Mistras Group, Inc.MG
Mistras Group, Inc. Stock Compensation Disclosure
Share-Based Compensation
The Company grants share-based incentive awards to its eligible employees and non-employee directors under its 2016 Long-Term Incentive Plan (the "2016 Plan"). Awards granted under the 2016 Plan may be in the form of stock options, restricted stock units and other forms of share-based incentives, including performance-based restricted stock units, stock appreciation rights and deferred stock rights. At the annual shareholders meeting on May 14, 2024, the Company’s shareholders approved an amendment to the 2016 Plan, including an increase to the total number of shares that may be issued under the 2016 Plan by 1.3 million, for a total of 6.2 million shares that are authorized for issuance under the 2016 Plan, of which approximately 934,000 shares were available for future grants as of December 31, 2025.
Stock Options
The grant date fair values of the stock options granted in the years ended December 31, 2025 and 2023, were estimated using the Black-Scholes option valuation model, the key assumptions for which are listed in the table below. No stock option awards were granted during the year ended December 31, 2024. The expected volatility assumption is based on the historical volatility of our common stock measured over a period approximately equal to the expected term of the awards. The expected term represents the period of time that options granted are expected to be outstanding. The risk-free interest rate is based on U.S. Treasury securities with terms equal to the expected timing of stock option exercises as of the grant date. The dividend yield assumption reflects anticipated dividends on the Company’s common stock. The terms of stock options granted in each respective year are described further below.
On October 11, 2023, Mr. Stamatakis was granted an award of stock options to purchase 250,000 shares of common stock of the Company, with an exercise price of $5.36, the closing price of the Company's common stock as quoted on the New York Stock Exchange (the "NYSE") on the grant date (the "Options"). These stock options were granted as an inducement for Mr. Stamatakis to accept the position of Interim President and CEO of the Company and were therefore granted outside the 2016
Plan, as permitted by the rules of the NYSE. These stock options can be exercised any time after the grant date until its expiration date, which is the earlier of 10 years from the grant date or one year following the date Mr. Stamatakis is no longer serving as an officer, director or in any other capacity of the Company. The Company recognized all share-based compensation expense related to the stock options granted in the fourth quarter of 2023 when they were granted, and no further unrecognized share-based compensation expense remains as of the end of the current period.
On January 6, 2025, Mr. Stamatakis was granted a stock option for the purchase of 375,000 shares of the Company's common stock at an exercise price of $9.06, the closing price of the Company's common stock on the NYSE on the grant date. These stock options can be exercised any time on or after January 6, 2026, and prior to their expiration date, which is the earlier of 10 years from the grant date or one year following the date Mr. Stamatakis is no longer serving as an officer, director or in any other capacity of the Company. The Company recognized $2.0 million of share-based compensation expense within Reorganization and other costs on the Company's Consolidated Statements of Income (Loss) during the year ended December 31, 2025 related to these stock options that were granted in the first quarter of 2025. No further unrecognized share-based compensation expense remains as of the end of the current period related to these stock options.
On September 8, 2025, Natalia Shuman, President and Chief Executive Officer of the Company, was awarded options to purchase 35,000 shares of the Company’s common stock. The options have an exercise price of $9.71, the closing price of the Company's common stock on the NYSE on the grant date of September 8, 2025. The options can be exercised any time on or after September 8, 2026, and expire ten years after the grant date of September 8, 2025, in each case subject to certain exceptions as to the vesting and expiration in case of termination of employment, death or disability. The Company recognized $0.1 million of share-based compensation expense related to these stock options during the year ended December 31, 2025. $0.1 million of unrecognized share-based compensation expense remains as of the end of the current period related to these stock options.
The following table contains weighted average Black-Scholes option valuation model assumptions for stock options granted for the years ended December 31, 2025, 2024 and 2023:
| 2025 | 2024 | 2023 | |||||||||||||||
| Expected Dividend Yield | — | % | — | % | — | % | |||||||||||
| Expected Volatility | 60.8 | % | — | % | 62.0 | % | |||||||||||
| Expected term (in years) | 5.5 | — | 5.0 | ||||||||||||||
| Risk-free interest rate | 4.3 | % | — | % | 4.6 | % | |||||||||||
The weighted-average grant date fair value of options granted during the years ended December 31, 2025 and 2023 was $5.30 per share and $3.04 per share, respectively. No stock option awards were granted during the year ended December 31, 2024.
The following table sets forth a summary of the stock option activity, weighted-average exercise prices, options outstanding and exercisable as of December 31, 2025, 2024 and 2023 as follows:
| Number of Options (Thousands) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (Millions) | ||||||||||||||||||||
| Outstanding at January 1, 2023 | — | $ | — | — | $ | — | |||||||||||||||||
| Granted | 250 | 5.36 | |||||||||||||||||||||
| Exercised | — | ||||||||||||||||||||||
| Expired or forfeited | — | ||||||||||||||||||||||
| Outstanding at December 31, 2023 | 250 | $ | 5.36 | 9.8 | $ | 0.5 | |||||||||||||||||
| Granted | — | — | |||||||||||||||||||||
| Exercised | — | — | |||||||||||||||||||||
| Expired or forfeited | — | — | |||||||||||||||||||||
| Outstanding at December 31, 2024 | 250 | $ | 5.36 | 8.8 | $ | 0.9 | |||||||||||||||||
| Granted | 435 | 9.14 | |||||||||||||||||||||
| Exercised | — | — | |||||||||||||||||||||
| Expired or forfeited | — | — | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 685 | $ | 7.76 | 8.6 | $ | 3.3 | |||||||||||||||||
| Exercisable at December 31, 2025 | 625 | $ | 7.58 | 8.5 | $ | 3.2 | |||||||||||||||||
Stock Issuances to Non-Employee Directors
As part of its compensation program for non-employee directors, the Company issues fully-vested common stock to its non-employee directors. Prior to 2025, the shares of common stock were issued in semi-annual awards. In 2025, non-employee directors received a single award during the quarter ended June 30, 2025. A summary of the fully-vested common stock the Company issued to its non-employee directors, in connection with its non-employee director compensation, is as follows (in thousands):
| For the year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Awards issued | 72 | 60 | 133 | ||||||||||||||
| Grant date fair value of awards issued | $ | 571 | $ | 549 | $ | 750 | |||||||||||
Restricted Stock Unit Awards
Restricted stock units ("RSUs") generally vest ratably on each of the first three or anniversary dates of issuance. For the years ended December 31, 2025, 2024 and 2023, the company recognized share-based compensation expense within selling, general and administrative related to RSU awards of $3.5 million, $4.1 million and $4.9 million, respectively. For the year ended December 31, 2025, the Company recognized share-based compensation expense within Reorganization and other costs related to RSU awards of $0.6 million. No share-based compensation expense was recognized within Reorganization and other costs related to RSU awards for the years ended 2024 and 2023. As of December 31, 2025, there was approximately $5.3 million of unrecognized compensation costs, related to RSUs, which are expected to be recognized over a remaining weighted average period of 2.3 years. Upon vesting, RSUs are generally net share-settled to cover the required minimum withholding tax and the remaining amount is converted into an equivalent number of shares of common stock.
A summary of the vesting activity of RSU awards, with the respective fair value of the awards, is as follows (in thousands):
| For the year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Awards issued | 597 | 467 | 683 | ||||||||||||||
| Grand date fair value of awards issued | $ | 5,688 | $ | 4,247 | $ | 4,269 | |||||||||||
A summary of the Company's outstanding, non-vested RSUs is as follows (in thousands, except per share amounts and years):
| For the year ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Units | Weighted Average Grant-Date Fair Value | Units | Weighted Average Grant-Date Fair Value | Units | Weighted Average Grant-Date Fair Value | ||||||||||||||||||||||||||||||
| Outstanding at beginning of period: | 1,231 | $ | 8.41 | 1,184 | $ | 8.07 | 1,415 | $ | 6.66 | ||||||||||||||||||||||||||
| Granted | 395 | $ | 9.36 | 733 | $ | 8.52 | 606 | $ | 8.30 | ||||||||||||||||||||||||||
| Released | (597) | $ | 9.53 | (467) | $ | 9.09 | (683) | $ | 6.25 | ||||||||||||||||||||||||||
| Forfeited | (235) | $ | 8.54 | (219) | $ | 8.35 | (154) | $ | 8.00 | ||||||||||||||||||||||||||
| Outstanding at end of period: | 794 | $ | 8.71 | 1,231 | $ | 8.41 | 1,184 | $ | 8.07 | ||||||||||||||||||||||||||
Performance Restricted Stock Units
The Company grants Performance Restricted Stock Units ("PRSUs") to select executives and senior officers. The ultimate payouts of these PRSUs may vary between zero and 200% of the target award, based on the Company’s performance over a one-year period and measured based on specific metrics approved by the Compensation Committee of the Board of Directors of the Company (the "Compensation Committee").
For 2025, the Compensation Committee used the following three performance metrics for PRSUs approved in that year.
1.Free Cash Flow defined as net cash provided by operating activities less purchases of property, plant, equipment and intangible assets and is subject to adjustments approved by the Compensation Committee.
2.Adjusted EBITDA defined as net income attributable to the Company plus: interest expense, provision for income taxes, depreciation and amortization, share-based compensation expense and certain acquisition related costs (including transaction due diligence costs and adjustments to the fair value of contingent consideration), foreign exchange (gain) loss and, if applicable, certain special items which are noted.
3.Revenue
For PRSUs awarded in 2024 and 2023, the Compensation Committee utilized the same metrics as 2025 PRSUs, but with revised performance goals.
PRSUs are equity-classified and compensation costs related to PRSUs with performance conditions are initially measured using the fair value of the underlying stock at the date of grant. Compensation costs related to the PRSUs with performance conditions are subsequently adjusted for changes in the expected outcomes of the performance conditions. Earned PRSUs generally vest ratably in four equal annual installments over the four years following completion of the performance period, for a total requisite service period of up to five years, and have no dividend equivalent rights.
A summary of the Company's PRSU activity is presented as follows (in thousands, except per share amounts and years):
| For the year ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Units | Weighted Average Grant-Date Fair Value | Units | Weighted Average Grant-Date Fair Value | Units | Weighted Average Grant-Date Fair Value | ||||||||||||||||||||||||||||||
| Outstanding at beginning of period: | 125 | $ | 9.12 | 60 | $ | 9.33 | 371 | $ | 9.96 | ||||||||||||||||||||||||||
| Granted | 507 | $ | 10.08 | 295 | $ | 8.76 | 282 | $ | 8.50 | ||||||||||||||||||||||||||
| Performance condition adjustments, net | (203) | $ | 8.76 | (201) | $ | 8.76 | (305) | $ | 8.34 | ||||||||||||||||||||||||||
| Released | (28) | $ | 12.37 | (29) | $ | 9.87 | (204) | $ | 6.59 | ||||||||||||||||||||||||||
| Forfeited | (55) | $ | 8.78 | — | $ | 8.02 | (84) | $ | 6.95 | ||||||||||||||||||||||||||
| Outstanding at end of period: | 346 | $ | 9.93 | 125 | $ | 9.12 | 60 | $ | 9.33 | ||||||||||||||||||||||||||
For the years ended December 31, 2025, 2024 and 2023, the company recognized share-based compensation expense within Selling, general and administrative related to PRSU awards of $1.2 million, $0.4 million and $0.7 million, respectively At December 31, 2025, there was $2.5 million of total unrecognized compensation costs related to approximately 346,000 unvested PRSUs. These costs are expected to be recognized over a weighted-average period of approximately 2.4 years.
Upon vesting, PRSUs are generally net share-settled to cover the required minimum withholding tax and the remaining amount is converted into an equivalent number of shares of common stock.
For the years ended December 31, 2025, 2024 and 2023, the income tax benefit recognized on all share based compensation arrangements referenced above was approximately $1.9 million, $1.6 million, and $0.8 million, respectively.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 11, 2026 | Showing above |
| 2024 | Mar 11, 2025 | |
| 2023 | Mar 11, 2024 | |
| 2022 | Mar 15, 2023 | |
| 2021 | Mar 14, 2022 | |
| 2020 | Mar 16, 2021 | |
| 2019 | Mar 27, 2020 | |
| 2018 | Mar 18, 2019 | |
| 2017 | Mar 14, 2018 | |
| 2016 | Aug 15, 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.