MANNATECH INCMTEX
MANNATECH INC Stock Compensation Disclosure
STOCK BASED COMPENSATION
Stock Option Plan
The Company currently has one active stock-based compensation plan, the 2017 Plan, which was adopted by the Company’s Board of Directors on April 17, 2017 and was approved by its shareholders on June 8, 2017, and subsequently amended by the Board in February 2019, which was approved by the Company's shareholders on June 11, 2019. The Board has reserved a maximum of 370,000 shares of our common stock that may be issued under the 2017 Plan (subject to adjustments for stock splits, stock dividends or other changes in corporate capitalization). As of December 31, 2024, the Company had a total of 120,304 shares available for grant under the 2017 Plan, which expires on April 16, 2027.
The 2017 Plan provides for grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock and performance stock units to our employees, board members, and consultants. However, only employees of the Company and its corporate subsidiaries are eligible to receive incentive stock options. The exercise price per share for all stock options will be no less than the market value of a share of common stock on the date of grant. Any incentive stock option granted to an employee owning more than 10% of our common stock will have an exercise price of no less than 110% of our common stock’s market value on the grant date.
The majority of stock options vest over or years, and generally are granted with a term of years, or years in the case of an incentive option granted to an employee who owns more than 10% of our common stock.
The Company is required to measure and recognize compensation expense related to any outstanding and unvested stock options in its consolidated financial statements using a fair-value based option-pricing model. The Company records stock-based compensation expense related to granting stock options in selling and administrative expenses. The fair value of the stock option award is calculated using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires us to apply judgment and use subjective assumptions about expected dividend yields, risk-free interest rates, price volatility related to the underlying shares, and the expected stock option life, including forfeitures.
The following assumptions were used to calculate the fair value of stock options granted each year:
| 2024 | 2023 | ||||||||||||||||
| Dividend yield: | 0.0 | % | 6.4 | % | |||||||||||||
| Risk-free interest rate: | 4.3 - 4.5 | % | 4.0 | % | |||||||||||||
| Expected market price volatility: | 64.2 - 70.2 | % | 66.5 | % | |||||||||||||
| Weighted average expected life of stock options: | 4.5 years | 4.5 years | |||||||||||||||
The computation of the expected volatility assumption used in the Black-Scholes calculations for new grants is based on historical volatility of the Company’s stock. The expected life assumptions are based on the Company’s historical employee exercise and forfeiture behavior.
During 2024 and 2023, the Company issued 0 and 2,000 treasury shares upon the exercise of options and granted 16,167 and 5,000 new options to management and members of the Board, respectively. Options exercised during the years ending December 31, 2024 and 2023 had a total intrinsic value, calculated as the difference between the exercise date stock price and the exercise price, $0 and less than $0.1 million, respectively.
The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2024 and 2023 was $4.48 and $4.32 per share, respectively. The total fair value of options vested during each of the years ended December 31, 2024 and 2023 was $0.1 million.
A summary of changes in stock options outstanding during the year ended December 31, 2024, is as follows:
| 2024 | |||||||||||||||||||||||
| Number of Options (in thousands) | Weighted average exercise price | Weighted average remaining contractual life (in years) | Aggregate intrinsic value (in thousands) | ||||||||||||||||||||
| Outstanding at beginning of year | 235 | $ | 17.73 | ||||||||||||||||||||
| Granted | 16 | 7.70 | |||||||||||||||||||||
| Expired | (101) | 16.94 | |||||||||||||||||||||
| Outstanding at end of year | 150 | $ | 17.19 | 4.26 | $ | 96,815 | |||||||||||||||||
| Options exercisable at year end | 139 | $ | 17.91 | 3.85 | $ | 39,264 | |||||||||||||||||
Valuation and Expense Information Under FASB ASC Topic 718 Compensation – Stock Compensation
On March 11, 2024, the Company issued a grant of 8,187 restricted stock units (“RSUs”) of our common stock to our Chief Executive Officer. Under the terms of the stock grant, the grant is available for 18 months and will not vest until Mannatech's stock price averages $15.00 per share (i.e., the volume weighted price) for 60 consecutive days. If the contingency is not met within the 18-month period, the grant will lapse and will not be awarded.
The Company is required to measure and recognize compensation expense related to the grant in its consolidated financial statements using a fair-value based model. The Company has determined the fair value of the grant is $0.1 million. Accordingly, the Company has recognized compensation expense related to the grant of $32 thousand for the year ended December 31, 2024.
A summary of changes in restricted stock units outstanding during the year ended December 31, 2024, is as follows:
| Number of RSUs (in thousands) | Weighted average grant date fair value | ||||||||||
| Outstanding at beginning of year | — | $ | — | ||||||||
| Granted | 8,187 | 15.00 | |||||||||
| Outstanding at end of year | 8,187 | $ | 15.00 | ||||||||
The Company recorded the following amounts related to the expense of the fair values of options and RSUs during the years ended December 31, 2024 and 2023 (in thousands):
| 2024 | 2023 | ||||||||||
| Total gross compensation expense | $ | 92 | $ | 43 | |||||||
| Total tax benefit associated with compensation expense | (12) | (10) | |||||||||
| Total net compensation expense | $ | 80 | $ | 33 | |||||||
If we grant additional stock options in the future, we would be required to recognize additional compensation expense over the vesting period of such stock options in our consolidated statement of operations.
As of December 31, 2024, the Company had $0.1 million of total unrecognized compensation expense related to stock options and RSUs currently outstanding, to be recognized in future years over a weighted-average period of 0.95 years, ending December 31, as follows (in thousands):
| Years ending December 31, | ||||||||
| 2025 | 2026 | |||||||
| Total gross unrecognized compensation expense | $ | 51 | $ | — | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 26, 2025 | Showing above |
| 2023 | Mar 28, 2024 | |
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.