock upon vesting. PSUs entitle an awardee to receive shares of GE Vernova common
stock upon certification by the Company's Compensation and Human Capital Committee at the level of performance achievement of the
applicable performance metrics over a defined performance period. We value stock options using a Black-Scholes option pricing model,
RSUs using the market price of our common stock on the grant date, and PSUs using the market price of our common stock on the grant
date and a Monte Carlo simulation as needed based on performance metrics.
WEIGHTED AVERAGE GRANT DATE FAIR VALUE (In dollars) | 2025 | 2024 |
Stock options | $122.42 | $69.56 |
RSUs | 360.53 | 167.57 |
PSUs | 355.51 | 182.85 |
KEY ASSUMPTIONS USED IN THE BLACK-SCHOLES VALUATION FOR STOCK OPTIONS | 2025 | 2024 |
Risk-free interest rate | 4.1% | 4.3% |
Dividend yield | 0.3% | —% |
Expected volatility | 30% | 30% |
Expected term (in years) | 6.0 | 6.8 |
Strike price (in dollars) | $335.18 | $170.03 |
For awards granted in 2024 and 2025, the expected volatility was derived from a peer group’s blended historical and implied volatility as
GE Vernova does not have sufficient historical volatility based on the expected term of the underlying options. The expected term of the
stock options was determined using the simplified method based on the awards' vest schedule and contractual term. The risk-free interest
rate was determined using the implied yield currently available for zero-coupon U.S. government issues with a remaining term
approximating the expected life of the options.
SHARE-BASED COMPENSATION ACTIVITY | Stock options | |||
Shares (in thousands) | Weighted average exercise price (in dollars) | Weighted average contractual term (in years) | Intrinsic value (in millions) | |
Outstanding at January 1, 2025 | 2,737 | $131.16 | ||
Granted | 66 | 335.18 | ||
Exercised | (589) | 100.14 | ||
Forfeited | (91) | 181.02 | ||
Expired | (11) | 146.60 | ||
Outstanding at December 31, 2025 | 2,113 | $144.04 | 6.8 | $1,077 |
Exercisable at December 31, 2025 | 710 | $83.37 | 3.5 | $405 |
Expected to vest | 1,180 | $174.86 | 8.4 | $565 |
RSUs | PSUs | ||||||||
Shares (in thousands) | Weighted average grant date fair value (in dollars) | Weighted average vesting period (in years) | Intrinsic value (in millions) | Shares (in thousands) | Weighted average grant date fair value (in dollars) | Weighted average vesting period (in years) | Intrinsic value (in millions) | ||
Outstanding at January 1, 2025 | 3,008 | $89.06 | 1,076 | $128.74 | |||||
Granted | 297 | 360.53 | 183 | 355.51 | |||||
Vested | (1,842) | 78.25 | (1) | 208.69 | |||||
Forfeited | (119) | 145.93 | (94) | 171.08 | |||||
Outstanding at December 31, 2025 | 1,344 | $164.11 | 0.6 | $878 | 1,164 | $166.61 | 0.8 | $761 | |
Expected to vest | 1,271 | $160.62 | 0.6 | $831 | N/A | N/A | N/A | N/A | |
Share-based compensation expense is recognized within Cost of equipment, Cost of services, Selling, general, and administrative
expenses, and Research and development expenses, as appropriate, in our Consolidated and Combined Statement of Income (Loss).
SHARE-BASED COMPENSATION EXPENSE | 2025 | 2024 |
Share-based compensation expense (pre-tax) (a) | $257 | $155 |
Income tax benefit | (181) | (59) |
Share-based compensation expense (after-tax) | $76 | $96 |
(a) Unrecognized compensation expense as of December 31, 2025 was $282 million, which will be amortized over a weighted average
period of 1.0 year.
OTHER SHARE-BASED COMPENSATION DATA | 2025 | 2024 |
Cash received from stock options exercised | $55 | $130 |
Intrinsic value of stock options exercised and RSU/PSUs vested | 920 | 424 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jan 29, 2026 | Showing above |
| 2024 | Feb 6, 2025 | |
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.