GXO Logistics, Inc.GXO
GXO Logistics, Inc. Stock Compensation Disclosure
14. Stock-Based Compensation
In 2021, the Company established the 2021 Omnibus Incentive Plan (the “2021 Incentive Plan”). The 2021 Incentive Plan authorizes the issuance of up to 11.6 million shares of common stock as awards. Under the 2021 Incentive Plan, directors, officers and employees may be granted various types of stock-based compensation awards. These awards include stock options, RSUs, PSUs, RSAs, and cash incentive awards. As of December 31, 2025, approximately 5.8 million shares of common stock were available for the grant under the 2021 Incentive Plan.
The following table summarizes stock-based compensation expense by line item in the Consolidated Statements of Operations:
Year Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Selling, general and administrative expense | $ | 43 | $ | 38 | $ | 35 | ||||||||||||||
| Restructuring costs and other | 4 | 1 | — | |||||||||||||||||
| Total stock-based compensation expense | $ | 47 | $ | 39 | $ | 35 | ||||||||||||||
| Income tax expense (benefit) on stock-based compensation | $ | (5) | $ | (7) | $ | 1 | ||||||||||||||
The following table summarizes stock-based compensation expense by award type in the Consolidated Statements of Operations:
Year Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| RSUs | $ | 35 | $ | 28 | $ | 22 | ||||||||||||||
| PSUs | 10 | 7 | 8 | |||||||||||||||||
| Stock options | 2 | 3 | 5 | |||||||||||||||||
| RSAs | — | 1 | — | |||||||||||||||||
| Total stock-based compensation expense | $ | 47 | $ | 39 | $ | 35 | ||||||||||||||
Stock Options
In 2021, the Company granted stock option awards that vest over five years from the grant date and have a ten-year contractual term, at an option price equal to the fair market value of the award on the grant date.
A summary of the stock option award activity for the year ended December 31, 2025, is as follows:
| (In thousands, except per share) | Number of Stock Options | Weighted-Average Exercise Price | Weighted-Average Remaining Term | |||||||||||||||||
Outstanding as of December 31, 2024 | 895 | $ | 64.67 | 6 years | ||||||||||||||||
| Exercised | (6) | 12.12 | ||||||||||||||||||
| Forfeited or expired | (157) | 64.91 | ||||||||||||||||||
Outstanding as of December 31, 2025 | 732 | $ | 65.07 | 4 years | ||||||||||||||||
Exercisable as of December 31, 2025 | 568 | $ | 65.05 | 4 years | ||||||||||||||||
The total intrinsic value of the stock options exercised during 2025, 2024 and 2023, was $0.2 million, zero and zero, respectively.
As of December 31, 2025, unrecognized stock-based compensation expense related to stock options was $1 million and is expected to be recognized over one year.
Restricted Stock Units and Performance-Based Units
The Company grants RSUs and PSUs to its key employees, officers and directors with various vesting requirements. The holders of the RSUs and PSUs do not have the rights of a stockholder and do not have voting rights until the shares are issued and delivered in settlement of the awards. RSUs generally vest over the service period, typically three years, and PSUs generally vest based on achieving certain predefined performance objectives along with a service period. For PSUs, the number of shares may be increased to the maximum or reduced to the minimum threshold based on the results of these performance metrics in accordance with the terms established at the time of the award.
The Company granted a portion of PSUs subject to market-based vesting conditions. The Company determines the fair value of PSUs subject to market-based vesting conditions using a Monte Carlo simulation model that incorporates the probability of the performance conditions being met as of the grant date. Assumptions used in the Monte Carlo simulation model for the estimated fair value were as follows:
Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Weighted-average risk-free interest rate | 4.0 | % | 4.9 | % | 4.7 | % | ||||||||||||||
| Expected volatility | 41 | % | 30 | % | 32 | % | ||||||||||||||
A summary of the RSUs and PSUs award activity for the year ended December 31, 2025, is as follows:
| RSUs | PSUs | |||||||||||||||||||||||||
| (In thousands, except per share) | Number of RSUs | Weighted-Average Grant Date Fair Value | Number of PSUs | Weighted-Average Grant Date Fair Value | ||||||||||||||||||||||
Outstanding as of December 31, 2024 | 1,379 | $ | 52.38 | 457 | $ | 58.11 | ||||||||||||||||||||
| Granted | 1,193 | 39.75 | 328 | 41.27 | ||||||||||||||||||||||
Vested(1) | (590) | 53.12 | (2) | 74.84 | ||||||||||||||||||||||
| Forfeited | (214) | 46.87 | (79) | 62.65 | ||||||||||||||||||||||
Outstanding as of December 31, 2025 | 1,768 | $ | 44.27 | 704 | $ | 48.34 | ||||||||||||||||||||
(1) The number of RSUs and PSUs vested included common stock shares that the Company withheld on behalf of its employees to satisfy the tax withholding.
The weighted-average grant-date fair value for RSUs granted in 2025, 2024 and 2023, was $39.75, $50.48 and $49.28, respectively. The total fair value of RSUs that vested during 2025, 2024 and 2023, was $24 million, $31 million and $22 million, respectively. The weighted-average grant-date fair value for PSUs granted in 2025, 2024 and 2023, was $41.27, $49.01 and $59.16, respectively. The total fair value of PSUs that vested during 2025, 2024 and 2023, was zero, $1 million, $7 million, respectively.
As of December 31, 2025, unrecognized stock-based compensation expense related to RSUs and PSUs was $63 million and is expected to be recognized over two years.
Restricted Stock Awards
In 2024, the Company granted 12 thousand RSAs at a weighted-average price of $50.38 and a fair value of $1 million. These shares vested and were issued upon grant. No RSAs were granted in 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 16, 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.