HARLEY-DAVIDSON, INC.HOG
HARLEY-DAVIDSON, INC. Stock Compensation Disclosure
Share-Based Awards
The Company has share-based compensation plans which were approved by its shareholders in April 2020 and May 2021 (the Plans) under which its Board of Directors may grant to employees share-based awards including restricted stock units (RSUs), performance shares, aspirational performance shares and nonqualified stock options. RSUs generally vest ratably over a three-year period. Performance shares include a three-year performance period with vesting based on achievement of internal performance targets and include a vesting component based on a Total Shareholder Return (TSR) relative to a peer group. Aspirational performance shares would have been earned only to the extent the aspirational share price goals for the Company's stock were achieved by December 31, 2025. If a share price goal had been met, then 50% of the associated aspirational performance shares would have vested and the remaining would have 50% vested on the one-year anniversary of the date on which the share price goal was achieved. The aspirational share price goals were not met by December 31, 2025, so the shares did not vest. Dividend or dividend equivalents are paid on RSUs, performance shares and aspirational shares that ultimately vest. At December 31, 2025, there were 2.2 million shares of common stock available for future awards under the Plans.
The Company recognizes the cost of its share-based awards in the Consolidated statements of operations. The cost of each share-based equity award is based on the grant date fair value and the cost of each share-based cash-settled award is based on the settlement date fair value. Forfeitures for share-based awards are estimated at the grant date and adjusted when it is likely to change. Share-based award expense is recognized on a straight-line basis over the service period for RSUs and for awards with performance conditions. The expense recognized reflects the number of awards that are ultimately expected to vest based on the service and, if applicable, performance requirements of each award. Total share-based award compensation expense recognized by the Company during 2025, 2024 and 2023 was $31.7 million, $49.0 million and $82.9 million, respectively, or $23.9 million, $37.5 million and $63.4 million net of taxes, respectively.
Restricted Stock Units, Performance Shares and Aspirational Shares - Settled in Stock – The fair value of RSUs and performance shares settled in stock that do not contain a market condition was determined based on the market price of the Company’s stock on the grant date. The fair value of performance shares with a relative TSR market condition and aspirational performance shares was determined using a Monte Carlo simulation. The Monte Carlo simulation uses historical volatility to determine the expected volatility and a risk-free interest rate based on U.S. Treasury rates at the time of grant. Assumptions used to calculate the grant date fair value of the performance shares with a relative TSR market condition and the aspirational performance shares, by grant date, were as follows:
Performance Share Grants:
February 2025 | February 2024 | February 2023 | |||||||||||||||
| Expected volatility | 39.1 | % | 40.3 | % | 53.9 | % | |||||||||||
| Risk-free interest rate | 4.14 | % | 4.18 | % | 4.08 | % | |||||||||||
Aspirational Share Grants:
| August 2022 | |||||
| Expected volatility | 54.5 | % | |||
| Risk-free interest rate | 3.23 | % | |||
The activity for these awards for the year ended December 31, 2025 was as follows (in thousands, except for per share amounts):
| Shares & Units | Weighted-Average Fair Value Per Share | ||||||||||
| Nonvested, beginning of period | 3,974 | $ | 27 | ||||||||
| Granted | 1,642 | $ | 27 | ||||||||
| Vested | (598) | $ | 40 | ||||||||
| Forfeited | (2,777) | $ | 22 | ||||||||
| Nonvested, end of period | 2,241 | $ | 30 | ||||||||
As of December 31, 2025, there was $26.3 million of unrecognized compensation cost related to RSUs and performance shares settled in stock, net of estimated forfeitures, that is expected to be recognized over a weighted-average period of 1.6 years.
Restricted Stock Units - Settled in Cash – RSUs settled in cash are recorded in the Consolidated balance sheets as a liability until vested. The fair value is determined based on the market price of the Company’s stock and is remeasured at each balance sheet date. The activity for these awards for the year ended December 31, 2025 was as follows (in thousands, except for per share amounts):
| Units | Weighted-Average Fair Value Per Share | ||||||||||
| Nonvested, beginning of period | 200 | $ | 32 | ||||||||
| Granted | 145 | $ | 27 | ||||||||
| Vested | (98) | $ | 32 | ||||||||
| Forfeited | (19) | $ | 29 | ||||||||
| Nonvested, end of period | 228 | $ | 21 | ||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 19, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 21, 2018 | |
| 2016 | Feb 21, 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.