Leslie's, Inc. Stock Compensation Disclosure
Note 14—Equity-Based Compensation
Equity-Based Compensation
2020 Omnibus Incentive Plan
In October 2020, we adopted the Incentive Plan, which was amended and restated by our shareholders at our 2024 Annual Meeting of Shareholders. The Plan provides for various types of awards, including non-qualified stock options to purchase Leslie’s common stock (each, a “Stock Option”), restricted stock units (“RSUs”) and performance stock units (“PSUs”) which may settle in Leslie’s, Inc. common stock to our directors, executives, and eligible employees of the Company. As of October 4, 2025, we had 0.6 million shares of common stock available for future grants under the Incentive Plan.
As of October 4, 2025, the aggregate unamortized value of all outstanding equity-based compensation awards was $7.7 million, which is expected to be recognized over a weighted average period of 2.0 years.
Stock Options
Stock Options granted under the Incentive Plan generally expire ten years from the date of grant and consist of Stock Options that vest upon satisfaction of time-based requirements. The following tables summarize our Stock Option activity under the Incentive Plan (in thousands, except per share amounts):
|
|
Year Ended |
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|||||||||||||
|
|
October 4, 2025 |
|
|
September 28, 2024 |
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||||||||||
|
|
Number of Options |
|
|
Weighted Average |
|
|
Number of Options |
|
|
Weighted Average |
|
||||
Outstanding, Beginning |
|
|
94 |
|
|
$ |
369.15 |
|
|
|
165 |
|
|
$ |
362.00 |
|
Granted |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Exercised |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Forfeited/Expired |
|
|
(54 |
) |
|
|
350.30 |
|
|
|
(71 |
) |
|
|
352.80 |
|
Balance, Ending |
|
|
40 |
|
|
$ |
394.35 |
|
|
|
94 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Vested and exercisable as of October 4, 2025 |
|
|
40 |
|
|
$ |
394.35 |
|
|
|
81 |
|
|
$ |
366.60 |
|
|
|
October 4, 2025 |
|
|
Aggregate intrinsic value of Stock Options outstanding |
|
$ |
— |
|
Unamortized value of unvested Stock Options |
|
$ |
— |
|
Weighted average years that expense is expected to be recognized |
|
|
|
|
Weighted average remaining contractual years outstanding |
|
|
5.2 |
|
Restricted Stock Units and Performance Units
RSUs represent grants that vest ratably upon the satisfaction of time-based requirements. PSUs represent grants potentially issuable in the future based upon the Company’s achievement of certain performance conditions. The fair value of our RSUs and PSUs are calculated based on the Company’s stock price on the date of the grant.
The following table summarizes our RSU and PSU activity under the Incentive Plan (in thousands, except per share amounts):
|
|
Year Ended |
|
|||||||||||||
|
|
October 4, 2025 |
|
|
September 28, 2024 |
|
||||||||||
|
|
Number of RSUs/PSUs |
|
|
Weighted Average |
|
|
Number of RSUs/PSUs |
|
|
Weighted Average |
|
||||
Outstanding, Beginning |
|
|
152 |
|
|
$ |
135.18 |
|
|
|
104 |
|
|
$ |
238.40 |
|
Granted (1) |
|
|
237 |
|
|
|
33.71 |
|
|
|
146 |
|
|
|
94.60 |
|
Vested |
|
|
(46 |
) |
|
|
148.54 |
|
|
|
(39 |
) |
|
|
186.00 |
|
Forfeited |
|
|
(89 |
) |
|
|
100.72 |
|
|
|
(59 |
) |
|
|
180.80 |
|
Balance, Ending |
|
|
254 |
|
|
$ |
50.21 |
|
|
|
152 |
|
|
$ |
|
|
(1) During the year ended October 4, 2025, 45,000 PSUs were granted subject to the Company achieving certain adjusted sales and adjusted EBITDA performance targets on a cumulative basis during fiscal years 2025, 2026, and 2027. The criteria are based on a range of performance targets in which participants may earn between 0% to 200% of the base number of awards granted. The weighted average grant date fair value of the PSUs was $48.80. The Company assesses the attainment of target payout rates each reporting period. Equity-based compensation expense is recognized for awards deemed probable of vesting.
For the year ended September 28, 2024, the Company granted 20,000 PSUs subject to the Company achieving certain adjusted net income and sales performance targets on a cumulative basis during fiscal years 2024 and 2025. The criteria are based on a range of these performance targets in which participants may earn between 0% to 200% of the base number of awards granted. The weighted average grant date fair value of the PSUs was $108.60. The Company assesses the attainment of target payout rates each reporting period. Equity-based compensation expense is recognized for awards deemed probable of vesting.
|
|
October 4, 2025 |
|
|
Unamortized value of unvested RSUs/PSUs (in thousands): |
|
$ |
7,709 |
|
Weighted average period (years) expense is expected to be recognized |
|
|
2.0 |
|
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.