Howard Hughes Holdings Inc.HHH
Howard Hughes Holdings Inc. Stock Compensation Disclosure
13. Stock-Based Compensation Plans | ||
In September 2025, the Company’s stockholders approved the Howard Hughes Holdings Inc. 2025 Equity Incentive Plan (the 2025 Equity Plan). Pursuant to the 2025 Equity Plan, 2,000,000 shares of the Company’s common stock were reserved for issuance. The 2025 Equity Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. Employees, directors, and consultants of the Company are eligible for Awards. The 2025 Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors (Compensation Committee).
Prior to the adoption of the 2025 Equity Plan, equity awards were issued under The Howard Hughes Corporation 2020 Equity Incentive Plan (the 2020 Equity Plan) and The Howard Hughes Corporation Amended and Restated 2010 Equity Incentive Plan (the 2010 Equity Plan). The adoption of the 2025 Equity Plan did not impact the administration of Awards issued under previous plans but following adoption of the 2025 Equity Plan, equity awards will no longer be granted under previous plans.
As of December 31, 2025, there were a maximum of 1,939,450 HHH shares available for future grants under the 2025 Equity Plan.
The following summarizes stock-based compensation expense, net of amounts capitalized to development projects, for the years ended December 31:
| thousands | 2025 | 2024 | 2023 | ||||||||||||||
| Stock Options (a) | $ | 270 | $ | 195 | $ | 336 | |||||||||||
| Restricted Stock (b) | 16,345 | 11,875 | 11,389 | ||||||||||||||
| Pre-tax stock-based compensation expense | $ | 16,615 | $ | 12,070 | $ | 11,725 | |||||||||||
| Income tax benefit | $ | 1,116 | $ | 1,077 | $ | 1,001 | |||||||||||
(a)Amounts shown are net of immaterial amounts capitalized to development projects.
(b)Amounts shown are net of $3.2 million capitalized to development projects in 2025, $3.9 million capitalized to development projects in 2024, and $4.6 million capitalized to development projects in 2023.
Stock Options There were no grants of stock options in 2025. The following table summarizes stock option activity:
| Stock Options | Weighted-average Exercise Price | Weighted-average Remaining Contractual Term (years) | Aggregate Intrinsic Value | ||||||||||||||
Stock options outstanding at December 31, 2024 | 91,402 | $ | 91.90 | ||||||||||||||
| Exercised (a) | (1,615) | 63.36 | |||||||||||||||
| Expired | (21,547) | 123.44 | |||||||||||||||
Stock options outstanding at December 31, 2025 | 68,240 | $ | 82.62 | 2.9 | $ | 575,760 | |||||||||||
Stock options vested and expected to vest at December 31, 2025 | 68,240 | $ | 82.62 | 2.9 | $ | 575,760 | |||||||||||
Stock options exercisable at December 31, 2025 | 59,621 | $ | 83.16 | 2.5 | $ | 505,949 | |||||||||||
(a)The total intrinsic value of stock options exercised was immaterial during 2025, based on the difference between the market price at the exercise date and the exercise price. There were no stock options exercised during 2024 or 2023.
The fair value of stock option awards is determined using the Black-Scholes option-pricing model with the following assumptions:
–Expected life—Based on the average of the time to vesting and full term of an option
–Risk-free interest rates—Based on the U.S. Treasury rate over the expected life of an option
–Expected volatility—Based on the average of implied and historical volatilities as of each of the grant dates
The fair value on the grant date and the significant assumptions used in the Black‑Scholes option‑pricing model are as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Weighted-average grant date fair value | N/A | $11.16 | N/A | ||||||||||||||
| Assumptions | |||||||||||||||||
| Expected life of options (in years) | N/A | 3.3 | N/A | ||||||||||||||
| Risk-free interest rate | N/A | 4.3% | N/A | ||||||||||||||
| Expected volatility | N/A | 30.6% | N/A | ||||||||||||||
| Expected annual dividend per share | — | — | N/A | ||||||||||||||
Generally, options granted vest over requisite service periods, expire ten years after the grant date and generally do not become exercisable until their restrictions on exercise lapse after the five-year anniversary of the grant date.
The balance of unamortized stock option expense as of December 31, 2025, was $0.1 million, which is expected to be recognized over a weighted‑average period of 1.3 years.
Restricted Stock Restricted stock awards may not be sold or otherwise transferred until restrictions have lapsed as established by the Compensation Committee. In addition to the granting of restricted stock to employees, the Company awards restricted stock to non‑employee directors as part of their annual retainer. The employee awards generally vest over a range of to five years, and non‑employee director awards generally vest in approximately one year.
The following table summarizes restricted stock activity:
| Restricted Stock | Weighted-average Grant Date Fair Value | ||||||||||
| Restricted stock outstanding at December 31, 2024 | 371,955 | $ | 56.43 | ||||||||
| Granted | 376,989 | 76.68 | |||||||||
| Vested | (171,887) | 69.37 | |||||||||
| Forfeited | (77,582) | 66.81 | |||||||||
| Restricted stock outstanding at December 31, 2025 | 499,475 | $ | 65.66 | ||||||||
The grant date fair value of restricted stock is based on the closing price of common stock at grant date. For restricted stock awards that vest based on stockholder returns, the grant date fair value is calculated using a Monte-Carlo approach which simulates the Company’s stock price on the corresponding vesting dates and is reflected at the target level of performance. For restricted stock awards that vest based on net asset value per share, the grant date fair value is calculated using a Monte-Carlo approach which simulates the Company’s net asset value on the vesting date and is reflected at the target level of performance.
The weighted-average grant-date fair value per share of restricted stock granted was $66.16 during 2024 and $83.85 during 2023. The fair value of restricted stock that vested was $12.9 million during 2025, $10.3 million during 2024, and $9.6 million during 2023, based on the HHH market price at the vesting date.
The balance of unamortized restricted stock expense as of December 31, 2025, was $20.9 million, which is expected to be recognized over a weighted‑average period of 2.1 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 27, 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.