Summit Hotel Properties, Inc.INN
Summit Hotel Properties, Inc. Stock Compensation Disclosure
EQUITY-BASED COMPENSATION
Our currently outstanding equity-based awards were issued under the Equity Plan which provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, and other equity-based awards or incentive awards.
Stock options granted may be either incentive stock options or non-qualified stock options. Vesting terms may vary with each grant, and stock option terms are generally to ten years. We currently have no outstanding stock options. We have outstanding equity-based awards in the form of restricted stock awards. All of our outstanding equity-based awards are classified as equity.
Time-Based Restricted Stock Awards Made Pursuant to Our Equity Plan
The following table summarizes time-based restricted stock activity under our Equity Plan for 2025, 2024 and 2023:
| Number of Shares | Weighted Average Grant Date Fair Value per Share | Aggregate Current Value (in thousands) | ||||||||||||||||||
| Non-vested December 31, 2022 | 654,804 | $ | 9.85 | |||||||||||||||||
| Granted | 449,148 | 7.71 | ||||||||||||||||||
| Vested | (238,883) | 8.04 | ||||||||||||||||||
| Forfeited | (3,356) | 8.20 | ||||||||||||||||||
| Non-vested December 31, 2023 | 861,713 | 8.79 | ||||||||||||||||||
| Granted | 735,462 | 6.49 | ||||||||||||||||||
| Vested | (369,312) | 9.24 | ||||||||||||||||||
| Forfeited | (75,040) | 7.26 | ||||||||||||||||||
| Non-vested December 31, 2024 | 1,152,823 | 7.28 | ||||||||||||||||||
| Granted | 693,020 | 6.63 | ||||||||||||||||||
| Vested | (421,535) | 8.06 | ||||||||||||||||||
| Forfeited | (38,126) | 6.67 | ||||||||||||||||||
| Non-vested December 31, 2025 | 1,386,182 | $ | 6.73 | $ | 6,751 | |||||||||||||||
The awards granted to our non-executive employees prior to 2022 vested over a four-year period based on continuous service (20% on the first, second and third anniversary of the grant date and 40% on the fourth anniversary of the grant date). The awards granted to our non-executive employees in 2022 and thereafter vest over a three-year period based on continuous service (25% on the first and second anniversary of the grant date and 50% on the third anniversary of the grant date).
The awards granted to our executive officers vest over a three-year period based (25% on the first and second anniversary of the grant date and 50% on the third anniversary of the grant date), subject to continued service through the applicable vesting date, except in the case of certain terminations of employment or in certain circumstances upon a change in control and are subject to the other conditions described in the Equity Plan or award document.
The holders of these awards have the right to vote the related shares of Common Stock and receive all dividends declared and paid whether or not vested. The fair value of time-based restricted stock awards granted is calculated based on the market value of our Common Stock on the date of grant.
During the years ended December 31, 2025, 2024, and 2023, the total fair value of time-based restricted stock awards that vested was $2.8 million, $2.4 million and $3.6 million, respectively.
Performance-Based Restricted Stock Awards Made Pursuant to Our Equity Plan
The following table summarizes performance-based restricted stock activity under our Equity Plan for 2025, 2024 and 2023:
| Number of Shares | Weighted Average Grant Date Fair Value per Share | Aggregate Current Value | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Non-vested December 31, 2022 | 1,006,974 | $ | 11.76 | |||||||||||||||||
| Granted | 425,907 | 10.08 | ||||||||||||||||||
| Vested | (239,416) | 9.38 | ||||||||||||||||||
| Forfeited | (137,193) | 9.38 | ||||||||||||||||||
| Non-vested December 31, 2023 | 1,056,272 | 11.93 | ||||||||||||||||||
| Granted | 507,406 | 7.41 | ||||||||||||||||||
| Forfeited | (323,930) | 14.05 | ||||||||||||||||||
| Non-vested December 31, 2024 | 1,239,748 | 9.53 | ||||||||||||||||||
| Granted | 576,475 | 7.66 | ||||||||||||||||||
| Vested | (154,397) | 12.26 | ||||||||||||||||||
| Forfeited | (152,038) | 12.26 | ||||||||||||||||||
| Non-vested December 31, 2025 | 1,509,788 | $ | 8.26 | $ | 7,353 | |||||||||||||||
Our performance-based restricted stock awards are market-based awards and are accounted for based on the fair value of our Common Stock on the grant date. The fair value of the performance-based restricted stock awards granted was estimated using a Monte Carlo simulation valuation model. These awards generally vest over a three-year period based on our total shareholder return relative to the total shareholder return of certain companies within the Dow Jones U.S. Hotels Index (or in the event such index is discontinued, or its methodology significantly changed, a comparable index selected by the Compensation Committee of the Board) at the end of the period or upon a change in control. The awards require continued service during the measurement period, except in the case of certain terminations of employment or in the case of a change in control and are subject to the other conditions described in the Equity Plan or award document.
The number of shares the executive officers may earn under these awards range from zero shares to twice the number of shares granted based on our percentile ranking within the index at the end of the measurement period. In addition, a portion of the performance-based shares may be earned based on the Company's absolute total shareholder return calculated during the performance period.
The holders of these grants have the right to vote the granted shares of Common Stock, and any dividends declared will be accumulated and will be subject to the same vesting conditions as the awards. Further, if additional shares are earned based on our percentile ranking within the index, dividend payments will be issued as if the additional shares had been held throughout the measurement period.
The fair value of performance-based restricted stock awards granted was estimated using a Monte Carlo simulation valuation model and the following assumptions:
For the Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Expected dividend yield | 4.71 | % | 4.86 | % | 3.90 | % | ||||||||||||||
| Expected stock price volatility | 35.4 | % | 37.2 | % | 67.6 | % | ||||||||||||||
| Risk-free interest rate | 3.97 | % | 4.21 | % | 4.66 | % | ||||||||||||||
| Monte Carlo iterations | 100,000 | 100,000 | 100,000 | |||||||||||||||||
| Weighted average estimated fair value of performance-based restricted stock awards | $ | 7.66 | $ | 7.41 | $ | 10.08 | ||||||||||||||
The expected dividend yield was calculated based on our annual expected dividend payments at the time of grant. The expected volatility was based on historical price changes of our Common Stock for a period comparable to the performance period. The risk-free interest rates were interpolated from the Federal Reserve Bond Equivalent Yield rates for “on-the-run” U.S. Treasury securities.
Director Stock Awards Made Pursuant to Our Equity Plan
During the years ended December 31, 2025, 2024, and 2023 we granted 189,826, 127,491 and 113,141 shares of Common Stock, respectively, to our non-employee directors as a part of our director compensation program. These grants were made pursuant to our Equity Plan and vest immediately upon grant.
Equity-Based Compensation Expense
Equity-based compensation expense included in Corporate General and Administrative expense in the Consolidated Statements of Operations was as follows (in thousands):
For the Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Time-based restricted stock | $ | 3,907 | $ | 3,424 | $ | 3,260 | ||||||||||||||
| Performance-based restricted stock | 4,110 | 3,941 | 3,727 | |||||||||||||||||
| Director stock | 776 | 767 | 755 | |||||||||||||||||
| $ | 8,793 | $ | 8,132 | $ | 7,742 | |||||||||||||||
We recognize equity-based compensation expense ratably over the vesting terms. The amount of expense may be subject to adjustment in future periods due to a change in the forfeiture assumptions.
Unrecognized equity-based compensation expense for all non-vested awards pursuant to our Equity Plan was $10.2 million at December 31, 2025 as follows (in thousands):
| Total | 2026 | 2027 | 2028 | |||||||||||||||||||||||
| Time-based restricted stock | $ | 5,294 | $ | 3,155 | $ | 1,879 | $ | 260 | ||||||||||||||||||
| Performance-based restricted stock | 4,952 | 2,982 | 1,697 | 273 | ||||||||||||||||||||||
| $ | 10,246 | $ | 6,137 | $ | 3,576 | $ | 533 | |||||||||||||||||||
Our restricted stock awards are expected to be recognized over a remaining weighted-average period of 1.42 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2017 | Feb 21, 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.