National Energy Services Reunited Corp. Stock Compensation Disclosure
In 2024, the NESR shareholders approved the Company’s Amended and Restated 2018 Long Term Incentive Plan (the “Amended LTIP”). A total of 11,500,000 ordinary shares are reserved for issuance under the Amended LTIP. Grants to Board members vest ratably over one year, while employee grants are time-based and generally vest ratably over three years, subject to limited exceptions.
The purpose of the Amended LTIP is to enhance NESR’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to NESR by providing these individuals with equity ownership opportunities. The Company intends to use time-based restricted stock unit awards to reward long-term performance of its employees and executive officers. The Company believes that providing a meaningful portion of the total compensation package in the form of share-based awards will align the incentives of its employees and executive officers with the interests of its shareholders and serve to motivate and retain the individual employees and executive officers.
The following tables set forth the equity-classified LTIP activity for the periods indicated (in US$ thousands, except share and per share amounts):
| Year ended | ||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
| Number of Restricted Shares | Weighted Average Value per Share | Number of Restricted Shares | Weighted per Share | Number of Restricted Shares | Weighted Average per Share | |||||||||||||||||||
| Unvested at Beginning of Period | $ | 8.75 | 842,881 | $ | 9.80 | 2,076,317 | $ | 10.10 | ||||||||||||||||
| Granted | $ | 6.89 | 2,407,500 | $ | 8.75 | 5,000 | $ | 5.04 | ||||||||||||||||
| Vested | ) | $ | 8.75 | (561,548 | ) | $ | 10.35 | (1,049,243 | ) | $ | 8.80 | |||||||||||||
| Forfeited | ) | $ | 7.97 | (58,427 | ) | $ | 8.56 | (189,193 | ) | $ | 9.68 | |||||||||||||
| Unvested at End of Period | $ | 7.84 | 2,630,406 | $ | 8.75 | 842,881 | $ | 9.80 | ||||||||||||||||
At December 31, 2025, and 2024, there were and restricted stock units, respectively, that were vested but not yet issued by the stock transfer agent. The issuance of these vested restricted stock units is subject to the participants setting up their participant accounts with the stock transfer agent. Additionally, during the years ended December 31, 2025, 2024, and 2023, the Company acquired (zero) treasury shares for $ (zero) million, treasury shares for $ million, and treasury shares for $ million, respectively, in connection with employee tax withholding for vested shares.
At December 31, 2025, and 2024, the Company had unrecognized compensation expense of $ million and $ million, respectively, related to unvested LTIP to be recognized on a straight-line basis over a weighted average remaining period of years and years, respectively. Stock-based compensation has been recorded in the Consolidated Statements of Operations as follows (in US$ thousands):
| Year ended | ||||||||||||
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||
| Cost of Services | $ | 4,054 | $ | 2,983 | $ | 3,368 | ||||||
| Selling, general and administrative expenses (excluding Amortization) | 3,049 | 3,395 | ||||||||||
| Net cost | $ | $ | 6,032 | $ | 6,763 | |||||||
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.