InnovAge Holding Corp.INNV
InnovAge Holding Corp. Stock Compensation Disclosure
Stock-based Compensation
The total unrecognized compensation cost related to performance-based vesting stock options outstanding as of June 30, 2025, was $0.2 million and is expected to be recognized over a weighted-average period of 1.5 years.
A summary of our aggregate stock-based compensation expense is set forth below. Stock-based compensation expense is included in corporate, general and administrative expenses on our consolidated statements of operations.
| Year ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| in thousands | |||||||||||
| Stock options | $ | 669 | $ | 802 | |||||||
| Profits interests units | 667 | 861 | |||||||||
| Restricted stock units | 6,283 | 5,169 | |||||||||
| Total stock-based compensation expense | $ | 7,619 | $ | 6,832 | |||||||
2020 Equity Incentive Plan
Profits Interests
TCO Group Holdings, L.P. (the “LP”), the Company’s largest shareholder and prior to the IPO, the Company’s parent, maintains the TCO Group Holdings, L.P. Equity Incentive Plan (the “2020 Equity Incentive Plan”) pursuant to which interests in the LP in the form of Class B Units (profits interests) may be granted to employees, directors, consultants, advisers, and other services providers (including partners) of the LP or any of its affiliates, including the Company. A maximum number of 16,162,177 Class B Units are authorized for grant under the 2020 Equity Incentive Plan. Both performance-based and time-based units were issued under the plan. As of June 30, 2025, a total of 15,872,837 profits interests units have been granted under the 2020 Equity Incentive Plan.
The Company used the Monte Carlo option model to determine the fair value of the granted profits interests units at the time of the grant. Expected stock price volatility is based on consideration of indications observed from several publicly traded peer companies. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the unit. The dividend yield percentage is zero because the Company neither currently pays dividends nor intends to do so during the expected term. The expected term of the units represents the time the units are expected to be outstanding. During the fiscal year ended June 30, 2024, a total of 2,213,700 Class B Units were awarded to the Company's
Chief Executive Officer, Chief Financial Officer, and Chief Legal Officer. The assumptions under the Monte Carlo model related to the profits interests units for fiscal year 2024, presented on a weighted-average basis, are provided below:
| 2024 | |||||||||||
| Expected volatility | 68.0 - 76.0 | % | |||||||||
| Expected life (years) - time vesting units | 2.7 - 3.1 | ||||||||||
| Interest rate | 4.23 - 4.57 | % | |||||||||
| Dividend yield | — | ||||||||||
| Weighted-average fair value | $ | 1.59 - 2.17 | |||||||||
| Fair value of underlying stock | $ | 5.52 - 7.27 | |||||||||
During the fiscal year ended June 30, 2025, a total of 650,000 Class B Units were awarded to the Company’s President and Chief Operating Officer. The assumptions under the Monte Carlo model related to profit interests units, presented on a weighted-average basis, are provided below:
| 2025 | |||||||||||
| Expected volatility | 63.0 | % | % | ||||||||
| Expected life (years) - time vesting units | 1.8 | ||||||||||
| Interest rate | 4.18 | % | |||||||||
| Dividend yield | — | ||||||||||
| Weighted-average fair value | $ | 1.43 | |||||||||
| Fair value of underlying stock | $ | 5.67 | |||||||||
A summary of profits interests activity for the year ended June 30, 2025, was as follows:
| Time-based unit awards | Number of units | Weighted average grant date fair value | ||||||||||||
| Outstanding balance, June 30, 2024 | 1,287,113 | $ | 5.52 | |||||||||||
| Granted | 325,000 | $ | 5.67 | |||||||||||
| Forfeited | — | $ | — | |||||||||||
| Vested | (433,917) | $ | 1.30 | |||||||||||
| Outstanding balance, June 30, 2025 | 1,178,196 | $ | 7.12 | |||||||||||
| Performance-based unit awards | Number of units | Weighted average grant date fair value | ||||||||||||
| Outstanding balance, June 30, 2024 | 1,371,671 | $ | 1.55 | |||||||||||
| Granted | 325,000 | $ | 0.99 | |||||||||||
| Forfeited | — | $ | — | |||||||||||
| Vested | — | $ | — | |||||||||||
| Outstanding balance, June 30, 2025 | 1,696,671 | $ | 1.44 | |||||||||||
The total unrecognized compensation cost related to profits interests units outstanding as of June 30, 2025 was $4.0 million, comprised (i) $1.5 million related to time-based unit awards expected to be recognized over a weighted-average period of 2.9 years and (ii) $2.5 million related to performance-based unit awards, which will be recorded when it is probable that the performance-based criteria will be met.
2021 Omnibus Incentive Plan
In March 2021, the Compensation Committee of the Board approved the InnovAge Holding Corp. 2021 Omnibus Incentive Plan (“2021 Omnibus Incentive Plan”), pursuant to which various stock-based awards may be granted to
employees, directors, consultants, and advisers. The total number of shares of the Company’s common stock authorized under the 2021 Omnibus Incentive Plan is 14,700,000. The Company has issued time-based restricted stock units under this plan to its employees which generally vest over a three-year period with one-third vesting on each anniversary of the date of grant. Certain other vesting periods have also been used. The grant date fair value of restricted stock units with time-based vesting is based on the closing market price of our common stock on the date of grant. Certain other awards, including units and stock options under this plan vest upon achieving specific share price performance criteria and are determined to have performance-based vesting conditions. The Company has also issued time-based vesting stock options under this plan to its employees which generally vest in equal parts over a three-year period.
Restricted Stock Units
A summary of time-based vesting restricted stock units activity for the year ended June 30, 2025, was as follows:
| Restricted stock units - time based | Number of awards | Weighted average grant-date fair value per share | ||||||||||||
| Outstanding balance, June 30, 2024 | 2,864,319 | $ | 8.15 | |||||||||||
| Forfeited | (511,454) | $ | 5.47 | |||||||||||
| Vested | (1,153,471) | $ | 4.00 | |||||||||||
| Granted | 228,598 | $ | 4.84 | |||||||||||
| Outstanding balance, June 30, 2025 | 1,427,992 | $ | 11.92 | |||||||||||
The total unrecognized compensation cost related to time-based restricted stock units outstanding as of June 30, 2025, was $5.0 million and is expected to be recognized over a weighted-average period of 1.4 years.
A summary of performance-based vesting restricted stock units activity for the year ended June 30, 2025, was as follows:
| Restricted stock units - performance based | Number of awards | Weighted average grant-date fair value per share | ||||||||||||
| Outstanding balance, June 30, 2024 | 258,767 | $ | 5.18 | |||||||||||
| Forfeited | — | $ | — | |||||||||||
| Vested | — | $ | — | |||||||||||
| Granted | — | $ | — | |||||||||||
| Outstanding balance, June 30, 2025 | 258,767 | $ | 5.18 | |||||||||||
The total unrecognized compensation cost related to performance-based vesting restricted stock units outstanding as of June 30, 2025, was $0.1 million and is expected to be recognized over a weighted-average period of 1.8 years.
Nonqualified Stock Options
A summary of time-based vesting stock option activity for the year ended June 30, 2025, was as follows:
| Stock options - time based | Number of awards | Weighted average grant-date fair value per share | ||||||||||||
| Outstanding balance, June 30, 2024 | 554,499 | $ | 1.77 | |||||||||||
| Granted | — | $ | — | |||||||||||
| Forfeited | — | $ | — | |||||||||||
| Exercised | — | $ | — | |||||||||||
| Expired | — | $ | — | |||||||||||
| Outstanding balance, June 30, 2025 | 554,499 | $ | 1.77 | |||||||||||
| Exercisable balance, June 30, 2025 | 485,184 | $ | 0.15 | |||||||||||
The total unrecognized compensation costs related to time-based vesting stock options outstanding as of June 30, 2025, was $0.01 million and is expected to be recognized over a weighted-average period of 0.2 years.
A summary of performance-based vesting stock option activity for the year ended June 30, 2025, was as follows:
| Stock options - performance based | Number of awards | Weighted average grant-date fair value per share | ||||||||||||
| Outstanding balance, June 30, 2024 | 776,299 | $ | 3.08 | |||||||||||
| Granted | — | $ | — | |||||||||||
| Forfeited | — | $ | — | |||||||||||
| Vested | — | $ | — | |||||||||||
| Outstanding balance, June 30, 2025 | 776,299 | $ | 3.08 | |||||||||||
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.