Indivior Pharmaceuticals, Inc.INDV
Indivior Pharmaceuticals, Inc. Stock Compensation Disclosure
15. Stock-based compensation
The Company operates three equity-settled executive and employee long-term incentive stock plans and two other employee plans. For stock-based payment awards, the fair value at the grant date is calculated using appropriate pricing models.
Total pretax stock-based compensation cost recorded in 2025, 2024, and 2023 was $26 million, $24 million and $21 million, respectively. Income tax expense and benefits for stock-based compensation expense recognized in 2025, 2024, and 2023 were an expense of $2 million and benefits of $5 million and $3 million, respectively.
Indivior Long-Term Incentive Plan (LTIP)
In 2015, a stock-based incentive plan was introduced for employees including executive directors of the Company ("2015 Plan"). The awards are conditional upon the satisfaction of both market conditions and a service period, generally of three years. Awards granted to executive directors are subject to a further post-vesting holding period of two-years.
Awards granted in 2023 under the 2015 Plan vest based on a comparison of the share performance of the Company and the share performance of other companies (“Comparators”) within two indices: (1) The FTSE 250 and (2) the S&P 1500 Pharmaceutical and Biotech Index. The conditions are based on calculation of the Total Shareholder Return (“TSR”) for the Company and the Comparators in the FTSE 250, and the TSR for the Comparators in the S&P 1500 Pharmaceutical and Biotech Index and into what percentile the Company falls as compared to the Comparators in each index. The vesting is as follows: a threshold (12.5% payout) for 50th percentile performance and maximum (100% payout) for 75th percentile performance; with interpolation in between. If the Company's TSR falls below the 50th percentile of the index, none of the shares will vest. Equal weighting is given to the performance compared to the FTSE 250 and S&P 1500 Pharmaceutical and Biotech Index.
Awards granted in 2024 under the 2015 Plan vest based on a comparison of the share performance of the Company and the share performance of Comparators within the S&P 1500 Pharmaceutical and Biotech Index. The conditions are based on calculation of the TSR for the Company and the Comparators in the index and into what percentile the Company falls as compared to the Comparators. The vesting is as follows: a threshold (12.5% payout) for 50th percentile performance and maximum (100% payout) for 75th percentile performance; with interpolation in between. If Company's TSR falls below the 50th percentile of the index, none of the units will vest.
In 2024, the Indivior 2024 Long Term Incentive Plan was introduced for employees including executive directors of the Company ("2024 Plan"). The awards are conditional upon the satisfaction of market conditions, performance conditions, and/or a service period, generally of three years. Awards granted to executive directors are subject to a further post-vesting period of two-years.
Awards granted in 2025 under the 2024 Plan with market conditions vest based on a comparison between the share performance of the Company and the share performance of Comparators within the NASDAQ Biotechnology Index. The conditions are based on calculation of the TSR for the Company and the Comparators in the index and into what percentile the Company falls as compared to the Comparators. The vesting is as follows: a threshold (25% payout) for 25th percentile performance and maximum (100% payout) for 75th percentile performance; with interpolation in between. If the Company's TSR falls below the 25th percentile of the index, none of the shares will vest. Awards granted in 2025 with performance conditions vest based on the achievement of certain non-market performance conditions as specified in the awards.
The fair values of awards with market performance conditions granted under both the 2015 and 2024 plans are calculated using a Monte Carlo simulation method. As vesting of the LTIP award units is based on relative market conditions, an open form model such as the Monte Carlo is required to take into consideration the parameters of the awards. The key assumptions in the simulation model are share price of the Company, expected volatilities of the Company considering a combination of historic and implied volatility, risk-free rate, and dividend yield.
A summary of the service-based restricted stock units and market-based stock awards activity under the LTIP as of December 31, 2025, is presented below (values in thousands):
Outstanding Service-Based Restricted Stock Awards | Outstanding Performance-Based Stock Awards | ||||||||||
December 31, 2023 | 1,167 | 5,328 | |||||||||
| Granted | 473 | 1,304 | |||||||||
| Issued | (335) | (973) | |||||||||
| Canceled/forfeited/adjusted | (268) | (941) | |||||||||
December 31, 2024 | 1,036 | 4,717 | |||||||||
| Granted | 2,354 | 3,011 | |||||||||
| Issued | (354) | (286) | |||||||||
| Canceled/forfeited/adjusted | (922) | (2,475) | |||||||||
December 31, 2025 | 2,114 | 4,968 | |||||||||
The weighted average fair value per share of the service-based restricted stock units granted was $10.26, $19.44 and $19.25 in fiscal years 2025, 2024, and 2023, respectively, based on the fair market value at the date of grant. The total fair value of restricted stock units issued was $3 million, $12 million and $12 million in 2025, 2024, and 2023, respectively.
The weighted average fair value per share of the market-based stock awards granted per share was $8.79, $14.58 and $11.72 in fiscal years 2025, 2024, and 2023, respectively, calculated using the weighted average fair market value for each of the component goals at the date of grant. The total fair value of
market-based stock awards issued was nil, $44 million, and $44 million in fiscal years 2025, 2024, and 2023, respectively.
Total compensation cost for unvested awards not yet recognized at December 31, 2025 was approximately $19 million and $12 million for service-based restricted stock units and performance-based restricted units, respectively. Compensation cost is expected to be recognized over the remaining weighted-average period of 2 years for market-based stock awards and 1 year for service-based restricted stock units.
Other Employee Plans
The Company operates a His Majesty's Revenue and Customs approved (“HMRC-approved”) save as you earn (“SAYE”) plan for U.K. employees and U.S. Employee Share Purchase Plan (ESPP) for U.S. employees. The amounts recognized for these plans are not material for disclosure.
Stock Options
The Company did not grant any stock options in 2025, 2024, or 2023. The total fair value of stock options exercised was nil, $3 million, and nil in 2025, 2024, and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
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.