HERTZ GLOBAL HOLDINGS, INCHTZ
HERTZ GLOBAL HOLDINGS, INC Stock Compensation Disclosure
Stock-Based Compensation
The stock-based compensation expense associated with the Hertz Holdings stock-based compensation plans is pushed down from Hertz Global and recorded at Hertz.
2021 Omnibus Incentive Plan
During 2021, Hertz Global's Board approved the Hertz Global Holdings, Inc. 2021 Omnibus Incentive Plan (the “2021 Omnibus Plan"). Hertz Global initially authorized 62,250,055 shares of its common stock pursuant to awards granted under the 2021 Omnibus Plan. In addition, beginning on June 30, 2022, and ending on June 20, 2031 (the
“Evergreen Date”), the total authorized shares under the 2021 Omnibus Plan will automatically increase by a number of shares equal to 2% of the total number of shares of Hertz Global's common stock outstanding on the June 29th immediately preceding the applicable Evergreen Date (the "Evergreen Increase"). Notwithstanding the foregoing, Hertz Global's Board may act prior to the Evergreen Date of a given year to provide that there will be no Evergreen Increase for such year, or that the increase for such year will be a lesser number of shares. As of December 31, 2025, 36,090,864 shares of the Hertz Global's common stock are authorized and remain available for future grants under the 2021 Omnibus Plan, which reflects application of the Evergreen Increase as prescribed by the 2021 Omnibus Plan in June 2025. Vesting of the outstanding equity awards is also subject to accelerated vesting as set forth in the 2021 Omnibus Plan.
A summary of the total employee compensation expense and related income tax benefits recognized for grants made under the 2021 Omnibus Plan is as follows:
| Years Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
Employee compensation expense(1) | $ | 60 | $ | (6) | $ | 85 | |||||||||||
| Income tax (benefit) expense | (9) | (7) | (8) | ||||||||||||||
| Employee compensation expense, net | $ | 51 | $ | (13) | $ | 77 | |||||||||||
1) For the year ended December 31, 2024, includes $68 million of former CEO awards forfeited in March 2024.
As of December 31, 2025, there was $94 million of total unrecognized compensation cost expected to be recognized over the remaining 1.4 years, on a weighted average basis, of the requisite service period that began on the grant dates of outstanding awards.
The 2021 Omnibus Plan provides for the award of stock options, stock appreciation rights ("SARs"), performance stock, PSUs, performance units ("PUs"), restricted stock, RSUs, share awards and deferred stock units to eligible recipients. Under the 2021 Omnibus Plan, the Compensation Committee of the Board (the "Compensation Committee") has the authority to determine the eligible recipients to whom awards may be granted, the types of awards and their terms or conditions. The Board exercises these rights for certain executive officers.
Stock Options and SARs
The 2021 Omnibus Plan provides that stock option grants may be either incentive stock options or non-statutory stock options, however, the Company may not grant incentive stock options until such time as the plan has been approved by the Company's stockholders. Except in the case of replacement awards, stock options will have an exercise price per share that is no less than fair market value of the Company's common stock on the stock option grant date.
SARs may be granted to participants in tandem with stock options or on their own. Unless otherwise determined by the Compensation Committee or Board at or after the grant date, tandem SARs will have substantially similar terms as the stock options with which they are granted. Generally, each SAR will entitle the participant upon exercise to an amount (in cash, shares or a combination of cash and shares, as determined by the Compensation Committee or Board) equal to the product of (i) the excess of (A) the fair market value on the exercise date of one share of common stock, over (B) the strike price per share, times (ii) the number of shares of common stock covered by the SAR.
The Company accounts for stock options as equity-classified awards and recognizes compensation cost on a straight-line basis over the vesting period. The value of each stock option award is estimated on the grant date
using a Black-Scholes option valuation model that incorporates the assumptions noted in the following table. The Company calculates the expected volatility based on the historical movement of its share price.
| Grants | |||||
| Assumption | 2021 | ||||
| Expected volatility | 75 | % | |||
| Expected dividend yield | — | % | |||
| Expected term (years) | 6 | ||||
| Risk-free interest rate | 1.19 | % | |||
| Weighted-average grant date fair value | $ | 17.12 | |||
A summary of stock option activity under the 2021 Omnibus Plan as of December 31, 2025 is presented below:
| Shares | Weighted Average Exercise Price | Weighted- Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (In millions) | ||||||||||||||||||||
Outstanding as of January 1, 2025(1) | 1,702,418 | $ | 26.17 | 6.7 | $ | — | |||||||||||||||||
| Granted | — | — | 0.0 | — | |||||||||||||||||||
| Exercised | — | — | 0.0 | — | |||||||||||||||||||
| Forfeited or Expired | (544,148) | 26.17 | 0.0 | — | |||||||||||||||||||
Outstanding as of December 31, 2025 | 1,158,270 | 26.17 | 5.8 | — | |||||||||||||||||||
Exercisable as of December 31, 2025 | (1,158,270) | 26.17 | 5.8 | — | |||||||||||||||||||
Non-vested as of December 31, 2025 | — | ||||||||||||||||||||||
(1) All shares outstanding as of January 1, 2025 were vested.
Performance Stock Awards, Performance Stock Units and Performance Units
PSAs, PSUs and PUs granted under the 2021 Omnibus Plan will vest based on the achievement of predetermined performance goals over performance periods determined by the Compensation Committee or Board or upon the occurrence of certain events, as determined by the Compensation Committee or Board. PSAs are awards of common stock that are subject to forfeiture until predetermined performance conditions have been achieved. A PSU is a contractual right to receive a stated number of shares of common stock, or if provided by the Compensation Committee or Board on or after the grant date, cash equal to the fair market value of such shares of common stock or any combination of shares of common stock and cash having an aggregate fair market value equal to such stated number of shares of common stock, which right is forfeitable until the achievement of predetermined performance conditions. PUs represent the right to receive a cash denominated award, payable in cash or shares of common stock or a combination thereof, and are forfeitable until the achievement of predetermined performance conditions.
A summary of the PSU activity as of December 31, 2025 under the 2021 Omnibus Plan is presented below. As of December 31, 2025, there were no issued or outstanding grants of PSAs or PUs under the 2021 Omnibus Plan.
| Shares | Weighted- Average Fair Value | Aggregate Intrinsic Value (In millions) | |||||||||||||||
Outstanding as of January 1, 2025 | 5,197,913 | $ | 4.67 | $ | 19 | ||||||||||||
Granted(1) | 1,366,103 | 4.13 | — | ||||||||||||||
| Vested | (109,431) | 20.38 | — | ||||||||||||||
| Forfeited or Expired | (983,147) | 5.66 | — | ||||||||||||||
Outstanding as of December 31, 2025 | 5,471,438 | 4.04 | 28 | ||||||||||||||
(1) Presented assuming the issuance at the original target award amount (100%).
Compensation expense for PSUs is based on the grant date fair value of Hertz Global common stock. Certain PSUs granted in 2024 were valued on the respective grant date using a Monte Carlo simulation model that incorporated the assumptions noted in the table below. For grants issued in 2025, vesting eligibility is based on market, performance and service conditions of primarily three years. Accordingly, the number of shares issued at the end of the performance period could range between 0% and 200% of the original target award amount (100%) disclosed in the table above.
| Grants | |||||||||||||||||
| Assumption | April 2024 | June 2024 | July 2024 | ||||||||||||||
| Expected volatility | 60 | % | 65 | % | 70 | % | |||||||||||
| Expected dividend yield | — | % | — | % | — | % | |||||||||||
| Expected term (years) | 5 | 5 | 5 | ||||||||||||||
| Risk-free interest rate | 4.34 | % | 4.30 | % | 4.17 | % | |||||||||||
| Weighted-average grant date fair value | $ | 5.92 | $ | 1.71 | $ | 2.51 | |||||||||||
Restricted Stock and Restricted Stock Units
Restricted stock and RSUs granted under the 2021 Omnibus Plan vest based on a minimum period of service or the occurrence of events specified by the Compensation Committee or Board. Restricted stock and RSUs are subject to forfeiture until vested. Compensation expense for RSUs is based on the grant date fair value, and is recognized ratably over the vesting period. RSU grants issued in 2024 vest ratably over a period of primarily three years.
A summary of RSU activity as of and for the year ended December 31, 2025 under the 2021 Omnibus Plan is presented below:
| Shares | Weighted- Average Fair Value | Aggregate Intrinsic Value (In millions) | |||||||||||||||
Outstanding as of January 1, 2025 | 21,110,387 | $ | 5.92 | $ | 77 | ||||||||||||
| Granted | 15,789,006 | 4.45 | — | ||||||||||||||
| Vested | (6,888,090) | 6.43 | — | ||||||||||||||
| Forfeited or Expired | (3,994,025) | 5.50 | — | ||||||||||||||
Outstanding as of December 31, 2025 | 26,017,278 | 4.96 | 134 | ||||||||||||||
Additional information pertaining to RSU activity under the 2021 Omnibus Plan is as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Total fair value of awards that vested (in millions) | $ | 44 | $ | 31 | $ | 27 | |||||||||||
| Weighted-average grant-date fair value of awards granted | $ | 4.45 | $ | 5.09 | $ | 13.87 | |||||||||||
Deferred Stock Units
Each deferred stock unit granted under the 2021 Omnibus Plan represents a contractual right to receive a stated number of shares of common stock of the Company or if provided by the Compensation Committee or Board in accordance with the 2021 Omnibus Plan on or after the grant date, cash equal to the fair value of such shares of common stock or any combination of shares of common stock and cash having an aggregate fair market value equal to such stated number of shares of common stock, on a specified future date. As of December 31, 2025 and 2024, there were approximately 376,000 and 234,000 outstanding shares, respectively, of deferred stock units under the 2021 Omnibus Plan.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 12, 2024 | |
| 2022 | Feb 7, 2023 | |
| 2021 | Feb 23, 2022 | |
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.