IREN LtdIREN
IREN Ltd Stock Compensation Disclosure
Note 20. Stock-based compensation
The Group has entered into a number of stock-based compensation arrangements. Details of these arrangements, which are considered as options for accounting purposes, are described below:
Employee Share Plans
The Group’s Employee Share Plans are loan-funded share schemes. These loan-funded shares generally vest subject to satisfying employment service periods (and in some cases, non-market-based performance milestones). The employment service periods are generally met in three equal tranches on the third, fourth and fifth anniversary of the grant date. Under this scheme, the Company issues a limited recourse loan (that has a maximum term of up to 9 years and 11 months) to employees for the sole purpose of acquiring shares in the Company. Upon disposal of any loan-funded shares by employees, the aggregate purchase price for the shares shall be applied by the Company to pay down the outstanding loan payable.
The recourse on the loan is limited to the lower of the initial amount of the loan granted to the employee and the proceeds from the sale of the underlying shares. Employees are entitled to exercise the voting and dividend rights attached to the shares from the date of allocation. If the employee leaves the Company within the vesting period, the shares may be bought back by the Company at the original issue price and the loan is repaid. Loan-funded shares have been treated as options as required under ASC 718. Vesting of instruments granted under the Employee Share Plans are dependent on specific service thresholds being met by the employee.
2021 Executive Director Liquidity and Price Target Options
On January 20, 2021, the Board approved the grant of 1,000,000 options each to entities controlled by Daniel Roberts and William Roberts (each an Executive Director) to acquire ordinary shares at an exercise price of $3.266 (A$5.005) with an expiration date of December 20, 2025. All ‘Executive Director Liquidity and Price Target Options’ vested on completion of the IPO on 17 November 2021.
Employee Option Plan
The Board approved an Employee Option Plan on July 28, 2021. The terms of the Employee Option Plan are substantially similar to the Employee Share Plan, with the main difference being that the incentives are issued in the form of options and loans are not provided to participants. If the employee leaves the Company within the vesting period of the options granted, the Board retains the absolute discretion to cancel any unvested options held by the employee. Vesting of options granted under the Employee Option Plan is generally dependent on specific service thresholds being met by the employee.
Non-Executive Director Option Plan
The Board approved a Non-Executive Director Option Plan ("NED Option Plan") on July 28, 2021. The terms of the NED Option Plan are substantially similar to the Employee Option Plan. Vesting of instruments granted under the NED Option Plan is dependent on specific service thresholds being met by the Non-Executive Director. Where an option holder ceases to be a Director of the Company within the vesting period, the options granted to that Director will vest on a pro-rata basis of the associated service period. The Board retains the absolute discretion to cancel any remaining unvested options held by the option holder.
$75 Exercise Price Options
On August 18, 2021, the Group’s shareholders approved the grant of 2,400,000 long-term options each to entities controlled by Daniel Roberts and William Roberts to acquire ordinary shares at an exercise price of $75 per option ("$75 Exercise Price Options"). These options were granted on September 14, 2021, and have a contractual exercise period of 12 years.
The options are subject to customary adjustments to reflect any reorganization of the Company’s capital, as well as adjustments to vesting thresholds including any future issuance of ordinary shares by the Company.
The $75 Exercise Price Options will vest in four tranches following listing of the Company, if the relevant ordinary share price is equal to or exceeds the corresponding vesting threshold and the relevant executive director has not voluntarily resigned as a director of the Company. The initial vesting thresholds are detailed below based on a fully diluted share count as of the grant date of 43,345,056 ordinary shares:
•If the VWAP of an ordinary share over the immediately preceding 20 trading days is equal to or exceeds $370: 600,000 Long-term Target Options will vest
•If the VWAP of an ordinary share over the immediately preceding 20 trading days is equal to or exceeds $650: 600,000 Long-term Target Options will vest
•If the VWAP of an ordinary share over the immediately preceding 20 trading days is equal to or exceeds $925: 600,000 Long-term Target Options will vest
•If the VWAP of an ordinary share over the immediately preceding 20 trading days is equal to or exceeds $1,850: 600,000 Long-term Target Options will vest
The VWAP vesting thresholds may also be triggered by a sale or takeover of the Company based upon the price per ordinary share received in such transaction. The option holder is entitled to receive in its capacity as a holder of the options, a distribution paid by the Company per ordinary share as if the vested options were exercised and ordinary shares issued to the option holder at the relevant time of such distribution.
2022 Long-Term Incentive Plan Restricted Stock Units ("2022 LTIP")
In June 2022, the Board approved a new long term incentive plan under which participating employees generally have been granted RSUs in two equal tranches after and four years of continued service, including a portion the vesting of which is also subject to the achievement of specified performance goals over this time period. RSUs issued under the new long term incentive plan are subject to other terms and conditions contained in the plan.
Under the terms of the plan, the Board maintains sole discretion over the administration, eligibility and vesting criteria of instruments issued under the 2022 LTIP.
2023 Long-Term Incentive Plan Restricted Stock Units ("2023 LTIP")
In June 2023, the Board approved a revised long term incentive plan under which participating employees have been granted RSUs in three tranches, the first two tranches being time-based vesting conditions and the third tranche being performance-based vesting conditions. RSUs issued under the revised long term incentive plan are subject to other terms and conditions contained in the plan.
Under the terms of the plan, the Board maintains sole discretion over the administration, eligibility and vesting criteria of instruments issued under the 2023 LTIP.
The Group’s stock-based compensation expense recognized during the years ended June 30, 2025, 2024, and 2023 is included in selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (loss) as follows:
| (in USD thousands) | Years ended June 30, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Stock options | $ | 12,431 | $ | 12,885 | $ | 12,331 | |||||||||||
| Service-based RSUs | 28,223 | 9,400 | 1,633 | ||||||||||||||
| Performance-based RSUs | 1,988 | 1,351 | 392 | ||||||||||||||
| Total stock-based compensation | $ | 42,642 | $ | 23,636 | $ | 14,356 | |||||||||||
June 30, 2023 - Stock-based Compensation Activity
During the year ended June 30, 2023, the following grants were made under the 2022 LTIP:
•1,594,215 RSUs to certain employees and key management personnel (‘KMP’) of the Group were issued RSUs of which 50% of each individual’s RSU grant will vest after 3.25 years and the remaining 50% will vest after 4.25 years, subject to the following criteria which is tested at the end of each respective vesting period:
•80% vesting based on continued service with the Group over the vesting period; and
•20% vesting based on total shareholder return (‘TSR’) against a peer group of Nasdaq listed entities (and continued service over the vesting period).
•305,630 RSUs to the nominated entity of each of Daniel Roberts and William Roberts which are subject to a sole vesting condition and will immediately vest when the daily closing share price of the of the ordinary shares of Company exceeds $28 for 10 trading days out of any 15 consecutive full trading day period following the grant date (these RSUs were subsequently modified in May 2025. Refer to “Modification of RSUs” below).
•Daniel Roberts and William Roberts also received a Co-Founder and Co-Chief Executive Officer grant of 713,166 to each of the nominated entity, which have time-based vesting conditions and will vest, in three equal tranches on July 1, 2024, July 1, 2025 and July 1, 2026.
•108,559 RSUs to certain Non-Executive Directors. These RSUs vested within 10 days of the release of the consolidated Group financial statements for the year ended June 30, 2023.
During the years ended June 30, 2025 and 2024, there were no grants made under the 2022 LTIP.
June 30, 2024 - Stock-Based Compensation Activity
During the year ended June 30, 2024, the following grants were made under the 2023 LTIP:
•3,194,491 RSUs to certain employees of the Group were issued RSUs of which:
•809,883 RSUs are subject to time-based vesting conditions and will vest after one year;
•809,883 RSUs are subject to time-based vesting conditions and will vest after two years;
•1,574,725 RSUs are subject to market vesting conditions and will vest after three years based on total shareholder return measured against the Nasdaq Small Cap Index ("NQUSS") (and continued service over the vesting period).
•120,303 RSUs to certain Non-Executive Directors. These RSUs vested in September 2024.
June 30, 2025 - Stock-Based Compensation Activity
Restricted stock units with service conditions
Stock-based compensation expense related to share-settled RSUs with service conditions is based on the fair value of the Group’s Ordinary shares on the date of grant. The Group recognizes stock-based compensation expense associated with such share-settled RSU awards on a graded basis over the awards’ service-based vesting tranches.
The following table presents a summary of activity for the RSUs with service conditions under all plans during the year ended June 30, 2025:
(in USD thousands, except share and per share amounts) | Number of units | Weighted average grant-date fair value | Aggregate intrinsic value | ||||||||||||||
Unvested as of June 30, 2024 | 4,210,400 | $ | 3.95 | $ | 47,535 | ||||||||||||
| Granted | 10,001,088 | 9.70 | |||||||||||||||
| Modified | 2,579,448 | 4.37 | |||||||||||||||
| Forfeited | (45,716) | 6.51 | |||||||||||||||
| Exercised | (1,177,953) | 4.22 | |||||||||||||||
Unvested as of June 30, 2025 | 15,567,267 | $ | 7.68 | $ | 226,815 | ||||||||||||
The Group had approximately $102,085,000 of total unrecognized compensation expense related to unvested service condition RSUs granted, which is expected to be recognized over a weighted-average remaining vesting period of approximately 1.37 years.
Restricted stock units with market conditions
Stock-based compensation expense related to share-settled RSUs with market conditions is based on the Monte Carlo valuation method, which utilizes multiple input variables to determine the probability of the Company achieving the market condition and the fair value of the award. Compensation expense is recognized on a graded basis over the performance period regardless of whether the market condition and requisite service period are met.
The following table presents a summary of activity for the RSUs with market conditions under all plans during the year ended June 30, 2025:
(in USD thousands, except share and per share amounts) | Number of units | Weighted average grant-date fair value | Aggregate intrinsic value | ||||||||||||||
Unvested as of June 30, 2024 | 2,402,247 | $ | 2.31 | $ | 27,121 | ||||||||||||
| Granted | 6,373,418 | 6.93 | |||||||||||||||
| Modified | (2,579,448) | 6.61 | |||||||||||||||
| Forfeited | (37,650) | 3.98 | |||||||||||||||
| Exercised | — | — | |||||||||||||||
Unvested as of June 30, 2025 | 6,158,567 | $ | 5.28 | $ | 89,730 | ||||||||||||
During the year ended June 30, 2025, the Group issued the following RSUs with market conditions:
•342,945 RSUs which are scheduled to vest after three years based on total shareholder return measured against the NQUSS (and continued service over the vesting period).
•1,968,188 RSUs which are scheduled to vest in tranches based on various share price hurdles ranging from $20-$50. These RSUs were subsequently modified, refer to “Modification of RSUs”.
•4,064,724 RSUs which are scheduled to vest in equal tranches based on various share price hurdles ranging from $20-$50.
The Group had approximately $28,846,000 of total unrecognized compensation expense related to unvested market condition RSUs granted, which is expected to be recognized over a weighted-average remaining vesting period of approximately 4.36 years.
Modification of RSUs
In May 2025, the Board approved to modify a total of 2,579,448 market based RSUs previously granted to two participants under the 2022 LTIP and 2023 LTIP. The modification removed the market-based condition, replacing it with service-based conditions which are scheduled to vest in two equal tranches on 18 November 2025 and 18 May 2026. The modification resulted in a total incremental compensation cost of $11,300,000, which will be recognized over the modified vesting period. In addition, the remaining unrecognized compensation cost of $12,200,000 related to the original RSUs will also be recognized over the modified vesting period.
As of June 30, 2025, the Group had an aggregate of 9,870,552 shares of Ordinary shares reserved for future issuance under the 2023 LTIP.
Stock options
The following table presents a summary of the option activity under all plans
| (in USD thousands, except share and per share amounts and years) | Number of shares | Weighted average exercise price (per share) | Aggregate intrinsic value | Weighted average remaining contractual life (in years) | |||||||||||||||||||
Outstanding as of June 30, 2024 | 8,484,011 | $ | 43.97 | $ | 25,244 | 6.56 | |||||||||||||||||
| Granted | — | — | |||||||||||||||||||||
| Forfeited or canceled | (13,299) | 1.53 | |||||||||||||||||||||
| Exercised | (592,158) | 1.54 | |||||||||||||||||||||
Outstanding as of June 30, 2025 | 7,878,554 | $ | 47.07 | $ | 34,648 | 5.80 | |||||||||||||||||
Vested and exercisable as of June 30, 2025 | 2,972,027 | $ | 3.17 | $ | 34,072 | 1.82 | |||||||||||||||||
The Group had approximately $61,644,000 of total unrecognized compensation expense related to unvested stock options as of June 30, 2025, which is expected to be recognized over a weighted-average remaining vesting period of approximately 5.13 years.
No options were granted during the years ended June 30, 2025 and 2023. The weighted average grant-date fair value of stock options was $10.60 per option for the year ended June 30, 2024.
As of June 30, 2025 there were 4,906,527 unvested options.
Valuation methodology
The fair value of instruments issued under the Employee Share Plans have been measured using a Black-Scholes-Merton valuation model. The fair value of the Executive Director Liquidity and Price Target Options, and Long-Term Incentive Plan RSUs have been measured using a Monte-Carlo simulation. Service and non-market performance conditions attached to the arrangements were not taken into account when measuring fair value.
The following table lists the weighted average (where applicable) inputs used in measuring the fair value, as at the grant date (based on Australian Eastern Standard Time), for arrangements granted during the years ended June 30, 2025, 2024, and 2023:
| Grant date | Dividend yield | Expected volatility | Risk-free interest rate | Expected life | Grant date share price | Exercise price | Fair value | Number of options/RSUs granted | |||||||||||||||||||||||||||||||||||||||
| % | % | % | years | US$ | US$ | US$ | |||||||||||||||||||||||||||||||||||||||||
Long Term Incentive Plan | |||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
| Service RSUs | - | - | - | 2.76 | 3.34 | - | 3.34 | 2,810,261 | |||||||||||||||||||||||||||||||||||||||
| Market RSUs | - | 120 | % | 3.44 | % | 11.14 | 3.63 | - | 2.17 | 930,105 | |||||||||||||||||||||||||||||||||||||
| June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Service RSUs | - | - | - | 1.99 | 4.70 | - | 4.70 | 1,740,069 | |||||||||||||||||||||||||||||||||||||||
| Market RSUs | - | 100 | % | 4.38 | % | 3.00 | 4.67 | - | 2.41 | 1,574,725 | |||||||||||||||||||||||||||||||||||||
| June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Service RSUs | - | - | - | 1.99 | 9.70 | - | 9.70 | 10,001,088 | |||||||||||||||||||||||||||||||||||||||
| Market RSUs | - | 66 | % | 4.14 | % | 4.92 | 10.86 | - | 6.93 | 6,373,418 | |||||||||||||||||||||||||||||||||||||
| Market RSUs (at modification date) | - | 75 | % | 4.12 | % | 4.49 | 8.41 | - | 4.14 | (2,579,448) | |||||||||||||||||||||||||||||||||||||
| Service RSU (post modification) | - | - | - | 0.75 | 8.41 | - | 4.37 | 2,579,448 | |||||||||||||||||||||||||||||||||||||||
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.