NMI Holdings, Inc.NMIH
NMI Holdings, Inc. Stock Compensation Disclosure
Share-Based Compensation
Share-based compensation includes stock options, service-based RSUs and performance and service-based RSUs granted under our 2012 Stock Incentive Plan (2012 Plan) and our Amended and Restated 2014 Omnibus Incentive Plan (2014 Plan, and together with the 2012 Plan, the Stock Plans).
The 2012 Plan was approved by the Board on April 16, 2012 and authorized 5.5 million shares of common stock to be reserved for issuance, with limits of 3.85 million shares available for stock option issuance and 1.65 million shares available for RSU issuance. The 2012 Plan expired on April 24, 2022, with all unissued shares of common stock remaining under the 2012 Plan expiring thereafter.
The 2014 Plan was originally approved by our stockholders at our annual meeting on May 8, 2014 and authorized 4.0 million shares of common stock to be reserved for issuance. On May 11, 2017, our stockholders approved amendments to the 2014 Plan at our annual stockholder meeting, authorizing an additional 2.0 million shares of common stock for issuance, increasing the total shares of common stock reserved for issuance under the plan to 6.0 million with the full amount available to be issued as either RSUs or options. On May 12, 2022, our stockholders approved further amendments to the 2014 Plan, authorizing an additional 2.25 million shares of common stock for issuance, increasing the total shares of common stock reserved for issuance under the plan to 8.25 million with the full amount available to be issued as either RSUs or options. These shares may be either authorized as unissued shares or treasury shares. Options granted under the 2014 Plan are non-qualified stock options and may be granted to employees, directors and other key persons. The exercise price per share for options covered by the 2014 Plan is determined by the Board at the time of grant, but shall not be less than the fair market value of our common stock, defined as the closing price of our common stock, on the date of the grant. The term of the stock option grants is established by the Board, but no stock option shall be exercisable more than ten years after the date the stock option was granted. The vesting period of the stock option grants is also established by the Board at the time of grant and is generally expected to be a three-year period.
For the years ended December 31, 2025, 2024 and 2023, we incurred $20.2 million, $19.8 million and $16.9 million, respectively, of expenses related to awards granted under the Stock Plans and we recognized associated gross income tax benefits of $4.2 million, $4.2 million and $3.6 million during each respective period.
A summary of option activity during the year ended December 31, 2025 is as follows:
| For the year ended December 31, 2025 | Shares | Weighted Average Grant Date Fair Value per Share | Weighted Average Exercise Price | ||||||||||||||
| (Shares in Thousands) | |||||||||||||||||
| Options outstanding at December 31, 2024 | 730 | $ | 5.61 | $ | 15.53 | ||||||||||||
| Options granted | — | — | — | ||||||||||||||
| Options exercised | — | — | — | ||||||||||||||
| Options forfeited | — | — | — | ||||||||||||||
| Options expired | — | — | — | ||||||||||||||
Options outstanding at December 31, 2025 (1) | 730 | $ | 5.61 | $ | 15.53 | ||||||||||||
(1) The weighted average remaining contractual life of such options was 1.81 years as of December 31, 2025. The aggregate intrinsic value of such fully vested and exercisable options was $18.4 million as of December 31, 2025.
No stock options were granted during the years ended December 31, 2025, 2024 and 2023. As of December 31, 2025, all outstanding options had vested and no unrecognized compensation cost related to non-vested stock options remained.
A summary of RSU activity during the year ended December 31, 2025 is as follows:
| For the year ended December 31, 2025 | Shares | Weighted Average Grant Date Fair Value per Share | |||||||||
| (Shares in Thousands) | |||||||||||
| Non-vested restricted stock units at December 31, 2024 | 1,281 | $ | 26.75 | ||||||||
| Restricted stock units granted | 567 | 35.43 | |||||||||
Performance adjustment (1) | 130 | 25.83 | |||||||||
Restricted stock units vested (2) | (694) | 26.09 | |||||||||
| Restricted stock units forfeited | (42) | 30.88 | |||||||||
| Non-vested restricted stock units at December 31, 2025 | 1,242 | $ | 30.91 | ||||||||
(1) Performance adjustment represents the difference between the number of target shares at grant date and the number of shares vested at settlement, which can range from 0% to 200% of target achievement depending on results over the applicable performance period.
(2) Represents amounts vested during the year, including the impact of performance adjustments for service and performance-based RSUs.
At December 31, 2025, we had 1.2 million granted and non-vested RSUs with a weighted average remaining contractual life of 1.33 years, consisting of 0.7 million RSUs that are subject to service-based vesting requirements and 0.5 million RSUs that are subject to performance and service-based vesting requirements. The total fair value of RSUs vested during the year ended December 31, 2025 was $18.1 million. As of December 31, 2025, $14.7 million of total unrecognized compensation costs related to non-vested RSUs remained. Total remaining unrecognized compensation costs related to non-vested RSUs outstanding at December 31, 2025 will be recognized on a weighted average basis over 1.46 years.
Non-vested RSUs subject to service-based vesting requirements vest over a period ranging from to three years. Non-vested RSUs subject to performance and service-based vesting requirements vest after a three-year period, with the number of shares issued upon vesting based on the actual achievement of compound annual book value per share growth compared to a target established at the time of grant. The grant date fair value of non-vested RSUs is measured as the closing price of our common stock on the date of grant less the present value of anticipated dividends to be paid during the vesting period.
401(k) Savings Plan
We offer our employees a 401(k) Savings Plan (401(k) Plan) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code (IRC). Under the 401(k) Plan, we match up to 100% of eligible employees' pre-tax contributions up to 5% of eligible compensation. During the years ended December 31, 2025, 2024 and 2023, we incurred approximately $2.0 million, $2.1 million and $1.9 million of expense related to our matching 401(k) Plan contributions, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 15, 2023 | |
| 2021 | Feb 16, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Feb 14, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 19, 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.