Liberty Latin America Ltd.LILA
Liberty Latin America Ltd. Stock Compensation Disclosure
Share-based Compensation and Other Employee Incentive Plan-related Expense
Equity Incentive Plans
Employee Incentive Plan and Nonemployee Director Incentive Plan
In 2017, we adopted the Employee Incentive Plan and the Nonemployee Director Incentive Plan, under which options, SARs, RSUs, cash awards, performance awards or any combination of the foregoing may be granted. The maximum number of Liberty Latin America common shares that may be issued under the Employee Incentive Plan and the Nonemployee Director Incentive Plan is 75 million (of which no more than 10 million shares may consist of Class B shares) and 5 million, respectively, in each case subject to anti-dilution and other adjustment provisions in the respective plans. Liberty Latin America common shares issuable pursuant to awards will be made available from either authorized but unissued shares, or shares that have been issued but reacquired by Liberty Latin America.
Awards
Non-performance Awards. The following is a summary of the material terms and conditions with respect to our non-performance-based awards:
•SARs. SARs generally vest 33.3% on the anniversary of the grant date over a vesting term of three years and expire ten years after the grant date. SARs may be granted with an exercise price at or above the fair market value of the shares on the date of grant in any class of common shares.
•RSUs. RSUs generally vest 33.3% on the anniversary of the grant date over a vesting term of three years. RSUs issued under the Nonemployee Director Incentive Plan vest on the first anniversary of the grant date.
•LTVP. During 2023, we implemented the Long-term Value Plan component of the Employee Incentive Plan, whereby employees receive a fixed-value award based upon a percentage of annual employee base compensation that vests
annually over three years and can be settled in either common shares or cash at the discretion of Liberty Latin America's Compensation Committee. During 2025, 2024, and 2023, we recognized $21 million, $14 million, and $6 million, respectively, of expense associated with the LTVP, which is recorded in other operating costs and expenses in our consolidated statements of operations. Each vesting tranche of the LTVP is accrued over the vesting period to our consolidated balance sheet in accrued payroll and employee benefits until settlement on the vesting date, which is generally in March of each year. Details on how these awards were settled can be found in the table below.
Performance Awards. The following is a summary of the material terms and conditions with respect to our performance-based awards for certain executive officers and key employees:
•PSUs. During 2022, our Chief Executive Officer was awarded a total of 0.6 million Class B PSUs, of which the first two tranches were earned and vested in each of March 2023 and March 2024, respectively. The remaining 0.2 million will vest in March 2026 based upon the achievement of certain individual qualitative objectives. At both December 31, 2025 and 2024, we had 0.2 million Class B PSUs outstanding.
•PSARs. During 2021 and 2022, certain key employees received the 2021 PSARs. Each award represented the right to receive a payment in shares or, if the compensation committee so determined, cash or a combination of cash and shares, equal to the excess of the fair market value of the common shares on the day of exercise over the exercise price, subject to performance and vesting. The 2021 PSARs have a term of ten years and included performance conditions based on the achievement of individual qualitative objectives during the performance period from January 1, 2021 through December 31, 2023. The earned 2021 PSARs vested on March 16, 2024. At both December 31, 2025 and 2024, we had 3 million Class A PSARs and 6 million Class C PSARs outstanding.
Share-based Compensation Other Employee Incentive Plan-related Expense
Our share-based compensation expense includes amounts related to share-based incentive awards held by our employees and employees of our subsidiaries. The following table summarizes certain information related to share-based incentive awards granted during the periods presented:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Assumptions used to estimate fair value of SARs and PSARs: | |||||||||||||||||
| Risk-free interest rate | 4.1 - 4.3% | 4.2 - 4.3% | 3.5 - 4.2% | ||||||||||||||
| Expected life | 6.0 - 10.0 years | 6.0 - 10.0 years | 6.0 - 10.0 years | ||||||||||||||
| Expected volatility | 45.0 - 50.5% | 43.8 - 48.3% | 42.1 - 46.7% | ||||||||||||||
| Expected dividend yield | none | none | none | ||||||||||||||
| Weighted average grant-date fair value per share of awards granted: | |||||||||||||||||
| SARs | $ | 3.92 | $ | 3.60 | $ | 4.31 | |||||||||||
| RSUs | $ | 6.53 | $ | 6.98 | $ | 7.96 | |||||||||||
| PSUs | $ | — | $ | 5.90 | $ | 8.00 | |||||||||||
| Cash used to settle equity awards (in millions) | |||||||||||||||||
LTVP | $ | 13 | $ | 8 | $ | 6 | |||||||||||
As of December 31, 2025, we have $77 million of total unrecognized compensation expense related to awards held by our employees that is expected to be recognized as a future expense over a weighted-average period of approximately 1.6 years.
For the amount of share-based compensation and other Employee Incentive Plan-related expense recognized during each period presented, see note 17.
2024 Modification
In October 2024, the compensation committee of our board of directors approved an extension of the legal life of outstanding SARs from a seven-year term to a ten-year term for SARs granted during 2018, 2019 and 2020. Prior to 2021, awards granted under the Employee Incentive Plan expired seven years after the grant date. This modification resulted in the recognition of aggregate incremental share-based compensation expense during 2024 totaling $14 million and impacted over 200 grantees.
Share-based Incentive Award Activity
The following tables summarize share-based incentive award activity during 2025 with respect to Liberty Latin America awards held by our employees and our Directors.
| Number of shares | Weighted average base price | Weighted average remaining contractual term | Aggregate intrinsic value | ||||||||||||||||||||
SARs – Class A shares | in millions | in years | in millions | ||||||||||||||||||||
Outstanding at January 1, 2025 | 11.4 | $ | 10.97 | ||||||||||||||||||||
Granted | 2.0 | $ | 6.68 | ||||||||||||||||||||
Forfeited | (0.9) | $ | 11.24 | ||||||||||||||||||||
| Exercised | — | $ | 6.88 | ||||||||||||||||||||
Outstanding at December 31, 2025 | 12.5 | $ | 10.27 | 5.9 | $ | 3.9 | |||||||||||||||||
Exercisable at December 31, 2025 | 8.9 | $ | 11.75 | 4.8 | $ | 1.0 | |||||||||||||||||
| Number of shares | Weighted average base price | Weighted average remaining contractual term | Aggregate intrinsic value | ||||||||||||||||||||
SARs – Class C shares | in millions | in years | in millions | ||||||||||||||||||||
Outstanding at January 1, 2025 | 22.9 | $ | 10.97 | ||||||||||||||||||||
Granted | 4.1 | $ | 6.65 | ||||||||||||||||||||
Forfeited | (1.7) | $ | 11.22 | ||||||||||||||||||||
| Exercised | (0.3) | $ | 6.42 | ||||||||||||||||||||
Outstanding at December 31, 2025 | 25.0 | $ | 10.29 | 5.9 | $ | 8.0 | |||||||||||||||||
Exercisable at December 31, 2025 | 17.7 | $ | 11.80 | 4.8 | $ | 1.8 | |||||||||||||||||
| Number of shares | Weighted average grant-date fair value per share | Weighted average remaining contractual term | |||||||||||||||
RSUs – Class A shares | in millions | in years | |||||||||||||||
Outstanding at January 1, 2025 | 2.2 | $ | 7.64 | ||||||||||||||
| Granted | 1.3 | $ | 6.54 | ||||||||||||||
Forfeited | (0.2) | $ | 7.04 | ||||||||||||||
| Released from restrictions | (1.3) | $ | 7.76 | ||||||||||||||
Outstanding at December 31, 2025 | 2.0 | $ | 6.92 | 2.2 | |||||||||||||
| Number of shares | Weighted average grant-date fair value per share | Weighted average remaining contractual term | |||||||||||||||
RSUs – Class C shares | in millions | in years | |||||||||||||||
Outstanding at January 1, 2025 | 4.5 | $ | 7.65 | ||||||||||||||
| Granted | 2.8 | $ | 6.53 | ||||||||||||||
Forfeited | (0.3) | $ | 7.04 | ||||||||||||||
| Released from restrictions | (2.9) | $ | 7.65 | ||||||||||||||
Outstanding at December 31, 2025 | 4.1 | $ | 6.93 | 2.2 | |||||||||||||
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.