HAEMONETICS CORPHAE
HAEMONETICS CORP Stock Compensation Disclosure
CAPITAL STOCK
Stock Plans
The Haemonetics Corporation 2019 Long-Term Incentive Compensation Plan (the “2019 Equity Plan”) was approved and became effective on July 25, 2019 (the “Effective Date”). The 2019 Equity Plan permits the award of incentive stock options, non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (including performance-based restricted stock units) and other awards to the Company’s key employees, non-employee directors and certain consultants and advisors of the Company and its subsidiaries. The 2019 Equity Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), which consists of four independent members of the Company’s Board of Directors, and is the successor to the Haemonetics Corporation 2005 Long-Term Incentive Compensation Plan, as amended (the “2005 Equity Plan”). Upon the Effective Date, no further awards were granted under the 2005 Equity Plan; however, each outstanding award under the 2005 Equity Plan will remain outstanding under that plan and continue to be governed under its terms and any applicable award agreement.
The 2019 Equity Plan initially had a share reserve of 2,700,000 new shares of common stock, plus the number of shares of common stock reserved for issuance under the 2005 Plan that remained available for grant under the 2005 Plan as of July 25, 2019, an aggregate of 5,759,433 shares as of the Effective Date.
On August 4, 2023, the 2019 Equity Plan was amended and restated to increase the number of shares available for issuance under the Plan by 2,966,231 additional shares, from 1,975,970 shares to 4,942,201 shares of common stock, subject to adjustment as provided by the terms of the 2019 Equity Plan, as amended and restated.
Under the 2019 Equity Plan, as amended and restated, any shares that are subject to the award of stock options or SARs will be counted against the authorized share reserve as one share for every one share issued and any shares that are subject to awards other than stock options, SARs or cash awards will be counted against the authorized share reserve as 2.76 shares for every one share granted. Shares of common stock subject to outstanding grants under the 2005 Equity Plan as of the Effective Date that terminate, expire, or are otherwise canceled without having been exercised will be added to the share reserve at the applicable 2019 Equity Plan ratios. The total shares available for future grant under the 2019 Equity Plan, as amended and restated and giving effect to the applicable adjustment provisions, were 4,496,411 as of March 29, 2025.
Share-Based Compensation
Compensation cost related to share-based transactions is recognized in the consolidated financial statements based on fair value. The total amount of share-based compensation expense, which is recorded on a straight line basis, is as follows:
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Selling, general and administrative expenses | $25,971 | $23,662 | $21,903 | ||||||||||||||
| Research and development | 1,847 | 3,106 | 2,364 | ||||||||||||||
| Cost of goods sold | 1,818 | 1,564 | 1,316 | ||||||||||||||
| $29,636 | $28,332 | $25,583 | |||||||||||||||
Stock Options
Options are granted to purchase common stock at prices as determined by the Committee, but in no event shall such exercise price be less than the fair market value of the common stock at the time of the grant. Options generally vest in equal installments over a four year period for employees and one year from grant for non-employee directors. Options expire not more than 7 years from the date of the grant. The grant-date fair value of options, adjusted for estimated forfeitures, is recognized as expense on a straight line basis over the requisite service period, which is generally the vesting period. Forfeitures are estimated based on historical experience.
A summary of stock option activity for the fiscal year ended March 29, 2025 is as follows:
| Options Outstanding | Weighted Average Exercise Price per Share | Weighted Average Remaining Life (years) | Aggregate Intrinsic Value ($000’s) | ||||||||||||||||||||
| Outstanding at March 30, 2024 | 1,067,004 | $ | 74.86 | 3.68 | $ | 16,820 | |||||||||||||||||
| Granted | 159,318 | 95.73 | |||||||||||||||||||||
| Exercised | (158,135) | 47.61 | |||||||||||||||||||||
| Forfeited/Canceled | (74,600) | 85.78 | |||||||||||||||||||||
| Outstanding at March 29, 2025 | 993,587 | $ | 81.75 | 3.50 | $ | 2,249 | |||||||||||||||||
| Exercisable at March 29, 2025 | 568,514 | $ | 83.49 | 2.38 | $ | 1,283 | |||||||||||||||||
| Vested or expected to vest at March 29, 2025 | 914,406 | $ | 81.47 | 3.40 | $ | 2,144 | |||||||||||||||||
The total intrinsic value of options exercised was $6.4 million, $12.4 million and $1.9 million during fiscal 2025, 2024 and 2023, respectively.
As of March 29, 2025, there was $10.4 million of total unrecognized compensation cost related to non-vested stock options. This cost is expected to be recognized over a weighted average period of 2.3 years.
The fair value was estimated using the Black-Scholes option-pricing model based on the closing stock price at the grant date and the weighted average assumptions specific to the underlying options. Expected volatility assumptions are based on the historical volatility of the Company’s common stock over the expected term of the option. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued. The expected life of the option was estimated with reference to historical exercise patterns, the contractual term of the option and the vesting period.
The assumptions utilized for option grants during the periods presented are as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Volatility | 43.9 | % | 45.3 | % | 45.0 | % | |||||||||||
| Expected life (years) | 5.2 | 5.1 | 5.0 | ||||||||||||||
| Risk-free interest rate | 4.4 | % | 3.5 | % | 2.9 | % | |||||||||||
| Dividend yield | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||||
| Grant-date fair value per Option | $ | 43.56 | $ | 39.46 | $ | 24.86 | |||||||||||
Restricted Stock Units
Restricted Stock Units (“RSUs”) generally vest in equal installments over a or period for employees and one year from grant for non-employee directors. The grant-date fair value of RSUs, adjusted for estimated forfeitures, is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The fair market value of RSUs is determined based on the market value of the Company’s shares on the date of grant.
A summary of RSU activity for the fiscal year ended March 29, 2025 is as follows:
| Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Unvested at March 30, 2024 | 338,008 | $ | 72.52 | ||||||||
| Granted | 141,568 | 95.09 | |||||||||
| Vested | (143,680) | 75.04 | |||||||||
| Forfeited | (32,893) | 78.45 | |||||||||
| Unvested at March 29, 2025 | 303,003 | $ | 81.27 | ||||||||
The weighted-average grant-date fair value of RSUs granted and total fair value of RSUs vested are as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Grant-date fair value per RSU | $ | 95.09 | $ | 89.21 | $ | 59.36 | |||||||||||
| Fair value of RSUs vested | $ | 75.04 | $ | 67.14 | $ | 70.24 | |||||||||||
As of March 29, 2025, there was $14.7 million of total unrecognized compensation cost related to non-vested restricted stock units. This cost is expected to be recognized over a weighted average period of 1.6 years.
Performance Share Units
The grant date fair value of Performance Share Units (“PSUs”), adjusted for estimated forfeitures, is recognized as expense on a straight line basis from the grant date through the end of the performance period. The value of these PSUs is generally based on relative total shareholder return which equals total shareholder return for the Company as compared with total shareholder return of the PSU comparison group, measured over a three year performance period. The PSUs comparison group consists of the Standard and Poor's (“S&P”) MidCap 400 Index. Depending on the Company’s relative performance during the performance period, a recipient of the award is entitled to receive a number of ordinary shares equal to a percentage, ranging from 0% to 200%, of the award granted. If the Company’s total shareholder return for the performance period is negative, then any share payout will be capped at 100% of the target award, regardless of the Company’s performance relative to the its comparison group. As a result, the Company may issue up to 671,686 shares related to outstanding performance-based awards.
A summary of PSU activity for the fiscal year ended March 29, 2025 is as follows:
| Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Unvested at March 30, 2024 | 369,800 | $ | 94.26 | ||||||||
Granted(1) | 231,758 | 128.25 | |||||||||
Vested(2) | (233,384) | 72.35 | |||||||||
| Forfeited | (32,331) | 109.61 | |||||||||
| Unvested at March 29, 2025 | 335,843 | $ | 112.10 | ||||||||
(1) Includes 116,207 shares issued for awards vested during fiscal 2025 based on achievement of performance metrics. | |||||||||||
(2)Includes the vesting of 226,274 and 7,110 shares that were earned for awards granted in fiscal 2022 for various performance periods ending during fiscal 2025, based on actual relative total shareholder return of 200% and 176%, respectively. | |||||||||||
The Company uses the Monte Carlo model to estimate the probability of satisfying the performance criteria and the resulting fair value of PSU awards with market conditions. The assumptions used in the Monte Carlo model for PSUs granted during each fiscal year were as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Expected stock price volatility | 35.35 | % | 48.20 | % | 52.22 | % | |||||||||||
| Peer group stock price volatility | 35.95 | % | 40.29 | % | 47.43 | % | |||||||||||
| Correlation of returns | 58.08 | % | 59.93 | % | 65.45 | % | |||||||||||
The weighted-average grant-date fair value of PSUs granted is as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Grant-date fair value per PSU | $ | 128.25 | $ | 128.83 | $ | 84.96 | |||||||||||
| Fair value of PSUs vested | $ | 72.35 | $ | — | $ | — | |||||||||||
As of March 29, 2025, there was $19.1 million of total unrecognized compensation cost related to non-vested performance share units. This cost is expected to be recognized over a weighted average period of 1.6 years.
Employee Stock Purchase Plan
The Company has an Employee Stock Purchase Plan (the “Purchase Plan”) under which a maximum of 3,200,000 shares (subject to adjustment for stock splits and similar changes) of common stock may be purchased by eligible employees. Substantially all of its full-time employees are eligible to participate in the Purchase Plan.
The Purchase Plan provides for two “purchase periods” within each of its fiscal years, the first commencing on November 1 of each year and continuing through April 30 of the next calendar year, and the second commencing on May 1 of each year and continuing through October 31 of such year. Shares are purchased through an accumulation of payroll deductions (of not less than 2% or more than 15% of compensation, as defined) for the number of whole shares determined by dividing the balance in the employee’s account on the last day of the purchase period by the purchase price per share for the stock determined under the Purchase Plan. The purchase price for shares is the lower of 85% of the fair market value of the common stock at the beginning of the purchase period, or 85% of such value at the end of the purchase period.
The fair values of shares purchased under the Employee Stock Purchase Plan are estimated using the Black-Scholes single option-pricing model with the following weighted average assumptions:
| 2025 | 2024 | 2023 | |||||||||||||||
| Volatility | 29.3 | % | 28.6 | % | 44.9 | % | |||||||||||
| Expected life (months) | 6 | 6 | 6 | ||||||||||||||
| Risk-free interest rate | 4.9 | % | 5.4 | % | 2.9 | % | |||||||||||
| Dividend Yield | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||||
The weighted average grant date fair value of the six-month option inherent in the Purchase Plan was approximately $19.13, $20.27 and $18.10 during fiscal 2025, 2024 and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | May 21, 2025 | Showing above |
| 2024 | May 20, 2024 | |
| 2023 | May 22, 2023 | |
| 2022 | May 25, 2022 | |
| 2021 | May 26, 2021 | |
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.