Jazz Pharmaceuticals plcJAZZ
Jazz Pharmaceuticals plc Stock Compensation Disclosure
Share-Based Compensation
GW Incentive Plans
On May 5, 2021, we acquired the entire issued share capital of GW. In connection with the GW Acquisition, we assumed the GW Incentive Plans. The terms of the GW Incentive Plans provide for the grant of stock options, stock appreciation rights,
RSUs, other stock awards, and performance awards that may be settled in cash, shares, or other property. Ordinary shares granted to employees in exchange for American Depositary Shares of GW, in connection with the GW Acquisition, vested ratably over a service period of two years, while all post-acquisition grants vest ratably over service periods of four years and expire no more than 10 years after the date of grant. As of December 31, 2025, a total of 1,864,475 of our ordinary shares had been authorized for issuance under the GW Incentive Plans.
2011 Plan
In connection with the Azur Merger, Jazz Pharmaceuticals, Inc.’s board of directors adopted the 2011 Plan in October 2011, and its stockholders approved the 2011 Plan at the special meeting of the stockholders held in December 2011. The 2011 Plan became effective immediately before the consummation of the Azur Merger and was assumed and adopted by us upon the consummation of the Azur Merger. The terms of the 2011 Plan provide for the grant of stock options, stock appreciation rights, RSUs, other stock awards, and performance awards that may be settled in cash, shares, or other property. All outstanding grants under the 2011 Plan were granted to employees and vest ratably over service periods of four years and expire no more than 10 years after the date of grant. As of December 31, 2025, a total of 34,836,988 of our ordinary shares had been authorized for issuance under the 2011 Plan.
ESPP
In 2007, Jazz Pharmaceuticals, Inc.’s employees became eligible to participate in the ESPP. The ESPP was amended and restated by Jazz Pharmaceuticals, Inc.’s board of directors in October 2011 and approved by its stockholders in December 2011. The amended and restated ESPP became effective immediately prior to the effective time of the Azur Merger and was assumed by us upon the consummation of the Azur Merger. The amended and restated ESPP allows our eligible employee participants (including employees of any parent or subsidiary company if our board of directors designates such company as eligible to participate) to purchase our ordinary shares at a discount of 15% through payroll deductions. The ESPP consists of a fixed offering period of 24 months with four purchase periods within each offering period. The number of shares available for issuance under our ESPP during any six-month purchase period is 175,000 shares. As of December 31, 2025, a total of 7,029,250 of our ordinary shares had been authorized for issuance under the ESPP.
2007 Directors Award Plan
The 2007 Directors Award Plan, which was initially adopted by the Jazz Pharmaceuticals, Inc. board of directors and approved by the Jazz Pharmaceuticals, Inc. stockholders in connection with its initial public offering, was continued and assumed by us upon the consummation of the Azur Merger. Until October 2011, the 2007 Directors Award Plan provided for the automatic grant of stock options to purchase shares of Jazz Pharmaceuticals, Inc.’s common stock to its non-employee directors initially at the time any individual first became a non-employee director, which vest over three years, and then annually over their period of service on its board of directors, which vest over one year. On October 24, 2011, Jazz Pharmaceuticals, Inc.’s board of directors amended the 2007 Directors Award Plan to eliminate all future initial and annual automatic grants so that future automatic grants would not be made that would be subject to the excise tax imposed by the Internal Revenue Code in connection with the Azur Merger. Accordingly, all future stock option grants under the 2007 Directors Award Plan will be at the discretion of our board of directors. Since the Azur Merger, all of the new grants under the 2007 Directors Award Plan were granted to non-employee directors and vest ratably over service periods of to three years and expire no more than 10 years after the date of grant. In August 2016, our shareholders approved our proposal to expand the types of stock awards that may be granted to our non-employee directors under the 2007 Directors Award Plan and eliminate the final automatic share reserve increase under the 2007 Directors Award Plan that was scheduled to occur on January 1, 2017. In July 2020, our shareholders approved our proposal to increase the number of ordinary shares authorized for issuance under the 2007 Directors Award Plan by 500,000 shares. As of December 31, 2025, a total of 1,403,938 of our ordinary shares had been authorized for issuance under the 2007 Directors Award Plan.
Share-Based Compensation
Share-based compensation expense related to RSUs, PRSUs, share options and grants under our ESPP was as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Selling, general and administrative | $ | 186,622 | $ | 158,570 | $ | 146,942 | |||||||||||
| Research and development | 86,480 | 74,673 | 64,847 | ||||||||||||||
| Cost of product sales | 18,031 | 14,802 | 15,052 | ||||||||||||||
| Total share-based compensation expense, pre-tax | 291,133 | 248,045 | 226,841 | ||||||||||||||
| Income tax benefit from share-based compensation expense | (51,810) | (40,552) | (40,015) | ||||||||||||||
| Total share-based compensation expense, net of tax | $ | 239,323 | $ | 207,493 | $ | 186,826 | |||||||||||
We recognized income tax benefits related to share option exercises of $5.0 million, $0.3 million and $1.9 million in 2025, 2024 and 2023, respectively.
RSUs
In 2025, 2024 and 2023, we granted RSUs covering an equal number of our ordinary shares to employees with a weighted-average grant date fair value of $139.80, $118.41 and $144.65, respectively. The fair value of RSUs is determined on the date of grant based on the market price of our ordinary shares as of that date. The fair value of RSUs is recognized as an expense ratably over the vesting period of four years. In 2025, 2024 and 2023, 1,464,000, 1,341,000 and 1,094,000 RSUs were released, respectively, with 964,000, 892,000 and 735,000 ordinary shares issued, respectively, and 500,000, 449,000 and 359,000 ordinary shares withheld for tax purposes, respectively. The total fair value of shares vested was $199.0 million, $156.0 million and $155.5 million during 2025, 2024 and 2023, respectively.
As of December 31, 2025, total compensation cost not yet recognized related to unvested RSUs was $328.1 million, which is expected to be recognized over a weighted-average period of 2.3 years.
The following table summarizes information as of December 31, 2025 and activity during 2025 related to our RSUs:
| Number of RSUs (In thousands) | Weighted- Average Grant-Date Fair Value | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In thousands) | ||||||||||||||||||||
| Outstanding at January 1, 2025 | 4,033 | $ | 133.60 | ||||||||||||||||||||
| RSUs granted | 2,261 | 139.80 | |||||||||||||||||||||
| RSUs released | (1,464) | 140.28 | |||||||||||||||||||||
| RSUs forfeited | (424) | 132.38 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 4,406 | $ | 134.68 | 1.3 | $ | 749,044 | |||||||||||||||||
PRSUs
The Compensation & Management Development Committee of our board of directors and, in the case of our President and Chief Executive Officer, the independent members of our board of directors, approved awards of PRSUs to certain of our employees, subject to vesting on the achievement of certain commercial and pipeline performance criteria to be assessed over a performance period from the date of the grant to December 31, 2025, December 31, 2026 and December 31, 2027, respectively. The number of shares that vest is determined based on the Company’s achievement with respect to the performance criteria. For PRSUs granted prior to 2024, the amount of shares that vest will be subject to adjustment based on the application of a relative TSR modifier. For PRSUs granted in 2025 and 2024, relative TSR represents one of the performance metrics. In both cases, the number of shares that may be earned ranges between 0% and 200% of the target number of PRSUs granted.
The following table summarizes information as of December 31, 2025 and activity during 2025 related to our PRSUs:
| Number of PRSUs (In thousands) | Weighted- Average Grant-Date Fair Value | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In thousands) | ||||||||||||||||||||
| Outstanding at January 1, 2025 | 781 | $ | 150.82 | ||||||||||||||||||||
| PRSUs granted | 334 | 168.75 | |||||||||||||||||||||
| PRSUs released | (154) | 171.37 | |||||||||||||||||||||
| PRSUs forfeited | (172) | 161.31 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 789 | $ | 152.16 | 1.5 | $ | 134,181 | |||||||||||||||||
As of December 31, 2025, total compensation cost not yet recognized related to unvested PRSUs was $42.1 million, which is expected to be recognized over a weighted-average period of 1.5 years.
As the PRSUs granted in each year are subject to a market condition, the grant date fair value for such PRSUs was based on a Monte Carlo simulation model. In 2025, 2024 and 2023, we granted PRSUs to employees with a weighted-average grant date fair value of $168.75, $131.04 and $156.91, respectively. The Company evaluated the performance targets in the context of its current long-range financial plan and its product candidate development pipeline and recognized compensation expense based on the probable number of awards that will ultimately vest. In 2025 and 2024, 154,000 and 124,000 PRSUs were released, respectively, with 99,000 and 80,000 ordinary shares issued, respectively, and 55,000 and 44,000 ordinary shares withheld for tax purposes, respectively. The total fair value of shares vested was $18.8 million and $14.8 million during 2025 and 2024, respectively.
Share Options
There were no share options granted in 2025, 2024 and 2023.
The following table summarizes information as of December 31, 2025 and activity during 2025 related to our share option plans:
| Shares Subject to Outstanding Options (In thousands) | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In thousands) | ||||||||||||||||||||
| Outstanding at January 1, 2025 | 2,158 | $ | 139.79 | ||||||||||||||||||||
| Options exercised | (658) | 134.51 | |||||||||||||||||||||
| Options expired | (340) | 167.80 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 1,160 | $ | 134.57 | 3.0 | $ | 41,403 | |||||||||||||||||
| Vested and exercisable at December 31, 2025 | 1,160 | $ | 134.57 | 3.0 | $ | 41,403 | |||||||||||||||||
Aggregate intrinsic value shown in the table above is equal to the difference between the exercise price of the underlying share options and the fair value of our ordinary shares for share options that were in the money. The aggregate intrinsic value changes based on the fair market value of our ordinary shares. The aggregate intrinsic value of share options exercised was $21.7 million, $0.2 million and $6.3 million during 2025, 2024 and 2023, respectively. We issued new ordinary shares upon exercise of share options.
As of December 31, 2025, total compensation cost not yet recognized related to grants under the ESPP was $3.8 million, which is expected to be recognized over a weighted-average period of 0.9 years.
Nominal Strike Price Options
During the second quarter of 2021, we issued nominal strike price options to replace certain unvested GW awards, in connection with the GW Acquisition, with a weighted-average grant date fair value of $170.82. The fair value of nominal strike price options was determined on the date of the grant based on the market price of our ordinary shares as of that date.
The following table summarizes information as of December 31, 2025 and activity during 2025 related to our nominal strike price options:
| Shares Subject to Outstanding Options (In thousands) | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In thousands) | ||||||||||||||||||||
| Outstanding at January 1, 2025 | 19 | $ | 0.02 | ||||||||||||||||||||
| Options exercised | (10) | 0.02 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 9 | $ | 0.02 | 4.8 | $ | 1,496 | |||||||||||||||||
| Vested and exercisable at December 31, 2025 | 9 | $ | 0.02 | 4.8 | $ | 1,496 | |||||||||||||||||
The aggregate intrinsic value of nominal strike price options exercised was $1.5 million, $0.9 million and $3.9 million during 2025, 2024 and 2023, respectively. We issued new ordinary shares upon exercise of nominal strike price options.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 23, 2016 | |
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.