HUNTINGTON INGALLS INDUSTRIES, INC.HII
HUNTINGTON INGALLS INDUSTRIES, INC. Stock Compensation Disclosure
STOCK COMPENSATION PLANS
As of December 31, 2025, HII had stock-based compensation awards outstanding under the following plans: the Huntington Ingalls Industries, Inc. 2011 Long-Term Incentive Stock Plan (the "2011 Plan"), the Huntington Ingalls Industries, Inc. 2012 Long-Term Incentive Stock Plan (the "2012 Plan"), and the Huntington Ingalls Industries, Inc. 2022 Long-Term Incentive Stock Plan (the "2022 Plan").
Stock Compensation Plans
On March 1, 2022, the Company's board of directors adopted the 2022 Plan, subject to stockholder approval, and the Company's stockholders approved the 2022 Plan on May 3, 2022. Award grants made on or after May 3, 2022, were made under the 2022 Plan. Award grants made prior to May 3, 2022, were made under the 2011 Plan or the 2012 Plan. No future grants will be made under the 2011 Plan or the 2012 Plan.
The 2022 Plan permits awards of stock options, stock appreciation rights, and other stock awards. Stock awards, in the form of RPSRs and RSRs, are granted to employees and members of the board of directors without payment to the Company. The 2022 Plan authorized (i) 1.3 million new shares; plus (ii) any shares subject to outstanding awards under the 2012 Plan that were subsequently forfeited to the Company; plus (iii) any shares subject to outstanding awards under the 2012 Plan that were subsequently exchanged by the participant as full or partial payment to the Company in connection with any such award or exchanged by a participant or withheld by the Company to satisfy the tax withholding obligations related to any such award. As of December 31, 2025, the remaining aggregate number of shares of the Company's common stock authorized for issuance under the 2022 Plan was 0.9 million.
The 2011 Plan and 2012 Plan permitted awards of stock options and other stock awards. Stock awards, in the form of stock rights, were granted to members of the board of directors without payment to the Company.
Stock Awards
The Company issued the following stock awards in the years ended December 31, 2025, 2024, and 2023:
Restricted Performance Stock Rights - For the year ended December 31, 2025, the Company granted approximately 0.2 million RPSRs at a weighted average share price of $169.27. These rights are subject to cliff vesting on December 31, 2027. For the year ended December 31, 2024, the Company granted approximately 0.1 million RPSRs at a weighted average share price of $288.26. These rights are subject to cliff vesting on December 31, 2026. For the year ended December 31, 2023, the Company granted approximately 0.2 million RPSRs at a weighted average share price of $215.24. These rights were fully vested as of December 31, 2025. All of the RPSRs are subject to the achievement of performance-based targets at the end of the respective vesting periods and will ultimately vest between 0% and 200% of grant date value.
Compensation Restricted Stock Rights - For the year ended December 31, 2025, the Company granted approximately 0.1 million compensation RSRs at a weighted average share price of $170.99. For the year ended December 31, 2024, the Company granted approximately 0.1 million compensation RSRs at a weighted average share price of $287.38.These rights vest 33 1/3% upon each of the first, second, and third anniversaries of the grant date. No compensation RSRs were granted for the year ended December 31, 2023.
Retention Restricted Stock Rights - Retention stock awards are granted to key employees primarily to incentivize continued employment with the Company. In 2025, the Company granted approximately 2,700 retention RSRs at a weighted average share price of $227.70, with cliff vesting to two years from the grant date. In 2024, the Company granted approximately 2,200 retention RSRs at a weighted average share price of $281.01, with cliff vesting to three years from the grant date. In 2023, the Company granted approximately 9,500 retention RSRs at a weighted average share price of $213.37, with cliff vesting to three years from the grant date. As of December 31, 2025, approximately 5,200 retention RSRs were outstanding.
The Company also received transfers of stock awards from employees in satisfaction of minimum tax withholding obligations associated with the vesting of stock awards during the period. The Company does not consider these transfers as treasury stock because the stock is not issued; rather, the award is surrendered in lieu of payments of cash to settle tax obligations.
Stock Rights and Stock Issuances - The Company granted stock rights to its non-employee directors on a quarterly basis in 2025, with each grant less than 10,000 shares. All stock rights granted to non-employee directors are fully vested on the grant date. If a non-employee director has met certain stock ownership requirements, the non-employee director may elect under the terms of the Amended and Restated Directors’ Compensation Policy and Amended and Restated Board Deferred Compensation Policy to receive their annual equity award for the following calendar year in the form of either shares of the Company’s common stock or stock units that are payable in the fifth calendar year after the year in which the annual equity award is earned, or, if earlier, upon termination of the director’s board service.
Non-employee directors may also elect to receive their annual cash retainers in the form of stock units that become payable upon termination of the director’s board service. Non-employee directors who elect to receive their annual cash retainers in the form of stock units and have met their stock ownership requirements may elect under the terms of the Amended and Restated Directors’ Compensation Policy and Amended and Restated Board Deferred Compensation Policy to receive in the following calendar year either shares of the Company's common stock or stock units that are payable in the fifth calendar year after the year in which the stock units are earned, or, if earlier, upon termination of the director’s board service.
Stock award activity for the years ended December 31, 2025, 2024, and 2023, was as follows:
Stock Awards (in thousands) | Weighted-Average Grant Date Fair Value | Weighted Average Remaining Contractual Term | ||||||||||||||||||
| Outstanding as of December 31, 2022 | 506 | $ | 189.68 | 1.0 year | ||||||||||||||||
| Granted | 177 | 215.16 | ||||||||||||||||||
| Adjustment due to performance | 32 | 224.35 | ||||||||||||||||||
| Vested | (155) | 224.35 | ||||||||||||||||||
| Forfeited | (25) | 178.68 | ||||||||||||||||||
| Outstanding as of December 31, 2023 | 535 | 189.98 | 1.0 year | |||||||||||||||||
| Granted | 174 | 286.14 | ||||||||||||||||||
| Adjustment due to performance | 61 | 181.76 | ||||||||||||||||||
| Vested | (206) | 181.76 | ||||||||||||||||||
| Forfeited | (14) | 240.77 | ||||||||||||||||||
| Outstanding as of December 31, 2024 | 550 | 221.59 | 1.0 year | |||||||||||||||||
| Granted | 316 | 172.05 | ||||||||||||||||||
| Adjustment due to performance | 21 | 215.47 | ||||||||||||||||||
| Vested | (194) | 215.47 | ||||||||||||||||||
| Forfeited | (30) | 219.31 | ||||||||||||||||||
| Outstanding as of December 31, 2025 | 663 | $ | 199.43 | 1.0 year | ||||||||||||||||
Vested awards include stock awards that fully vested during the year based on the level of achievement of the relevant performance goals. The performance goals for outstanding RPSRs granted in 2025, 2024, and 2023 were based on three metrics as defined in the grant agreements: earnings before interest, taxes, depreciation, amortization, and pension ("EBITDAP"), weighted at 40%, pension-adjusted return on invested capital, weighted at 40%, and relative EBITDAP growth, weighted at 20%. The Company's EBITDAP growth is measured against EBITDAP growth of the S&P Aerospace and Defense Select Index.
Compensation Expense
The Company recorded $54 million, $23 million, and $34 million of expense related to stock awards for the years ended December 31, 2025, 2024, and 2023, respectively. The Company recorded $12 million, $7 million, and $10 million as tax benefits related to stock awards for the years ended December 31, 2025, 2024, and 2023, respectively.
The Company recognized tax benefits for the years ended December 31, 2025, 2024, and 2023, of $8 million, $6 million, and $7 million, respectively, from the issuance of stock in settlement of stock awards.
Unrecognized Compensation Expense
As of December 31, 2025, the Company had $23 million of unrecognized compensation expense associated with RSRs granted in 2025 and 2024, which will be recognized over a weighted average period of 1.0 year, and $25 million of unrecognized expense associated with RPSRs granted in 2025 and 2024, which will be recognized over a weighted average period of 1.0 year.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 5, 2026 | Showing above |
| 2024 | Feb 6, 2025 | |
| 2023 | Feb 1, 2024 | |
| 2022 | Feb 9, 2023 | |
| 2021 | Feb 10, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 14, 2019 | |
| 2017 | Feb 15, 2018 | |
| 2016 | Feb 16, 2017 | |
| 2015 | Feb 18, 2016 | |
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.