Murphy USA Inc.MUSA
Murphy USA Inc. Stock Compensation Disclosure
Incentive Plans
DEFERRED STOCK UNITS (2013 Directors Plan) — Effective January 1, 2023, non-employee directors could elect to receive their annual cash retainers in the form of DSUs. Each DSU represents the right to receive one share of common stock following the completion of a director's service. At December 31, 2025 there were 426 Director DSUs outstanding with an average grant date fair value of $259.87 per unit under the 2013 Directors Plan.
Equity Awards
The Murphy USA 2013 Long-Term Incentive Plan (the "MUSA 2013 Plan") authorized the Executive Compensation Committee of our Board of Directors (“the Committee”) to grant non-qualified or incentive stock options, stock appreciation rights, stock awards (including restricted stock and restricted stock unit awards), dividend equivalent units, cash awards, and performance awards to our employees. No more than 5.5 million shares of MUSA common stock may be delivered under the MUSA 2013 Plan and no more than 1 million shares of common stock may be awarded to any one employee, subject to adjustment for changes in capitalization. The maximum cash amount payable pursuant to any “performance-based” award to any participant in any calendar year is $5.0 million.
On May 4, 2023, the 2023 Omnibus Incentive Compensation Plan (the "MUSA 2023 Plan") was approved by the Company's shareholders and became effective for all future grants for both employees and directors. The MUSA 2023 Plan replaced the MUSA 2013 Plan and the 2013 Directors Plan, each of which expired on August 8, 2023. The MUSA 2023 Plan authorizes the Committee to grant to non-employee directors, employees, and consultants of the Company, or any of its subsidiaries, stock options (incentive stock options ("ISOs") and nonqualified stock options ("NQSO")), stock appreciation rights ("SARs"), restricted stock, restricted stock units ("RSUs"), performance awards or other cash-based awards and other stock-based awards. The maximum number of shares available for issuance under the MUSA 2023 Plan shall not exceed in the aggregate 1.725 million shares (subject to certain adjustments). During the period from May 4, 2023 to December 31, 2025, the Company granted a total of 191,075 awards from the MUSA 2023 Plan, which leaves 1,533,925 remaining shares. At present, the Company expects to issue all shares that vest out of our existing treasury shares rather than issuing new common shares.
Beginning with its initial quarterly dividend in December 2020, the Company has issued dividend equivalent units ("DEUs") on all outstanding, unvested equity awards (except stock options) in an amount commensurate with regular quarterly dividends paid on common stock. The terms of the DEUs mirror the underlying awards and will only vest if the related award vests. DEUs issued are included with grants in each respective table as applicable.
STOCK OPTIONS – The Committee fixes the option price of each option granted at no less than fair market value ("FMV") on the date of the grant and fixes the option term at no more than 7 years from such date. Most of the nonqualified stock options granted by the Committee in 2025 to certain employees were granted in February 2025.
Following are the assumptions used by the Company to value the original awards:
| Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Fair value per option grant | $ | 154.07 | $ | 133.91 | $ | 88.53 | ||||||||||||||
| Assumptions | ||||||||||||||||||||
| Dividend yield | 0.4 | % | 0.4 | % | 0.5 | % | ||||||||||||||
| Expected volatility | 27.9 | % | 32.9 | % | 33.1 | % | ||||||||||||||
| Risk-free interest rate | 4.5 | % | 4.3 | % | 3.8 | % | ||||||||||||||
| Expected life (years) | 4.8 | 4.8 | 4.9 | |||||||||||||||||
| Stock price at valuation date | $ | 492.22 | $ | 391.54 | $ | 263.48 | ||||||||||||||
Changes in options outstanding for Company employees during the period from December 31, 2024 to December 31, 2025 are presented in the following table:
| Options | Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (Millions of Dollars) | |||||||||||||||||||
| Outstanding at December 31, 2024 | 259,750 | $ | 180.68 | ||||||||||||||||||||
| Granted | 28,900 | $ | 492.22 | ||||||||||||||||||||
| Exercised | (36,200) | $ | 99.28 | ||||||||||||||||||||
| Forfeited | (7,350) | $ | 410.81 | ||||||||||||||||||||
| Outstanding at December 31, 2025 | 245,100 | $ | 222.54 | 3.1 | $ | 46.7 | |||||||||||||||||
| Exercisable at December 31, 2025 | 172,790 | $ | 148.96 | 2.2 | $ | 44.0 | |||||||||||||||||
Additional information about stock options outstanding at December 31, 2025 is shown below:
| Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||||
| Range of Exercise Prices per Option | No. of Options | Avg. Life Remaining in Years | No. of Options | Avg. Life Remaining in Years | ||||||||||||||||||||||||||||
| $0.00 | to | $99.99 | 8,600 | 0.2 | 8,600 | 0.2 | ||||||||||||||||||||||||||
| $100.00 | to | $149.99 | 98,140 | 1.6 | 98,140 | 1.6 | ||||||||||||||||||||||||||
| $150.00 | to | $249.99 | 47,900 | 3.0 | 47,900 | 3.0 | ||||||||||||||||||||||||||
| $250.00 | to | $349.99 | 34,550 | 3.9 | 17,750 | 3.7 | ||||||||||||||||||||||||||
| $350.00 | to | $449.99 | 29,710 | 5.1 | 400 | 1.2 | ||||||||||||||||||||||||||
| $450.00 | & | Above | 26,200 | 6.1 | — | — | ||||||||||||||||||||||||||
| 245,100 | 3.1 | 172,790 | 2.2 | |||||||||||||||||||||||||||||
RESTRICTED STOCK UNITS – The Committee has granted time-based RSUs as part of the compensation plan for its executives and certain other employees since its inception. The awards granted in the current year were under the MUSA 2023 Plan, are valued at the grant date fair value, and vest over three years. The Committee has also granted time-based RSUs to the non-employee directors of the Company as part of their overall compensation package for being a member of the Board of Directors, which vest at the end of one year. For annual equity grants to non-employee directors, the directors may elect to defer receipt of their vested RSUs until their service ends. These RSUs are included in the RSU table below, will vest in one year, and will thereafter become deferred stock units.
Changes in RSUs outstanding during the period from December 31, 2024 to December 31, 2025 are presented in the following table:
| RSUs | Number of Units | Weighted-Average Grant Date Fair Value | Total Fair Value (Millions of Dollars) | ||||||||||||||
| Outstanding at December 31, 2024 | 98,214 | $ | 285.60 | ||||||||||||||
| Granted | 29,467 | $ | 462.80 | ||||||||||||||
| Vested and issued | (38,968) | $ | 212.35 | $ | 17.9 | ||||||||||||
| Forfeited | (6,798) | $ | 386.91 | ||||||||||||||
| Outstanding at December 31, 2025 | 81,915 | $ | 376.60 | $ | 33.1 | ||||||||||||
DIRECTOR DEFERRED STOCK UNITS (MUSA 2023 Plan) — Non-employee directors can elect to receive their annual cash retainers in the form of Deferred Stock Units ("DSUs"). The DSUs are recognized at their fair value on the date of the grant. Director fees which are deferred into DSUs are calculated and expensed each quarter by taking fees earned during the quarter and dividing by the closing price of our common stock on the last trading day of the quarter. Each DSU represents the right to receive one share of common stock following the completion of a director's service. During the period ended December 31, 2025, we granted 865 DSUs and recorded director expense of $0.4 million related to the grants. At December 31, 2025, there were 2,604 Director DSUs vested and outstanding with an average grant date fair value of $399.79 per unit under the MUSA 2023 Plan.
PERFORMANCE-BASED RESTRICTED STOCK UNITS – The Committee has granted performance-based restricted stock units (performance units or "PSUs") to its executives and certain other employees. In February 2025, the Committee awarded PSUs to certain employees. Half of the PSUs vest based on a three-year return on average capital employed ("ROACE") calculation and the other half vest based on a three-year total shareholder return ("TSR") calculation that compares MUSA to a group of 17 peer companies. The portion of the awards that vest based on TSR qualify as a market condition and must be valued using a Monte Carlo valuation model. For the TSR portion of the awards, the fair value was determined to be $674.28 per unit. For
the ROACE portion of the awards, the valuation was based on the grant date fair value of $492.22 per unit and the number of awards will be periodically assessed to determine the probability of vesting.
Changes in PSUs outstanding for Company employees during the period from December 31, 2024 to December 31, 2025 are presented in the following table:
| Employee PSUs | Number of Units | Weighted-Average Grant Date Fair Value | Total Fair Value (Millions of Dollars) | ||||||||||||||
| Outstanding at December 31, 2024 | 77,395 | $ | 320.05 | ||||||||||||||
| Granted | 49,371 | $ | 583.25 | ||||||||||||||
| Vested and issued | (61,288) | $ | 221.39 | $ | 29.7 | ||||||||||||
| Forfeited | (5,874) | $ | 466.58 | ||||||||||||||
| Outstanding at December 31, 2025 | 59,604 | $ | 438.28 | $ | 24.1 | ||||||||||||
2013 Stock Plan for Non-employee Directors
Effective August 8, 2013, Murphy USA adopted the 2013 Murphy USA Stock Plan for Non-employee Directors (the “2013 Directors Plan”). The directors for Murphy USA are compensated with a mixture of cash payments and equity-based awards.
RESTRICTED STOCK UNITS (2013 Directors Plan) – The Committee has also granted time based RSUs to the non-employee directors of the Company as part of their overall compensation package for being a member of the Board of Directors. Awards prior to 2023 vest at the end of three years and those granted in 2023 vested at the end of one year.
Changes in Director RSUs outstanding for Company non-employee directors during the period from December 31, 2024 to December 31, 2025 are presented in the following table:
| 2013 Plan — Director RSUs | Number of Units | Weighted-Average Grant Date Fair Value | Total Fair Value (Millions of Dollars) | ||||||||||||||
| Outstanding at December 31, 2024 | 9,436 | $ | 196.38 | ||||||||||||||
| Granted | 12 | $ | 406.93 | ||||||||||||||
| Vested and issued | (7,174) | $ | 175.84 | $ | 3.5 | ||||||||||||
| Outstanding at December 31, 2025 | 2,274 | $ | 261.51 | $ | 0.9 | ||||||||||||
Amounts recognized in the financial statements by the Company with respect to all share-based compensation plans are shown in the following table:
| Years Ended December 31, | ||||||||||||||||||||
| (Millions of dollars) | 2025 | 2024 | 2023 | |||||||||||||||||
| Compensation charged against income before income tax benefit | $ | 28.6 | $ | 22.9 | $ | 21.8 | ||||||||||||||
| Related income tax benefit recognized in income | $ | 6.0 | $ | 4.8 | $ | 4.6 | ||||||||||||||
As of December 31, 2025, there was $18.3 million in compensation costs to be expensed over approximately the next 2.2 years related to unvested share-based compensation arrangements granted by the
Company. Employees who have stock options are required to net settle their options in shares, after applicable statutory withholding taxes are considered, upon each stock option exercise. Therefore, no cash is received upon exercise. Total income tax benefits realized from tax deductions related to stock option exercises under share-based payment arrangements were $0.4 million, $1.1 million and $0.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 15, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 19, 2021 | |
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.