ICHOR HOLDINGS, LTD.ICHR
ICHOR HOLDINGS, LTD. Stock Compensation Disclosure
Note 9 – Share-Based Compensation | ||
2025 Plan
On March 26, 2025, the Human Capital Committee of our Board of Directors approved the Ichor Holdings, Ltd. 2025 Omnibus Incentive Plan (the "2025 Plan"). The 2025 Plan was approved by our stockholders on May 14, 2025 and allows for the issuance of 2,963,471 shares to be used for awards under the Plan, subject to the applicable adjustment and share recycling provisions set forth in the 2025 plan. The 2025 Plan replaces the Ichor Holdings, Ltd. 2016 Omnibus Incentive Plan (the "2016 Plan") in its entirety, except with respect to awards granted under the 2016 Plan prior to the effective date of the 2025 Plan.
The 2025 Omnibus Incentive Plan provides for grants of share‑based awards to employees, directors, and consultants. Awards may be in the form of stock options (“options”), tandem and non‑tandem stock appreciation rights, restricted share awards or restricted share units (“RSUs”), performance awards, and other share‑based awards. We have elected to account for forfeitures of all share-based awards in share-based compensation expense prospectively as they occur. Forfeited or expired awards are returned to the incentive plan pool for future grants. Awards generally vest over four years, 25% on the first anniversary of the date of grant and quarterly thereafter over the remaining three years. Upon vesting of RSUs, shares are withheld to cover statutory minimum withholding taxes. Shares withheld are not reflected as an issuance of ordinary shares within our consolidated statements of shareholders’ equity, as the shares are never issued, and the associated tax payments are reflected as financing activities within our consolidated statements of cash flows.
Share‑based compensation expense across all plans for options, RSUs, and employee share purchase rights was $16.7 million, $15.6 million, and $17.3 million during 2025, 2024, and 2023, respectively.
Stock Options
Options are valued based on the Black-Scholes-Merton model on the date of grant. The risk-free interest rate is based on U.S. Treasury rates in effect on the date of grant. Estimated volatility is based on the historical volatility of our ordinary shares. Options generally vest over 4 years, with 25% vesting on the first grant-date anniversary and the remaining vesting on a quarterly basis over the remaining 3 years. Options granted under the 2016 Plan have a contractual term of 7 years. No options have been granted under the 2025 Plan.
The following table summarizes option activity:
| Number of Stock Options | |||||||||||||||||||||||
| Service condition | Weighted average exercise price per share | Weighted average remaining contractual term | Aggregate intrinsic value | ||||||||||||||||||||
| Outstanding, December 27, 2024 | 365,085 | $ | 24.28 | ||||||||||||||||||||
| Exercised | (137,080) | $ | 24.83 | ||||||||||||||||||||
| Forfeited or expired | (14,880) | $ | 22.28 | ||||||||||||||||||||
| Outstanding, December 26, 2025 | 213,125 | $ | 24.07 | 0.7 years | $ | — | |||||||||||||||||
| Exercisable, December 26, 2025 | 213,125 | $ | 24.07 | 0.7 years | $ | — | |||||||||||||||||
The intrinsic value of options exercised are as follows:
| Year Ended | |||||||||||||||||
| December 26, 2025 | December 27, 2024 | December 29, 2023 | |||||||||||||||
| Total intrinsic value of options exercised | $ | 1,013 | $ | 3,276 | $ | 3,041 | |||||||||||
At December 26, 2025, there was no unrecognized share-based compensation expense relating to options.
Restricted Share Units
RSUs that vest pursuant to a service condition and performance condition are valued based on the closing market price of our ordinary shares on the date of grant. RSUs that vest pursuant to a service condition only generally vest over 4 years, with 25% vesting on the first grant-date anniversary and the remaining vesting on a quarterly basis over the remaining 3 years. RSUs that vest pursuant to a performance condition are generally earned over 3 years, depending on the achievement of certain financial and non-financial targets, and vest at the end of the three year measurement period. RSUs that vest pursuant to a market condition are valued based on a Monte Carlo simulation model as of the date of grant, are generally earned over 3 years based on a relative total shareholder return model, and vest at the end of the three year measurement period. Upon vesting of RSUs, employees may elect to have shares withheld to cover statutory minimum withholding taxes. Shares withheld are not reflected as an issuance of ordinary shares within our consolidated statements of shareholders’ equity, as the shares were never issued, and the associated tax payments are reflected as financing activities within our consolidated statements of cash flows.
The following table summarizes RSU activity:
| Number of RSUs | |||||||||||||||||||||||
| Service condition | Performance condition | Market condition | Weighted average grant-date fair value per share | ||||||||||||||||||||
| Unvested, December 27, 2024 | 1,031,455 | 178,610 | 201,841 | $ | 33.92 | ||||||||||||||||||
| Granted | 843,706 | 109,946 | 109,951 | $ | 18.17 | ||||||||||||||||||
| Vested | (439,868) | (23,150) | (44,191) | $ | 32.25 | ||||||||||||||||||
| Forfeited | (165,182) | (14,418) | (13,459) | $ | 28.25 | ||||||||||||||||||
| Unvested, December 26, 2025 | 1,270,111 | 250,988 | 254,142 | $ | 25.57 | ||||||||||||||||||
Fair value information for RSUs granted and vested is as follows:
| Year Ended | |||||||||||||||||
| December 26, 2025 | December 27, 2024 | December 29, 2023 | |||||||||||||||
| Weighted average grant-date fair value per share of RSUs granted | $ | 18.17 | $ | 39.61 | $ | 30.70 | |||||||||||
| Total grant-date fair value of shares vested | $ | 16,356 | $ | 14,177 | $ | 11,550 | |||||||||||
At December 26, 2025, total unrecognized share-based compensation expense relating to RSUs was $30.1 million, with a weighted average remaining service period of 2.5 years.
The table below sets forth the weighted average assumptions in the Monte Carlo simulation model used to measure the fair value of RSUs that vest pursuant to a market condition. Expected volatility is based on the historical volatility of our ordinary shares and our peer group for the relative expected term. We believe this approach is reflective of current and historical market conditions and is an appropriate indicator of expected volatility. The risk-free interest rate is based on U.S. government treasury rates in effect on the date of grant with a term equal to the expected term of the award, which is equal to the period of time between the grant date and the date the award is expected to vest.
| Year Ended | |||||||||||||||||
| December 26, 2025 | December 27, 2024 | December 29, 2023 | |||||||||||||||
| Weighted average expected term | 2.4 Years | 2.6 Years | 2.6 Years | ||||||||||||||
| Risk-free interest rate | 3.8% | 4.5% | 4.0% | ||||||||||||||
| Dividend yield | 0.0% | 0.0% | 0.0% | ||||||||||||||
| Volatility | 67.3% | 59.2% | 61.4% | ||||||||||||||
2017 ESPP
In May 2017, we adopted the 2017 Employee Stock Purchase Plan (the “2017 ESPP”). The 2017 ESPP grants employees the ability to designate a portion of their base-pay to purchase ordinary shares at a price equal to 85% of the fair market value of our ordinary shares on the first or last day of each 6 month purchase period. Purchase periods begin on January 1 or July 1 and end on June 30 or December 31, or the next business day if such date is not a business day. Shares are purchased on the last day of the purchase period. As of December 26, 2025, 2.0 million ordinary shares remained eligible for issuance under the 2017 ESPP.
The table below sets forth the weighted average assumptions used to measure the fair value of 2017 ESPP rights:
| Year Ended | |||||||||||||||||
| December 26, 2025 | December 27, 2024 | December 29, 2023 | |||||||||||||||
| Weighted average expected term | 0.5 years | 0.5 years | 0.5 years | ||||||||||||||
| Risk-free interest rate | 4.3% | 5.3% | 5.1% | ||||||||||||||
| Dividend yield | 0.0% | 0.0% | 0.0% | ||||||||||||||
| Volatility | 63.1% | 60.4% | 63.4% | ||||||||||||||
We recognize share-based compensation expense associated with the 2017 ESPP over the duration of the purchase period. We recognized $1.3 million, $1.0 million, and $0.9 million of share-based compensation expense associated with the 2017 ESPP during 2025, 2024, and 2023, respectively. At December 26, 2025, there was no unrecognized share-based compensation expense related to the 2017 ESPP.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 5, 2021 | |
| 2019 | Mar 6, 2020 | |
| 2018 | Mar 8, 2019 | |
| 2017 | Mar 13, 2018 | |
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.