MediaAlpha, Inc.MAX
MediaAlpha, Inc. Stock Compensation Disclosure
Equity-based compensation plans
Equity-based compensation cost recognized for equity-based awards outstanding during the year ended December 31, 2025, 2024, and 2023 was as follows:
| Year ended December 31, | ||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Restricted stock units | $ | 30,014 | $ | 32,463 | $ | 52,646 | ||||||||||||||
Performance-based restricted stock units | 317 | 1,332 | — | |||||||||||||||||
| QLH Restricted Class B-1 units | — | 16 | 87 | |||||||||||||||||
| Restricted Class A shares | — | 272 | 588 | |||||||||||||||||
| Total equity-based compensation | $ | 30,331 | $ | 34,083 | $ | 53,321 | ||||||||||||||
| Total income tax benefit recognized related to equity-based compensation (a) | $ | 8,660 | $ | — | $ | — | ||||||||||||||
a.For the year ended December 31, 2024 and 2023, there was no income tax benefit related to RSUs as future tax benefits related to these awards were fully offset by a valuation allowance.
Equity-based compensation cost was included in the following expense categories in the consolidated statements of operations during the year ended December 31, 2025, 2024 and 2023:
| Year ended December 31, | ||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Cost of revenue | $ | 1,030 | $ | 3,026 | $ | 3,875 | ||||||||||||||
| Sales and marketing | 5,345 | 7,265 | 8,654 | |||||||||||||||||
| Product development | 5,441 | 6,453 | 7,719 | |||||||||||||||||
| General and administrative | 18,515 | 17,339 | 33,073 | |||||||||||||||||
| Total equity-based compensation | $ | 30,331 | $ | 34,083 | $ | 53,321 | ||||||||||||||
No compensation cost was capitalized during the year ended December 31, 2025, 2024, and 2023.
Restricted Stock Units
In October 2020, the Company adopted the 2020 Omnibus Incentive Plan (the “Omnibus Plan”) under which the Company may grant restricted stock units and other equity-based awards to employees, directors, officers, and consultants of the Company. A total of 12,506,550 shares was initially reserved for issuance under the Omnibus Plan, and such pool is automatically increased each January 1 during the term of the Omnibus Plan by a number of shares equal to 5% of the total number of shares of Class A common stock issued and outstanding on December 31 of the calendar year immediately preceding the date of such increase, or such lesser amount as may be determined by the Board of Directors. As of December 31, 2025, 6,457,213 Class A shares were available for future grant under the Omnibus Plan.
Each RSU represents the right to receive one share of Class A common stock upon vesting. The RSUs granted generally vest quarterly over four years. However, the Company may also grant RSUs with shorter vesting periods, or which vest immediately, without any future service requirement. The RSUs are equity-classified share-based payments, and the related cost is recognized utilizing the straight-line method. Upon vesting of the restricted stock units, the Company generally issues new shares of Class A common stock to the participants, net of shares withheld in satisfaction of withholding taxes, except for certain executives and non-employee directors who receive gross share settlement.
The fair value of the restricted stock units is determined based on the closing market price of the Company’s Class A shares on the date of grant. Modifications occasionally occur in which RSUs are immediately vested for terminated employees, resulting in an adjustment to the fair value as of modification date and the related cost associated with those vested RSUs, which are generally immaterial to the Company’s total equity-based compensation expense and unit activity.
A summary of unvested restricted stock unit activity for 2023, 2024, and 2025 is as follows:
| Number of Units | Weighted - average grant-date fair value | ||||||||||
| RSUs | |||||||||||
| Unvested and outstanding as of December 31, 2022 | 4,894,121 | $ | 17.79 | ||||||||
| Granted | 2,439,257 | 13.32 | |||||||||
| Vested | (3,290,092) | 17.78 | |||||||||
| Forfeited | (410,853) | 15.23 | |||||||||
| Settled or canceled | — | — | |||||||||
| Unvested and outstanding as of December 31, 2023 | 3,632,433 | $ | 15.07 | ||||||||
| Granted | 1,769,150 | 19.65 | |||||||||
| Vested | (1,996,916) | 16.46 | |||||||||
| Forfeited | (198,510) | 13.81 | |||||||||
| Settled or canceled | — | — | |||||||||
| Unvested and outstanding as of December 31, 2024 | 3,206,157 | $ | 16.76 | ||||||||
| Granted | 3,583,550 | 9.42 | |||||||||
| Vested | (2,050,523) | 14.31 | |||||||||
| Forfeited | (228,788) | 13.21 | |||||||||
| Settled or canceled | — | — | |||||||||
| Unvested and outstanding as of December 31, 2025 | 4,510,396 | $ | 12.21 | ||||||||
As of December 31, 2025, total unrecognized compensation cost related to unvested RSUs was $50.6 million, which is expected to be recognized over a weighted average period of 2.53 years. The total fair value of Company RSUs that vested during the year ended December 31, 2025, 2024, and 2023 was $23.1 million, $32.1 million, and $31.1 million, respectively.
Performance-Based Restricted Stock Units
During 2023 and 2024, the Company granted PRSUs to certain officers or employees under the 2020 Omnibus Incentive Plan. Each such PRSU represented the right to receive one share of Class A common stock upon vesting. The PRSUs granted represented the target amount divided by the average closing price of the Company’s Class A common stock for the 20 trading day period ended as of the Friday preceding the grant date. Such PRSUs vested based on the achievement of the performance measures set by the Compensation Committee of the Company's Board of Directors (“Compensation Committee”), and the resulting value earned, which amount would be divided by the average closing price of the Company’s Class A common stock for the 20 trading day period ended as of the Friday preceding the Compensation Committee’s determination of the achievement of such performance measures to determine the number of PRSUs to be vested. Any difference between the number of PRSUs granted and vested due to change in the average closing price of the Company’s Class A common stock for the 20 trading day period as of the grant date and vesting date, respectively is accounted for as a settlement adjustment. The expected vesting period of the PRSUs granted in 2023 and 2024 was approximately one year.
The PRSUs are liability-classified awards, as they are based on a fixed dollar amount to be settled in a variable number of shares. At each reporting period, the Company recognizes any related expense based on the estimated probability of the achievement of these performance measures and the portion of the requisite service period completed. The amount of expense recognized in any period can vary based on changes in the expected achievement of the specified performance measures. If such performance measures are determined to be not likely to be met, or are ultimately not met, no further expense is recognized and any previously recognized expense is reversed. Upon vesting of the PRSUs, the Company will issue the resulting number of shares of Class A common stock.
As of December 31, 2023, the Company did not meet the performance measures as determined by the Compensation Committee and accordingly the PRSUs granted during the year ended December 31, 2023 were canceled as of that date. As of December 31, 2024, the Company met the maximum levels for both performance measures approved by the Compensation Committee for the PRSUs granted during the year ended December 31, 2024, and accordingly such PRSUs vested at the maximum payout level during the first quarter of 2025.
A summary of unvested performance-based restricted stock unit activity for 2023, 2024, and 2025 is as follows:
| Number of Units | Weighted - average grant-date fair value | ||||||||||
| PRSUs | |||||||||||
| Unvested and outstanding as of December 31, 2022 | — | $ | — | ||||||||
| Granted | 74,700 | 14.98 | |||||||||
| Vested | — | — | |||||||||
| Forfeited | (74,700) | 14.98 | |||||||||
| Settled or canceled | — | — | |||||||||
| Unvested and outstanding as of December 31, 2023 | — | $ | — | ||||||||
| Granted | 147,500 | 11.29 | |||||||||
| Vested | — | — | |||||||||
| Forfeited | — | — | |||||||||
| Settled or canceled | — | — | |||||||||
| Unvested and outstanding as of December 31, 2024 | 147,500 | $ | 11.29 | ||||||||
| Granted | — | — | |||||||||
Settlement adjustment* | (7,502) | — | |||||||||
| Vested | (139,998) | 11.78 | |||||||||
| Forfeited | — | — | |||||||||
| Settled or canceled | — | — | |||||||||
| Unvested and outstanding as of December 31, 2025 | — | $ | — | ||||||||
* Settlement adjustment reflects differences between expected and actual shares vested due to the closing price of the Company’s share of Class A common stock and is not performance-related.
As of December 31, 2025, all Company PRSUs were vested and all compensation cost was recognized. The total fair value of Company PRSUs that vested during the year ended December 31, 2025, 2024, and 2023 was $1.3 million. $0, and $0, respectively.
QLH Restricted Class B-1 Units
Upon the IPO, Senior Executives and one other employee that held legacy QLH Class B units received Class B-1 units, which have a substantially equivalent value and which together with shares of Class B common stock can be exchanged for shares of Class A common stock when vested. The cancellation and concurrent replacement of QLH Class B units for Class B-1 units was considered a modification. The modification did not result in incremental compensation cost, as the fair value of the replacement awards, determined by using the per share price of shares of Class A common stock (into which QLH Restricted Class B-1 units are convertible) offered to the public in connection with the IPO, did not differ from the fair value of the QLH Class B units immediately before the modification. The awards that were unvested on the modification date are QLH Restricted Class B-1 units and are subject to the same vesting terms as the legacy QLH Class B units under the QLH Plan. Under the QLH Plan, 6,470,599 QLH Restricted Class B-1 units and Company Class A shares are authorized.
The QLH Restricted Class B-1 units granted to employees were generally subject to a four-year vesting period. The QLH Restricted Class B-1 units were equity-classified share-based payments, and the remaining unrecognized cost, which was based on the original grant-date fair value of the QLH Class B units, was recognized utilizing the straight-line method. Grantees made 83(b) elections under the Internal Revenue Code; therefore, the QLH Restricted Class B-1 Units were subject to gross share settlement.
A summary of unvested QLH Class B-1 unit activity for 2023 and 2024 is as follows:
| Number of Units | Weighted - average grant-date fair value | ||||||||||
| QLH Restricted Class B-1 units | |||||||||||
| Unvested and outstanding as of December 31, 2022 | 42,170 | $ | 2.74 | ||||||||
| Granted | — | — | |||||||||
| Vested | (39,705) | 2.46 | |||||||||
| Forfeited | — | — | |||||||||
| Settled or canceled | — | — | |||||||||
| Unvested and outstanding as of December 31, 2023 | 2,465 | $ | 7.18 | ||||||||
| Granted | — | — | |||||||||
| Vested | (2,465) | 7.18 | |||||||||
| Forfeited | — | — | |||||||||
| Settled or canceled | — | — | |||||||||
| Unvested and outstanding as of December 31, 2024 | — | $ | — | ||||||||
As of December 31, 2024, all QLH Restricted Class B-1 units were vested and all compensation cost was recognized. The total fair value of QLH Class B-1 units that vested during the year ended December 31, 2024 and 2023 was $43 thousand and $0.5 million, respectively.
Company Restricted Class A Shares
Upon the IPO, substantially all employees other than senior executives and one other employee that held legacy QLH Class B units received Company Class A shares. The cancellation and concurrent replacement of the QLH Class B units with Company Class A shares was considered a modification. The modification did not result in incremental compensation cost, as the fair value of the replacement awards, determined by using the per share price of Company Class A shares offered to the public in connection with the IPO, did not differ from the fair value of the QLH Class B units immediately before the modification. The awards that were unvested on the modification date were Company restricted Class A shares and were subject to the same vesting terms as the legacy QLH Class B units under the QLH Plan. Under the QLH Plan, 6,470,599 QLH Restricted Class B-1 units and Company Class A shares are authorized.
The Company restricted Class A shares granted to employees were generally subject to a four-year vesting period. The Company restricted Class A shares were equity-classified share-based payments, and the remaining unrecognized cost, which was based on the original grant-date fair value of the QLH Class B units, was recognized utilizing the straight-line method. Grantees have made 83(b) elections under the Internal Revenue Code; therefore, the Company Restricted Class A shares were subject to gross share settlement.
A summary of unvested Company restricted Class A share activity for 2023 and 2024 is as follows:
| Number of Units | Weighted - average grant-date fair value | ||||||||||
| Restricted Class A Shares | |||||||||||
| Unvested and outstanding as of December 31, 2022 | 181,061 | $ | 5.42 | ||||||||
| Granted | — | — | |||||||||
| Vested | (152,721) | 4.45 | |||||||||
| Forfeited | — | — | |||||||||
| Settled or canceled | — | — | |||||||||
| Unvested and outstanding as of December 31, 2023 | 28,340 | $ | 10.67 | ||||||||
| Granted | — | — | |||||||||
| Vested | (28,340) | 10.67 | |||||||||
| Forfeited | — | — | |||||||||
| Settled or canceled | — | — | |||||||||
| Unvested and outstanding as of December 31, 2024 | — | $ | — | ||||||||
As of December 31, 2024, all Company restricted Class A shares were vested and all compensation cost was recognized. The total fair value of Company restricted Class A shares that vested during the year ended December 31, 2024 and 2023 was $0.5 million and $1.8 million, respectively.
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.