HEICO CORPHEI
HEICO CORP Stock Compensation Disclosure
SHARE-BASED COMPENSATION
The Company currently has one stock option plan, the HEICO Corporation 2018 Incentive Compensation Plan ("2018 Plan"), which enables the Company to grant various forms of share-based compensation awards including stock options, restricted stock, restricted stock awards and stock appreciation rights. The 2018 Plan became effective in fiscal 2018 and replaced the Company's 2012 Incentive Compensation Plan (“2012 Plan”). Options outstanding under the Company's 2012 Plan and Non-Qualified Stock Option Plan may be exercised pursuant to their terms. The total number of shares approved by the shareholders of the Company for the 2018 Plan is 5.0 million plus any options outstanding under the 2012 Plan as of the 2018 Plan's effective date that are subsequently forfeited or expire. A total of 5.2 million shares of the Company's common stock is reserved for issuance to employees, directors, officers and consultants as of October 31, 2025, including 3.6 million shares currently under option and 1.6 million shares available for future grants.
Stock options granted pursuant to the 2018 Plan may be designated as Common Stock and/or Class A Common Stock in such proportions as shall be determined by the Board of Directors or the Stock Option Plan Committee at its sole discretion. The exercise price per share of a stock option granted under the 2018 Plan may not be less than the fair market value of the designated class of Company common stock as of the date of grant and stock option grants vest ratably over a period specified as of the date of grant (generally five years) and expire ten years after the date of grant, with compensation expense recognized over the requisite service period. Options issued under the 2018 Plan may be designated as incentive stock options or non-qualified stock options, but only employees are eligible to receive incentive stock options and no incentive stock options were outstanding as of October 31, 2025. The 2018 Plan will terminate no later than the tenth anniversary of its effective date.
All of the stock options granted in fiscal 2025 included a performance condition and will vest based on the Company's achievement of established operating performance goals. Compensation expense is recognized based upon probability assessments of grants that are expected to vest in future periods. This graded vesting performance condition requires compensation expense to be recognized using an accelerated attribution method, which results in more expense recognized in the earliest years of vesting.
Information concerning share-based activity for each of the last three fiscal years ended October 31 is as follows (in thousands, except per share data):
| Shares Under Option | |||||||||||||||||
| Shares Available For Grant | Shares | Weighted Average Exercise Price | |||||||||||||||
| Outstanding as of October 31, 2022 | 3,324 | 3,629 | $59.44 | ||||||||||||||
| Granted | (969) | 969 | $144.72 | ||||||||||||||
| Exercised | — | (537) | $29.23 | ||||||||||||||
| Cancelled | 7 | (7) | $111.41 | ||||||||||||||
| Outstanding as of October 31, 2023 | 2,362 | 4,054 | $83.74 | ||||||||||||||
| Granted | (65) | 65 | $158.68 | ||||||||||||||
| Exercised | — | (672) | $27.16 | ||||||||||||||
| Cancelled | 12 | (12) | $114.70 | ||||||||||||||
| Outstanding as of October 31, 2024 | 2,309 | 3,435 | $96.14 | ||||||||||||||
| Granted | (733) | 733 | $218.94 | ||||||||||||||
| Exercised | — | (512) | $47.80 | ||||||||||||||
| Cancelled | 72 | (72) | $162.71 | ||||||||||||||
| Outstanding as of October 31, 2025 | 1,648 | 3,584 | $126.81 | ||||||||||||||
Information concerning stock options outstanding (all of which are vested or expected to vest) and stock options exercisable by class of common stock as of October 31, 2025 is as follows (in thousands, except per share and contractual life data):
| Options Outstanding | |||||||||||||||||||||||
| Number Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| Common Stock | 1,277 | $127.54 | 5.1 | $242,967 | |||||||||||||||||||
| Class A Common Stock | 2,307 | $126.41 | 6.2 | 279,977 | |||||||||||||||||||
| 3,584 | $126.81 | 5.8 | $522,944 | ||||||||||||||||||||
| Options Exercisable | |||||||||||||||||||||||
| Number Exercisable | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| Common Stock | 898 | $95.63 | 3.9 | $199,374 | |||||||||||||||||||
| Class A Common Stock | 1,233 | $87.32 | 4.3 | 197,849 | |||||||||||||||||||
| 2,131 | $90.82 | 4.1 | $397,223 | ||||||||||||||||||||
Information concerning stock options exercised is as follows (in thousands):
| Year ended October 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash proceeds from stock option exercises | $13,212 | $7,951 | $6,713 | ||||||||||||||
| Tax benefit realized from stock option exercises | 26,987 | 13,558 | 6,101 | ||||||||||||||
| Intrinsic value of stock option exercises | 106,116 | 121,532 | 63,710 | ||||||||||||||
Net income from consolidated operations for the fiscal years ended October 31, 2025, 2024 and 2023 includes compensation expense of $34.4 million, $18.8 million and $15.5 million, respectively, and an income tax benefit of $5.2 million, $2.4 million and $2.0 million, respectively, related to the Company’s stock options. Substantially all of the stock option compensation expense was recorded as a component of SG&A expenses in the Company’s Consolidated Statements of Operations. As of October 31, 2025, there was $81.1 million of pre-tax unrecognized compensation expense related to nonvested stock options, which is expected to be recognized over a weighted average period of approximately 2.6 years. The total fair value of stock options that vested in fiscal 2025, 2024 and 2023 was $18.5 million, $20.1 million and $11.1 million, respectively. If there were a change in control of the Company, all of the unvested options outstanding as of October 31, 2025 would become immediately exercisable.
The fair value of each stock option grant in fiscal 2025, 2024 and 2023 was estimated on the date of grant using the Black-Scholes option-pricing model based on the following weighted average assumptions:
| Year ended October 31, | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| Common Stock | Class A Common Stock | Class A Common Stock | Common Stock | Class A Common Stock | ||||||||||||||||||||||||||||
| Expected stock price volatility | 30.27 | % | 31.66 | % | 32.65 | % | 31.48 | % | 33.59 | % | ||||||||||||||||||||||
| Risk-free interest rate | 4.22 | % | 4.13 | % | 4.20 | % | 3.63 | % | 3.64 | % | ||||||||||||||||||||||
| Dividend yield | .09 | % | .12 | % | .16 | % | .15 | % | .17 | % | ||||||||||||||||||||||
| Forfeiture rate | .00 | % | .00 | % | .00 | % | .00 | % | .00 | % | ||||||||||||||||||||||
| Expected option life (years) | 9 | 6 | 6 | 8 | 6 | |||||||||||||||||||||||||||
| Weighted average fair value | $124.86 | $77.79 | $63.15 | $69.57 | $50.90 | |||||||||||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 22, 2025 | Showing above |
| 2024 | Dec 19, 2024 | |
| 2023 | Dec 20, 2023 | |
| 2022 | Dec 21, 2022 | |
| 2021 | Dec 21, 2021 | |
| 2020 | Dec 23, 2020 | |
| 2019 | Dec 19, 2019 | |
| 2018 | Dec 20, 2018 | |
| 2017 | Dec 21, 2017 | |
| 2016 | Dec 15, 2016 | |
| 2015 | Dec 17, 2015 | |
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.