OCEANFIRST FINANCIAL CORPOCFC
OCEANFIRST FINANCIAL CORP Stock Compensation Disclosure
Long-Term Incentive Plans
At December 31, 2025, the Company had an estimated $14.4 million of unrecognized compensation costs related to non-vested stock awards, stock options, and phantom stock units. This cost will be recognized over the remaining vesting period of 1.7 years.
The Company offers long-term incentive plans that provide for the granting of stock awards (both time-vested and performance-based) and stock options, as well as phantom stock units. The Company has established these plans to attract and retain qualified personnel in key positions, provide officers, employees, and non-employee directors with a proprietary interest in the Company as an incentive to contribute to the success of the Company, align the interests of management with those of other stockholders and reward employees for outstanding performance. Equity awards are discretionary and are targeted to a broad range of employees, including those in leadership roles, revenue generators, key contributors, and high-potential individuals who have contributed to the Company’s long-term strategic objectives.
Overview of Incentive Plans
The OceanFirst Financial Corp. 2020 Stock Incentive Plan, which also authorized the granting of stock options or awards of common stock, was approved by stockholders in 2020. This plan was subsequently amended in 2021 to increase the number of shares authorized for issuance through equity awards.
The following table presents the amount of the plan’s authorized shares and those that remain available for issuance as of December 31, 2025. The Plan allowed the Company to authorize shares subject to options or, in lieu of options, shares in the form of stock awards.
| Authorized Awards | Authorized but Not Issued | |||||||||||||||||||||||||||||||||||||
| Stock Options | or | Stock Awards | Stock Options | or | Stock Awards | |||||||||||||||||||||||||||||||||
| 2020 Plan | 6,950,000 | 2,780,000 | 2,165,868 | 866,347 | ||||||||||||||||||||||||||||||||||
Stock Awards
The Company grants time-based and performance-based restricted stock awards. Time-based awards vest ratably, and generally have a - to five-year vesting period. Performance-based stock awards, which are granted to certain senior executives and senior management employees, vest based on the estimated probability of achievement of defined tiered performance goals or include market-based conditions. Performance-based stock awards have tiered performance goals for each metric and are aligned with corresponding tiered vesting values. Performance-based stock awards have been set using financial data from the applicable strategic plan as approved by the Board, or based on financial metrics relative to the peer index.
The Company granted performance-based stock awards in 2025, 2024 and 2023. The 2025 and 2024 performance-based stock awards were generally issued with a or four year cliff vesting schedule, while some awards vest ratably over a four year period. The 2023 performance-based stock awards were issued with a three year cliff vesting schedule.
Certain 2025, 2024 and 2023 performance-based stock awards include a market-based condition. The fair value of these awards were estimated through the use of the Monte Carlo valuation model at the time of grant, applying the following assumptions:
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk-free interest rate | 3.99 | % | 4.47 | % | 4.56 | % | |||||||||||
| Expected performance period | 2.8 years | 2.8 years | 2.8 years | ||||||||||||||
| Expected volatility | 37.12 | % | 34.00 | % | 35.80 | % | |||||||||||
The risk-free interest rate is based on the U.S Treasury rate, with a term equal to the expected performance period. The expected performance period reflects the remaining term of the awards’ performance period. Expected volatility is based on actual historical results.
A summary of the granted but unvested stock award activity, which included both time- and performance-based stock awards, for the years ended December 31, 2025, 2024 and 2023 is as follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||||||||||||||||||||||
| Outstanding at beginning of year: | 1,071,535 | $ | 18.29 | 814,489 | $ | 21.73 | 835,340 | $ | 21.84 | |||||||||||||||||||||||||||||
| Granted | 345,644 | 17.32 | 554,081 | 15.35 | 322,425 | 22.14 | ||||||||||||||||||||||||||||||||
| Vested | (240,457) | 20.11 | (200,254) | 22.41 | (228,370) | 22.55 | ||||||||||||||||||||||||||||||||
| Forfeited | (118,159) | 20.37 | (96,781) | 21.93 | (114,906) | 22.07 | ||||||||||||||||||||||||||||||||
| Outstanding at end of year | 1,058,563 | $ | 17.32 | 1,071,535 | $ | 18.29 | 814,489 | $ | 21.73 | |||||||||||||||||||||||||||||
Stock Options
The Company’s stock options expire 10 years from the date of grant and generally vest at a rate of 20% per year. The exercise price of each option equals the closing market price of the Company’s stock on the grant date. The Company typically issues treasury shares or authorized but unissued shares to satisfy stock option exercises.
The Company has not granted stock options since 2020.
A summary of option activity for the years ended December 31, 2025, 2024 and 2023 is as follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| Number of Shares | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | |||||||||||||||||||||||||||||||||
| Outstanding at beginning of year | 1,629,602 | $ | 22.85 | 1,969,439 | $ | 22.42 | 2,210,684 | $ | 21.66 | |||||||||||||||||||||||||||||
| Exercised | (41,750) | 17.19 | (33,125) | 17.24 | (195,684) | 14.59 | ||||||||||||||||||||||||||||||||
| Forfeited | — | — | (15,358) | 20.44 | (15,358) | 20.44 | ||||||||||||||||||||||||||||||||
| Expired | (101,682) | 17.38 | (291,354) | 20.74 | (30,203) | 18.32 | ||||||||||||||||||||||||||||||||
| Outstanding at end of year | 1,486,170 | $ | 23.38 | 1,629,602 | $ | 22.85 | 1,969,439 | $ | 22.42 | |||||||||||||||||||||||||||||
| Options exercisable | 1,486,170 | $ | 23.38 | 1,528,067 | $ | 23.01 | 1,663,506 | $ | 22.58 | |||||||||||||||||||||||||||||
The aggregate intrinsic value for both stock options outstanding and stock options exercisable at December 31, 2025 was $93,000. The weighted average remaining contractual life of stock options outstanding and stock options exercisable at December 31, 2025 was 2.47 years.
Phantom Stock Units
In 2022, the Company established the OceanFirst Bank Phantom Equity Plan to issue phantom stock units to select senior management employees. The phantom stock units are liability-classified time-based awards, which generally vest ratably over a - to five-year period, and are settled in cash when they vest. The fair value is determined based on the Company’s stock price at the grant date and remeasured monthly.
Compensation Expense
The compensation expense for stock awards, stock options and phantom stock units were as follows (in thousands):
| For the Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Stock awards | $ | 4,818 | $ | 5,724 | $ | 5,154 | ||||||||||||||
| Stock options | 49 | 360 | 700 | |||||||||||||||||
| Phantom stock units | 2,518 | 1,707 | 1,092 | |||||||||||||||||
| Total | $ | 7,385 | $ | 7,791 | $ | 6,946 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 28, 2022 | |
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.