LAMAR ADVERTISING CO/NEWLAMR
LAMAR ADVERTISING CO/NEW Stock Compensation Disclosure
Stock Compensation Plans
Equity Incentive Plan. Lamar's 1996 Equity Incentive Plan, as amended, (the “1996 Plan”) has reserved 17.5 million shares of Class A common stock for issuance to directors and employees, including shares underlying granted options and common stock reserved for issuance under its performance-based incentive and LTIP Unit program. Options granted under the 1996 Plan expire ten years from the grant date with vesting terms ranging from to five years which primarily include 1) options that vest in one-fifth increments beginning on the grant date and continuing on each of the first four anniversaries of the grant date and 2) options that cliff-vest on the fifth anniversary of the grant date. All grants are made at fair market value based on the closing price of our Class A common stock as reported on the Nasdaq Global Select Market on the date of grant.
In February 2013, the 1996 Plan was amended to eliminate the provision that limited the amount of Class A common stock, including shares retained from an award, that could be withheld to satisfy tax withholding obligations to the minimum tax obligations required by law (except with respect to option awards). In accordance with ASC 718, Compensation – Stock Compensation, the Company is required to classify the awards affected by the amendment as liability-classified awards at fair value each period prior to their settlement. As of December 31, 2025 and 2024, the Company recorded a liability, in accrued expenses, of $11,691 and $16,404, respectively, related to its equity incentive awards affected by this amendment.
We use a Black-Scholes-Merton option pricing model to estimate the fair value of share-based awards. The Black-Scholes-Merton option pricing model incorporates various highly subjective assumptions, including expected term and expected volatility. We have reviewed our historical pattern of option exercises and have determined that meaningful differences in option exercise activity existed among vesting schedules. Therefore, for all stock options granted after January 1, 2006, we have categorized these awards into two groups of vesting 1) 5-year cliff vest and 2) 4-year graded vest, for valuation purposes. We have determined there were no meaningful differences in employee activity under our ESPP due to the nature of the plan.
We estimate the expected term of options granted using an implied life derived from the results of a hypothetical mid-point settlement scenario, which incorporates our historical exercise, expiration and post-vesting employment termination patterns, while accommodating for partial life cycle effects. We believe these estimates will approximate future behavior.
We estimate the expected volatility of our Class A common stock at the grant date using a blend of 90% historical volatility of our Class A common stock and 10% implied volatility of publicly traded options with maturities greater than six months on our Class A common stock as of the option grant date. Our decision to use a blend of historical and implied volatility was based upon the volume of actively traded options on our common stock and our belief that historical volatility alone may not be completely representative of future stock price trends.
Our risk-free interest rate assumption is determined using the Federal Reserve nominal rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. We assumed an expected dividend yield of 5%.
We estimate option forfeitures at the time of grant and periodically revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We record stock based compensation expense only for those awards expected to vest using an estimated forfeiture rate based on our historical forfeiture data.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used:
| Grant Year | Dividend Yield | Expected Volatility | Risk Free Interest Rate | Expected Lives | ||||||||||||||||||||||
December 31, 2025 | 5% | 45% | 4% | 6 | ||||||||||||||||||||||
December 31, 2024 | 5% | 45% | 4% | 6 | ||||||||||||||||||||||
December 31, 2023 | 5% | 45% | 4% | 6 | ||||||||||||||||||||||
Information regarding stock options under the 1996 Plan for the year ended December 31, 2025 is as follows:
| Shares | Weighted Average Exercise Price | Weighted Average Contractual Life | |||||||||||||||
| Outstanding, beginning of year | 323,440 | $ | 92.67 | ||||||||||||||
| Granted | 100,000 | 119.97 | |||||||||||||||
| Exercised | (58,775) | 83.30 | |||||||||||||||
| Forfeited | (1,800) | 118.30 | |||||||||||||||
| Expired | — | — | |||||||||||||||
| Outstanding, end of year | 362,865 | $ | 101.58 | 6.64 | |||||||||||||
| Exercisable at end of year | 222,465 | $ | 93.41 | 5.33 | |||||||||||||
At December 31, 2025 there was $3,840 of unrecognized compensation cost related to stock options granted which is expected to be recognized over a weighted-average period of 1.93 years.
Shares available for future stock option, LTIP Units and restricted share grants to employees and directors under existing plans were 1,130,304 at December 31, 2025. The aggregate intrinsic value of options outstanding as of December 31, 2025 was $9,165 and the aggregate intrinsic value of options exercisable was $7,417. Total intrinsic value of options exercised was $2,417 for the year ended December 31, 2025.
Stock Purchase Plan. On May 30, 2019, our shareholders approved Lamar Advertising’s 2019 Employee Stock Purchase Plan (the “2019 ESPP”). The number of shares of Class A common stock available for issuance under the 2019 ESPP was automatically increased by 87,976 shares on January 1, 2025 pursuant to the automatic increase provisions of the 2019 ESPP.
The following is a summary of 2019 ESPP share activity for the year ended December 31, 2025:
| Shares | |||||
Available for future purchases, January 1, 2025 | 204,528 | ||||
| Additional shares reserved under 2019 ESPP | 87,976 | ||||
| Purchases | (126,065) | ||||
Available for future purchases, December 31, 2025 | 166,439 | ||||
Performance-based compensation. Unrestricted shares of our Class A common stock may be awarded to key officers, employees and directors under our 1996 Plan based on certain Company performance measures for fiscal year 2025. The number of shares to be issued, if any, are generally dependent on the level of achievement of these performance measures as determined by the Company’s Compensation Committee based on our 2025 results and are issued in the first quarter of 2026. The shares subject to these awards generally can range from a minimum of 0% to a maximum of 120% of the target number of shares depending on the level at which the goals are attained. Under the 1996 Plan, the Company's Compensation Committee may also award additional shares in its discretion based on other factors, which awards, if any, for 2026, will also be issued in the first quarter of 2026. Based on the Company’s performance measures achieved through December 31, 2025, the Company recorded $17,444, $24,711 and $11,677 as stock-based compensation expense related to these agreements for the years ended December 31, 2025, 2024 and 2023, respectively.
LTIP Units. In addition to stock compensation, the Company may issue LTIP Units of Lamar LP, a subsidiary of the Company and Lamar Media, to certain officers, employees and directors under the 1996 Plan. Such LTIP Units are subject to vesting and forfeiture conditions based on performance criteria approved by the Compensation Committee, which generally mirrors the performance criteria applicable to the Company’s performance-based compensation, as described above. The Compensation Committee may also make discretionary grants of LTIP Units based on other factors. LTIP Units are a class of units intended to qualify as "profits interests" of Lamar LP. The LTIP Units convert into Common Units of Lamar LP upon the occurrence of certain events. Common Units are redeemable by the holder for a cash amount per Common Unit equal to the market value of an equivalent number of shares of common stock of the Company. At the Company’s option, in lieu of cash, the redemption obligation may be satisfied by issuing shares of the Company's Class A common stock in exchange for Common Units tendered for redemption. During the year ended December 31, 2025, 22,000 Common Units (which had originally been issued as LTIP Units) were converted to the Company’s Class A common stock. As of December 31, 2025, Lamar LP has a total of 358,800 LTIP Units issued and outstanding to the Company's executive officers, of which 238,800 LTIP units have vested. For the years ended December 31, 2025 and 2024, the Company recorded $9,830 and $13,996, respectively, as stock-based compensation expense related to these LTIP Units.
The following table summarizes information regarding LTIP Units activity under the 1996 Plan for the year ended December 31, 2025:
| Unvested LTIP Units | Weighted Average Grant Date Fair Value | ||||||||||
Balance at January 1, 2025 | 120,000 | $ | 117.29 | ||||||||
| Granted | 120,000 | 116.76 | |||||||||
| Vested | (120,000) | 117.29 | |||||||||
Balance at December 31, 2025 | 120,000 | $ | 116.76 | ||||||||
At December 31, 2025 there was $1,539 of unrecognized compensation cost related to LTIP Units granted which is expected to be recognized in the first quarter of 2026.
The fair value of LTIP Units granted and vested as of December 31, 2025 was $39,356 and $25,344, respectively, based on the weighted average grant date fair value per unit.
Restricted stock compensation. Annually, each non-employee director automatically receives a restricted stock award of our Class A common stock upon election or re-election. The awards vest 50% on the grant date and 50% on the last day of the directors' one year term. For the years ended December 31, 2025 and 2024, the Company recorded $746 for each period in stock-based compensation expense related to these awards.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 25, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 25, 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.