NET Power Inc.NPWR
NET Power Inc. Stock Compensation Disclosure
NOTE 10 — Share-Based Compensation
The 2023 Omnibus Incentive Plan reserved 20,468,545 shares of Class A Common Stock for issuance as equity awards. The quantity of shares of Class A Common Stock reserved for grants under the 2023 Omnibus Incentive Plan will be subject to an annual increase on the first day of each calendar year beginning January 1, 2024, and ending and including January 1, 2033, equal to the lesser of (i) 5% of the aggregate number of shares outstanding on December 31 of the immediately preceding calendar year and (ii) any such smaller number of shares as is determined by the Board.
The following table presents the aggregate share-based compensation expense, net of forfeitures, for the following periods:
| Year Ended December 31, | ||||||||||||||
| $ in thousands | 2025 | 2024 | ||||||||||||
| Share-based compensation expense | $ | 46,434 | $ | 33,666 | ||||||||||
OpCo Unit Awards
The following table summarizes the activity of employee equity awards granted under previous programs comprised of Class A OpCo Units and the corresponding quantity of shares of Class B Common Stock for the year ended December 31, 2025:
| $ in thousands | Quantity | Calculated Value | ||||||||||||
| Unvested, beginning of period | 241,670 | $ | 5.66 | |||||||||||
| Vested | (241,670) | 5.66 | ||||||||||||
| Unvested, end of period | — | $ | — | |||||||||||
Performance Stock Units
As of December 31, 2025, there was $0.8 million of unrecognized share-based compensation expense related to unvested performance stock units (“PSUs”), which the Company expects to be recognized over a weighted-average period of 1.9 years.
During 2025, there have been 524,000 PSUs awarded to certain executives for which the vesting occurs upon the achievement of specific market-based conditions related to the Company’s financial performance over a three-year period, modified based on the Company’s Relative Total Shareholder Return (“TSR”) and subject to final vesting based on the participant’s continued employment through the end of the requisite service period. The amount of awards that will ultimately vest for the PSU can range from 0% to 200% based on the TSR calculated over a three-year period. The fair value of the PSUs were determined using the Monte Carlo Simulation model and are being expensed over the three-year vesting period.
The assumptions used to calculate the fair value of the PSUs awards were:
| 2025 | 2024 | |||||||||||||
| Weighted average expected life | 3 years | 3 years | ||||||||||||
| Risk-free interest rates | 3.9 | % | 4.4 | % | ||||||||||
| Expected volatility | 80.0 | % | 68.0 | % | ||||||||||
The following table presents a summary of PSU activity as of December 31, 2025 and the changes during the year ended December 31, 2025:
| In thousands, except per share data | Quantity | Weighted-Average Grant Date Fair Value Per Share | ||||||||||||
| Unvested, beginning of period | 128 | $ | 16.24 | |||||||||||
| Granted | 524 | 2.89 | ||||||||||||
| Forfeited | (330) | 5.03 | ||||||||||||
| Unvested, end of period | 322 | $ | 6.00 | |||||||||||
Stock Options
As of December 31, 2025, there was $2.1 million of unrecognized share-based compensation expense related to stock options, which the Company expects to be recognized over a weighted-average period of 0.4 years.
The stock options granted to employees during 2025 vest on the one-year anniversary of the date of grant. The Company will recognize compensation expense from the grant date through the expected vesting date.
The stock options granted to the Chief Executive Officer during 2024 vest upon the satisfaction of the following performance and market conditions: (i) commercial operations achieved by the Company’s first utility-scale power plant utilizing Oxy-Combustion Cycle technology, (ii) a fully-executed license agreement and final investment decision achieved for another utility-scale power plant utilizing Oxy-Combustion Cycle technology, and (iii) a closing share price above $30 per share for 60 consecutive trading days (or the equivalent when adjusted for any stock splits, reverse stock splits, and cumulative dividends paid per share until the vesting date). The Company will recognize compensation expense from the date the performance conditions become probable through the expected vesting date. As of December 31, 2025, the performance conditions are not
considered probable; therefore, no expense has been recognized related to these stock options.
The fair value of the Company’s stock option grants were estimated utilizing the following assumptions and range of assumptions using the Black-Scholes Merton model for the years below:
| 2025 | 2024 | |||||||||||||
| Weighted average expected life | 3 years | 3.35 years | ||||||||||||
| Risk-free interest rates | 3.58% - 3.87% | 4.27 | % | |||||||||||
| Expected volatility | 86.0% - 89.6% | 80.0 | % | |||||||||||
The following table presents a summary of stock option activity during the year ended December 31, 2025:
| In thousands, except per share data | Quantity | Weighted-Average Exercise Price Per Share | ||||||||||||
| Unvested, beginning of period | 2,460 | $ | 11.30 | |||||||||||
| Granted | 4,172 | 2.14 | ||||||||||||
| Forfeited | (141) | 2.13 | ||||||||||||
| Unvested, end of period | 6,491 | $ | 5.62 | |||||||||||
The aggregate intrinsic value and weighted average remaining contractual term for stock options outstanding at December 31, 2025 was $0.6 million and 5.88 years. There were no stock options exercisable at December 31, 2025.
Restricted Stock Units
As of December 31, 2025, there was $4.9 million of unrecognized share-based compensation expense related to unvested restricted stock units (“RSUs”), which the Company expects to recognize over a weighted-average period of 1.6 years.
Generally, RSUs granted to employees and the majority of executives either cliff-vest on the three-year anniversary of the date of grant or vest ratably on each anniversary of the date of grant over a three-year period. Annual awards granted to independent directors cliff-vest on the first anniversary of each award’s grant date.
Certain RSUs awarded to certain legacy employees as permitted by the Business Combination Agreement (the “Make-Whole Awards”) vest upon: (i) commercial operations achieved by the Company’s first utility-scale power plant utilizing Oxy-Combustion Cycle technology, and (ii) a fully-executed license agreement and final investment decision achieved for another utility-scale power plant utilizing Oxy-Combustion Cycle technology. The awards expire ten years from the grant date. The Company will record compensation expense related to the Make-Whole Awards from the date the performance conditions are considered probable through the expected vesting dates. As of December 31, 2025, there were 1,257,467 shares unvested and outstanding. The performance conditions are not considered probable as of December 31, 2025, therefore, no compensation cost has been recognized related to the Make-Whole Awards.
The following table presents a summary of RSU activity during the year ended December 31, 2025:
| In thousands, except per share data | Quantity | Weighted-Average Grant Date Fair Value Per Share | ||||||||||||
| Unvested, beginning of period | 2,132 | $ | 11.54 | |||||||||||
| Granted | 2,114 | 2.58 | ||||||||||||
| Vested | (383) | 8.04 | ||||||||||||
| Forfeited | (387) | 3.51 | ||||||||||||
| Unvested, end of period | 3,476 | $ | 7.35 | |||||||||||
The total fair value of RSUs vested during the year ended December 31, 2025 was $3.1 million.
Refer to Note 13 — Related Party Transactions for information related to the BHES JDA.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 9, 2026 | Showing above |
| 2024 | Mar 10, 2025 | |
| 2023 | Mar 11, 2024 | |
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.