Hamilton Insurance Group, Ltd.HG
Hamilton Insurance Group, Ltd. Stock Compensation Disclosure
Share Incentive Plans
The Company is authorized to issue restricted stock units ("RSUs"), performance stock units ("PSUs"), restricted stock awards ("RSAs"), options (including incentive stock options and non-qualified stock options), stock appreciation rights, stock bonus awards, other stock based awards, or any combination thereof to its employees and directors under the 2023 Equity Incentive Plan, which was adopted by the Board of Directors and approved by the shareholders in connection with the Company's IPO. The 2023 Equity Incentive Plan became effective upon the completion of the IPO and replaced the 2013 Equity Incentive Plan. No new awards will be granted under the 2013 Equity Incentive Plan.
The total number of Class B common shares available for issuance under the 2023 Equity Incentive Plan may be increased on the first day of each fiscal year for a period of not more than nine years, commencing on the first day of the second fiscal year following the date on which the 2023 Equity Incentive Plan is adopted in an amount equal to the lesser of (i) two percent (2%) of the outstanding Class B common shares on the last day of the immediately preceding fiscal year, and (ii) such number of Class B common shares as determined by the Company's Board of Directors (or a committee thereof) in its discretion. As of December 31, 2025, 5,452,566 Class B common shares are available for issuance of awards of all types.
Separately, the Value Appreciation Pool ("VAP") is a long-term incentive compensation plan that rewarded employees with 10% of the increase in the multiple of the Company's estimated fair market value to GAAP shareholders' equity between the December 1, 2020 VAP inception date and the Company's Initial Public Offering on November 10, 2023.
The following table presents the compensation expense recognized relating to each award type:
| Years Ended December 31, | |||||||||||||||||
($ in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
Share based compensation expense: | |||||||||||||||||
| RSUs | $ | 15,575 | $ | 12,933 | $ | 11,358 | |||||||||||
| VAP RSUs | 1,805 | 9,210 | 30,352 | ||||||||||||||
| PSUs | 11,880 | 8,241 | 2,668 | ||||||||||||||
Total share based compensation expense: | 29,260 | 30,384 | 44,378 | ||||||||||||||
| Tax benefit | (1,902) | (1,750) | (1,251) | ||||||||||||||
Share based compensation expense, net of taxes: | $ | 27,358 | $ | 28,634 | $ | 43,127 | |||||||||||
The following table presents the unrecognized compensation expense relating to each award type and the weighted-average period in years over which it is expected to be recognized.
| December 31, 2025 | |||||||||||
($ in thousands, except for weighted-average recognition period) | Unrecognized Share Based Compensation Expense | Weighted-Average Recognition Period (in years) | |||||||||
Unrecognized share based compensation expense: | |||||||||||
| RSUs | $ | 9,926 | 0.9 | ||||||||
| PSUs | 9,111 | 1.4 | |||||||||
Total unrecognized share based compensation expense: | $ | 19,037 | |||||||||
The aggregate fair value of vested awards for the years ended December 31, 2025, 2024 and 2023 was $60.0 million, $38.6 million, and $10.1 million, respectively.
Restricted Stock Units
The grant date fair value of restricted stock awards is established at the fair market value of the Company’s Class B common shares on the date of grant. During the years ended December 31, 2025, 2024 and 2023, the Company granted employees RSUs with a total estimated fair value of $15.8 million, $14.5 million, and $14.2 million, respectively, which generally vest over a three-year period. During the years ended December 31, 2025 and 2024, the Company granted non-employee directors RSUs with a total fair value of $1.5 million and $1.4 million, respectively, which vest over a one-year period.
The following table presents a roll forward of the Company’s RSUs based on expected vesting:
| Year Ended December 31, 2025 | |||||||||||
| Number of RSUs | Weighted-Average Grant Date Fair Value | ||||||||||
Balance, beginning of year | 1,954,396 | $ | 14.43 | ||||||||
Granted | 931,268 | $ | 18.59 | ||||||||
Vested | (902,698) | $ | 14.53 | ||||||||
Forfeited | (116,234) | $ | 15.57 | ||||||||
Balance, end of year | 1,866,732 | $ | 16.39 | ||||||||
Value Appreciation Pool Restricted Stock Units
The VAP, which was granted by a then nonpublic company, was initially measured as a liability award at intrinsic value and no compensation cost was recorded over the period December 1, 2020 to March 31, 2023. On May 15, 2023, the Company became a public business entity and the VAP was remeasured at fair value. The fair value of the compensation cost was estimated at each reporting date and expensed over the period for which the employee is required to provide services in exchange for the award, with any changes recorded in compensation expense by a cumulative catch-up adjustment.
The Company consummated an IPO of its Class B common shares and, on November 10, 2023, closed its first day of trading. In accordance with the Compensation Committee's decision that the VAP award would be settled in shares if triggered by an IPO, the VAP became subject to equity award accounting. The VAP RSUs vested in two tranches, subject to continued service: 50% on each of the first and second anniversaries of the November 10, 2023 trigger event. Participants who left prior to vesting forfeited any unsettled portion of their awards.
The Company recorded VAP compensation expense of $1.8 million, $9.2 million and $34.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. Of the total expense recognized for the year ended December 31, 2023, $4.2 million was recorded as an adjustment to retained earnings in "Share compensation expense" in the second quarter of 2023.
The following table presents a roll forward of the Company’s VAP RSUs based upon vesting:
| Year Ended December 31, 2025 | |||||||||||
| Number of VAP RSUs | Weighted-Average Grant Date Fair Value | ||||||||||
Balance, beginning of year | 1,528,809 | $ | 15.32 | ||||||||
Vested | (1,442,064) | $ | 15.32 | ||||||||
Forfeited | (86,745) | $ | 15.32 | ||||||||
Balance, end of year | — | ||||||||||
Performance Stock Units
During the years ended December 31, 2025 and 2024, the Company granted PSUs that vest over three years and entitle participants to between 0-200% of the target award. Settlement of the PSUs is subject to achievement of defined performance metrics and to each participant's continued employment through each vesting date.
During the year ended December 31, 2023, the Company granted PSUs that vest on the third January 1st following their grant dates and entitle participants to between 0-200% of the target award. All other significant terms and conditions are consistent with the PSUs described above.
The following table presents a roll forward of the Company's PSUs based upon expected vesting:
| Year Ended December 31, 2025 | |||||||||||
Number of PSUs | Weighted-Average Grant Date Fair Value | ||||||||||
Balance, beginning of year | 1,303,448 | $15.47 | |||||||||
| Granted | 254,766 | $18.41 | |||||||||
| Vested | (265,968) | $15.47 | |||||||||
| Change in performance factor | 329,978 | $17.74 | |||||||||
Balance, end of year | 1,622,224 | $16.39 | |||||||||
Warrants
The Company's warrants were issued in 2014, had a 10-year term and were fully exercised by December 31, 2024. Each warrant entitled the holder to purchase one common share of Hamilton Group at an exercise price of $10.00. The following table presents a summary of those warrants:
| (Intrinsic value in $ in thousands) | Year Ended December 31, 2024 | ||||||||||||||||||||||||||||
Warrants Outstanding and Exercisable | Number of Warrants | Weighted-Average Exercise Price | Weighted-Average Grant Date Fair Value | Total Intrinsic Value | Weighted-Average Remaining Contractual Term | ||||||||||||||||||||||||
At December 31, 2023 | 810,000 | $ | 10.00 | $ | 4.52 | $ | 4,010 | 0.3 | |||||||||||||||||||||
| Exercised | (810,000) | $ | 10.00 | $ | 4.52 | $ | 4,140 | ||||||||||||||||||||||
At December 31, 2024 | — | $ | — | $ | — | $ | — | 0.0 | |||||||||||||||||||||
Board of Directors' Fees
Prior to the 2025 inception of non-employee director RSU Grants, the Company settled a portion of its board of directors fees in shares at each director's option. Expense relating to stock-settled directors' fees for the years ended December 31, 2024 and 2023 was $0.6 million and $0.6 million, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Mar 7, 2024 | |
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.