LyondellBasell Industries N.V.LYB
LyondellBasell Industries N.V. Stock Compensation Disclosure
Incentive and Share-Based Compensation
We are authorized to grant RSUs, PSUs, stock options, and other cash and stock awards under our Long-Term Incentive Plan (“LTIP”). The Compensation and Talent Development Committee oversees our equity award grants, the type of awards, the required performance measures and the timing and duration of each grant. The maximum number of shares of our common stock reserved for issuance under the LTIP is 30,000,000 shares. After taking into consideration outstanding stock-settled awards and assuming a maximum payout for our PSU awards, there were 4,516,489 shares available for issuance as of December 31, 2025.
Total share-based compensation expense and the associated tax benefits are as follows:
| Year Ended December 31, | |||||||||||||||||
| Millions of dollars | 2025 | 2024 | 2023 | ||||||||||||||
| Compensation Expense: | |||||||||||||||||
| Restricted stock units | $ | 70 | $ | 60 | $ | 44 | |||||||||||
| Stock options | 1 | 4 | 10 | ||||||||||||||
| Performance share units | 20 | 27 | 37 | ||||||||||||||
| Total | $ | 91 | $ | 91 | $ | 91 | |||||||||||
| Tax Benefit: | |||||||||||||||||
| Restricted stock units | $ | 16 | $ | 14 | $ | 10 | |||||||||||
| Stock options | — | 1 | 2 | ||||||||||||||
| Performance share units | 5 | 6 | 9 | ||||||||||||||
| Total | $ | 21 | $ | 21 | $ | 21 | |||||||||||
Restricted Stock Unit Awards—RSUs entitle the recipient to be paid out an equal number of ordinary shares upon vesting. Effective in 2024, RSUs will generally have a three-year vesting period and ratably vest in equal increments on the first, second and third anniversary of the grant date. Prior to 2024, RSUs generally cliff vested on the third anniversary of the grant date.
The fair value of RSUs is based on the market price of the underlying stock on the date of grant. The weighted average grant date fair value for RSUs granted during the years ended December 31, 2025, 2024 and 2023 was $70.49, $95.78 and $93.93, respectively. The total fair value of RSUs vested and issued was $44 million, $45 million and $30 million during 2025, 2024 and 2023, respectively.
The following table summarizes unvested RSU activity:
| Number of Units (in thousands) | Weighted Average Grant Date Fair Value (per share) | ||||||||||
| Outstanding at January 1, 2025 | 1,236 | $ | 95.09 | ||||||||
| Granted | 897 | 70.49 | |||||||||
| Vested | (698) | 91.76 | |||||||||
| Forfeited | (93) | 84.27 | |||||||||
| Outstanding at December 31, 2025 | 1,342 | $ | 81.13 | ||||||||
As of December 31, 2025, the unrecognized compensation cost related to RSUs was $36 million, which is expected to be recognized over a weighted average period of 1.25 years.
Stock Option Awards—Stock options allow employees the opportunity to purchase ordinary shares of stock in the future at an exercise price equal to the market price at the date of grant. No Stock options were granted in 2025 or 2024. Previous awards generally have a three-year vesting period that vests in equal increments on the first, second and third anniversary of the grant date and have a contractual term of ten years. None of the Stock options are designed to qualify as Incentive Stock Options as defined in Section 422 of the Internal Revenue Code.
The fair value of each Stock option is estimated on the date of grant using the Black-Scholes option valuation model. The principal assumptions utilized in valuing Stock options include the expected stock price volatility (based on our historical stock price volatility over the expected term); the expected dividend yield; and the risk-free interest rate (an estimate based on the yield of a United States Treasury zero coupon bond with a maturity equal to the expected term of the option).
The expected term of Stock options granted is estimated based on the weighted average of historical exercise patterns and the midpoint of the remaining expected life.
The weighted average fair value of Stock options granted and the assumptions used in estimating those fair values are as follows:
| Year Ended December 31, | ||||||||
| 2023 | ||||||||
| Weighted average fair value | $ | 24.85 | ||||||
| Fair value assumptions: | ||||||||
| Dividend yield | 5.0 | % | ||||||
| Expected volatility | 39.9-40.2% | |||||||
| Risk-free interest rate | 3.5-4.7% | |||||||
| Weighted average expected term, in years | 5.7 | |||||||
The following table summarizes Stock option activity:
| Number of Shares (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Term | Aggregate Intrinsic Value (millions of dollars) | ||||||||||||||||||||
| Outstanding at January 1, 2025 | 1,943 | $ | 91.40 | ||||||||||||||||||||
| Forfeited | (8) | 94.46 | |||||||||||||||||||||
| Expired | (126) | 98.24 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 1,809 | $ | 90.91 | 4.1 years | $ | — | |||||||||||||||||
| Exercisable at December 31, 2025 | 1,678 | $ | 90.62 | 3.9 years | $ | — | |||||||||||||||||
The aggregate intrinsic value of Stock options exercised during the year ended December 31, 2024 and 2023 was $10 million and $8 million, respectively. No Stock options were exercised in 2025.
Performance Share Units Awards—A target number of PSUs is granted to participants at the beginning of a three-year performance period. Final payout of awards, which can range from 0% to 200% of target shares granted, is determined and paid after the performance period. These awards are settled in shares of common stock, and each unit is equivalent to one share of our common stock.
The payout for PSUs granted will be equally based on Total Shareholder Return (“TSR”) relative to our peers and the Free Cash Flow (“FCF”) performance metric. The fair value of the portion of the award that vests based on TSR is estimated using a Monte-Carlo simulation. For the other portion of the award, the fair value is determined at the end of each reporting period based on our stock price and the number of shares expected to vest.
The weighted average fair value and the assumptions used in estimating those fair value using a Monte-Carlo simulation are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Weighted average fair value | $ | 98.74 | $ | 133.75 | $ | 128.95 | |||||||||||
| Fair value assumptions: | |||||||||||||||||
| Expected volatility of LyondellBasell N.V. common stock | 25.00 | % | 28.60% | 38.04% | |||||||||||||
| Expected volatility of peer companies | 23.85-43.97% | 24.68-43.42% | 22.82-52.73% | ||||||||||||||
| Average correlation coefficient of peer companies | 0.54 | 0.56 | 0.52 | ||||||||||||||
| Risk-free interest rate | 4.01 | % | 4.47% | 4.39 | % | ||||||||||||
The following table summarizes unvested PSU activity:
| Number of Units (in thousands) | Weighted Average Grant Date Fair Value (per share) | ||||||||||
| Outstanding at January 1, 2025 | 989 | $ | 101.94 | ||||||||
| Granted | 609 | 71.27 | |||||||||
| Vested | (258) | 93.84 | |||||||||
| Forfeited | (133) | 86.72 | |||||||||
| Outstanding at December 31, 2025 | 1,207 | $ | 89.87 | ||||||||
The total fair value of PSUs vested during 2025 was $11 million for the TSR component, which paid out at 90% of target shares, and $8 million for the FCF component, which paid out at 68% of target shares. As of December 31, 2025, the unrecognized compensation cost related to PSUs was $32 million, which is expected to be recognized over a weighted average period of 1.8 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 16, 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.