NATIONAL HEALTH INVESTORS INCNHI
NATIONAL HEALTH INVESTORS INC Stock Compensation Disclosure
Share-Based Compensation
Our outstanding stock incentive awards have been granted under the 2012 Stock Incentive Plan and the 2019 Stock Incentive Plan, as amended and restated (the “2019 Plan”). As of December 31, 2025, all outstanding awards under the 2012 Stock Incentive Plan have vested. No further grants are permitted under this plan.
The Compensation Committee of our Board of Directors has authorized issuance of up to 6.0 million shares of our common stock under the 2019 Plan. Awards may be in the form of options, restricted stock or restricted stock units, subject to certain conditions and restrictions as specified in the 2019 Plan. Under the terms of the 2019 Plan, the Compensation Committee has the authority to select participants, to designate whether an award granted is an incentive stock option (“ISO”), a non-qualified option or a stock appreciation right, to establish the number of shares of common stock issued upon exercise of an option and to establish the vesting provisions and terms of awards. Individual awards may vest over periods up to five years and the term of an award may not exceed 10 years from the grant date. The exercise price of any ISOs granted may not be less than 100.0% of the fair market value of a share of our common stock on the grant date. The exercise price of non-qualified options may not be less than 100.0% of the fair market value of a share of our common stock on the grant date unless it is approved by the Compensation Committee. As of December 31, 2025, we had 3,385,671 shares of common stock available for future grants under the 2019 Plan.
Share-Based Compensation Expense
A summary of share-based compensation expense, net of forfeitures, by award type follows ($ in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Stock options | $ | 4,310 | $ | 3,506 | $ | 4,295 | |||||||||||
| Restricted stock awards | 1,266 | 676 | 310 | ||||||||||||||
| Total share-based compensation expense | $ | 5,576 | $ | 4,182 | $ | 4,605 | |||||||||||
As of December 31, 2025, we had unrecognized share-based compensation expense of $3.1 million that is expected to be recognized over the following years: 2026 - $2.0 million, 2027 - $0.7 million, 2028 - $0.3 million and 2029 - $0.1 million.
Restricted Stock Awards
Restricted stock awards vest over five years, with 20.0% vesting on each anniversary of the grant date beginning with the grant date, and certain of the awards are subject to a one-year post-vesting hold. The holders of restricted stock awards have a non-forfeitable right to dividends or dividend equivalents during the vesting periods.
During the years ended December 31, 2025, 2024 and 2023, we granted 29,500, 15,000 and 21,000 restricted stock awards, respectively, with weighted average grant date fair values of $73.34, $57.76 and $49.30, respectively, to our executive officers under the 2019 Plan. During the years ended December 31, 2025 and 2024, 7,200 and 3,970 restricted stock awards, respectively, vested with weighted average grant date fair values of $52.83 and $49.30, respectively. We had no vestings of restricted stock awards during the year ended December 31, 2023. Additionally, we did not have any forfeitures during each of the years ended December 31, 2025, 2024 and 2023. As of December 31, 2025 and 2024, 54,100 and 31,800 restricted stock awards, respectively, were outstanding with weighted average grant date fair values of $64.29 and $53.29, respectively. As of December 31, 2025 the weighted average remaining vesting period of restricted stock awards was 3.5 years.
Stock Options
The following assumptions were used to estimate the fair value of our stock options at the respective grant dates:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk-free interest rate | 3.94% | 4.49% | 4.56% | ||||||||||||||
| Expected volatility | 24.0% | 26.1% | 39.0% | ||||||||||||||
| Dividend yield | 5.2% | 6.4% | 6.9% | ||||||||||||||
| Expected lives | 2.9 years | 2.9 years | 2.9 years | ||||||||||||||
A summary of the activity related to our stock options follows:
| Weighted | |||||||||||||||||
| Weighted | Average | ||||||||||||||||
| Average | Remaining | ||||||||||||||||
| Number | Exercise Price | Contractual | |||||||||||||||
| of Options | Per Share | Life (Years) | |||||||||||||||
| Options outstanding at December 31, 2022 | 2,216,175 | $70.97 | |||||||||||||||
| Granted | 385,500 | 54.73 | |||||||||||||||
| Exercised | (5,166) | 53.41 | |||||||||||||||
| Forfeited | (61,168) | 66.44 | |||||||||||||||
| Expired | (88,170) | 64.33 | |||||||||||||||
| Options outstanding at December 31, 2023 | 2,447,171 | 68.80 | |||||||||||||||
| Granted | 431,000 | 57.76 | |||||||||||||||
| Exercised | (1,065,119) | 58.24 | |||||||||||||||
| Forfeited | (95,000) | 68.00 | |||||||||||||||
| Expired | (301,837) | 79.96 | |||||||||||||||
| Options outstanding at December 31, 2024 | 1,416,215 | 71.06 | |||||||||||||||
| Granted | 579,500 | 73.43 | |||||||||||||||
| Exercised | (309,713) | 62.58 | |||||||||||||||
| Forfeited | (70,503) | 64.79 | |||||||||||||||
| Expired | (491,000) | 90.79 | |||||||||||||||
| Options outstanding at December 31, 2025 | 1,124,499 | 66.39 | 2.9 | ||||||||||||||
| Options exercisable at December 31, 2025 | 719,311 | 64.60 | 2.3 | ||||||||||||||
During the years ended December 31, 2025, 2024 and 2023, the weighted average fair value of options granted was $9.34, $7.36 and $10.56, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2025, 2024 and 2023 was $4.4 million, $11.8 million and less than $0.1 million, respectively. As of December 31, 2025, the aggregate intrinsic values of our stock options outstanding and exercisable were $11.2 million and $8.5 million, respectively.
A summary of activity related to our non-vested stock options for the year ended December 31, 2025 follows:
| Weighted | |||||||||||
| Average | |||||||||||
| Grant Date | |||||||||||
| Number of | Fair Value | ||||||||||
| Options | Per Share | ||||||||||
| Non-vested options outstanding at the beginning of the year | 340,694 | $ | 8.71 | ||||||||
| Granted | 579,500 | 9.34 | |||||||||
| Non-vested options forfeited | (70,503) | 8.86 | |||||||||
| Vested | (444,503) | 9.28 | |||||||||
| Non-vested options outstanding at the end of the year | 405,188 | 8.95 | |||||||||
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.