MGIC INVESTMENT CORPMTG

MGIC INVESTMENT CORP Stock Compensation Disclosure

10-KFiled Feb 25, 20263 min read
Share-based Compensation Plans
Our current omnibus incentive plan was adopted on April 24, 2025. When the 2025 plan was adopted, no further awards could be made under our previous 2020 plan. The purpose of the 2025 plan is to motivate and incentivize performance by, and to retain the services of, key employees and non-employee directors through receipt of equity-based and other incentive awards under the plan. Awards issued under the plan that are subsequently forfeited will not count against the limit on the maximum number of shares that may be issued under the plan. The 2025 plan provides for the award of stock options, stock appreciation rights, restricted stock and restricted stock units, as well as cash incentive awards. No awards may be granted after April 24, 2035 under the 2025 plan. The vesting provisions of options, restricted stock and restricted stock units are determined at the time of grant. At December 31, 2025, 11.0 million shares were available for future grant under the 2025 plan.

Under the fair value method, the compensation cost of awards granted under our share-based compensation plans is measured at the grant date based on the fair value of the awards and is recognized over the service period which generally corresponds to the vesting period. Awards under our plans generally vest over periods ranging from one to three years, although awards to our non-employee directors vest immediately. The grant date fair value of awards granted to executive officers and non-employee directors in 2025, is calculated based on the stock price as of the grant date, discounted to account for the one year post-vesting holding period to which the awards are subject. Table 12.1 summarizes the compensation cost recognized and charged against income for share-based awards.
Share-based Compensation Cost
Table12.1Years ended December 31,
 (in thousands)
202520242023
Compensation cost recognized for share-based awards$24,332 $31,227 31,537 
Income tax benefit related to share-based compensation cost1,268 2,383 2,870 
Share-based compensation cost, net$23,064 $28,844 28,667 

As of December 31, 2025, the total unrecognized compensation cost for all of our outstanding share-based awards was $16.4 million. A portion of the unrecognized costs associated with the outstanding awards may or may not be recognized in future periods, depending upon whether or not the performance and/or service conditions are met. The cost associated with the outstanding share-based awards is expected to be recognized over a weighted-average period of 1.5 years.
Table 12.2 summarizes restricted stock or restricted stock unit (collectively called “restricted stock”) activity during 2025.
Restricted Stock
Table12.2
 Weighted Average Grant Date Fair Market ValueShares
Restricted stock outstanding at December 31, 2024$16.04 2,827,801 
Granted (1)
24.45 724,339 
Performance adjustment (2)
— 732,231 
Vested15.67 (1,844,424)
Forfeited23.21 (45,674)
Restricted stock outstanding at December 31, 2025$18.54 2,394,273 
(1) Approximately 47% of the shares granted in 2025 are subject to performance conditions under which the target number of shares granted may vest from 0% to 200%.
(2) Amount represents the difference between the number of shares vested at settlement with performance conditions and the number of target shares at the grant date in 2022.

At December 31, 2025, the 2.4 million shares of restricted stock outstanding consisted of 1.7 million shares that are subject to performance conditions, 0.5 million shares that are subject only to service conditions, and 0.2 million shares related to non-employee director shares. The weighted-average grant date fair value of restricted stock granted during 2024 and 2023 was $19.81 and $14.17, respectively. Prior to 2025, the fair value of restricted stock granted was the closing price of the common stock on the New York Stock Exchange on the date of grant or previous trading day if the New York Stock Exchange was closed on the date of grant. The total fair value of restricted stock vested during 2025, 2024 and 2023 was $44.9 million, $43.2 million, and $17.3 million, respectively.
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Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 26, 2025
2023Feb 21, 2024
2022Feb 22, 2023
2021Feb 23, 2022
2020Feb 23, 2021
2019Feb 24, 2020
2018Feb 22, 2019
2017Feb 23, 2018
2016Feb 21, 2017
2015Feb 26, 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.

Other Available Disclosures

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