ONEOK INC /NEW/OKE
ONEOK INC /NEW/ Stock Compensation Disclosure
SHARE-BASED PAYMENTS
Our Equity Incentive Plan (EIP) provides for the granting of stock-based compensation to eligible employees and non-employee directors, including restricted stock units, performance units, director stock awards and other awards. In May 2025, our shareholders approved the 2025 Equity Incentive Plan (2025 EIP), which replaced the EIP approved by our shareholders in 2018. All new equity awards are issued under the 2025 EIP. There were 19.1 million shares of common stock authorized for issuance under the 2025 EIP and at December 31, 2025, we had 18.6 million shares available for issuance. This calculation of available shares reflects shares issued and estimated shares expected to be issued upon vesting of outstanding awards granted under the 2025 EIP, excluding estimated forfeitures expected to be returned to the plan.
EnLink Acquisitions - As discussed in Note B, we completed the EnLink Controlling Interest Acquisition on October 15, 2024. EnLink had previously issued restricted incentive units and performance units that vest at the end of a designated period, typically three years. The fair value of these awards attributable to pre-combination service was allocated to consideration transferred and was included as part of the purchase price. The portion attributable to post-combination service is being recognized as compensation expense on a straight-line basis over the remaining vesting period of the awards. Upon completion of the EnLink Acquisition on January 31, 2025, each outstanding unit-based award was converted into a restricted stock unit with respect to shares of our common stock and measured at their acquisition date fair value as if they were vested and issued on the acquisition date. Converted restricted stock unit awards accrue dividend equivalents that are paid out in cash quarterly.
Magellan Acquisition - As discussed in Note B, we completed the Magellan Acquisition on September 25, 2023. Prior to the acquisition, Magellan had previously issued unit-based awards consisting of time-vested phantom units and performance phantom units, that vested at the end of a designated period, typically three years. Pursuant to the terms of the Magellan Merger Agreement, each outstanding unit-based award was converted into a restricted stock unit with respect to shares of our common stock and measured at their acquisition date fair value as if they were vested and issued on the acquisition date. The fair value attributable to pre-combination service was allocated to consideration transferred and was included as part of the purchase price. The portion attributable to post-combination service is being recognized as compensation expense on a straight-line basis over the remaining vesting period of the awards. Converted restricted stock unit awards accrue dividend equivalents that are paid out in cash at vesting.
Restricted Stock Units - We have granted restricted stock units to key employees that vest at the end of a designated period, typically three years, and entitle the grantee to receive shares of our common stock. Restricted stock unit awards are measured at fair value as if they were vested and issued on the grant date and adjusted for estimated forfeitures. Restricted stock unit awards accrue dividend equivalents in the form of additional restricted stock units prior to vesting. Compensation expense is recognized on a straight-line basis over the vesting period of the award.
Performance Unit Awards - We have granted performance unit awards to key employees that vest at the end of a three-year period. Upon vesting, a holder of outstanding performance units is entitled to receive a number of shares of our common stock equal to a percentage (0% to 200%) of the performance units granted, based on our total shareholder return over the performance period, compared with the total shareholder return of a peer group of other energy companies over the same period. Performance unit awards are measured at fair value on the grant date based on a Monte Carlo model and adjusted for estimated forfeitures. Performance unit awards accrue dividend equivalents in the form of additional performance units prior to vesting. Compensation expense is recognized on a straight-line basis over the vesting period of the award.
Stock Compensation for Non-Employee Directors - The 2025 EIP provides for the granting of director stock awards and other awards to non-employee directors, up to $1.0 million per year for each such director when combined with any cash fees.
General - For all awards outstanding, we used a 3% forfeiture rate based on historical forfeitures under our share-based payment plans. We currently use treasury stock to satisfy our share-based payment obligations.
Compensation expense, exclusive of those recognized within transaction costs, for our share-based payment plans was $92 million, $102 million and $63 million during 2025, 2024 and 2023, respectively, before related tax benefits of $31 million, $36 million and $14 million, respectively.
Restricted Stock Unit Activity - As of December 31, 2025, we had $87 million of total unrecognized compensation cost related to our nonvested restricted stock unit awards, which is expected to be recognized over a weighted-average period of 1.9 years. The following tables set forth activity and various statistics for our restricted stock unit awards:
| Number of Units | Weighted Average Price | |||||||||||||
| Nonvested December 31, 2024 | 1,360,122 | $ | 68.71 | |||||||||||
| Granted (a) | 1,605,626 | $ | 88.80 | |||||||||||
| Released to participants (b) | (938,789) | $ | 75.33 | |||||||||||
| Forfeited (b) | (77,622) | $ | 85.70 | |||||||||||
| Nonvested December 31, 2025 | 1,949,337 | $ | 81.40 | |||||||||||
(a) - Included 480,280 unvested restricted stock unit awards converted in conjunction with the EnLink Acquisition.
(b) - Included 348,019 restricted stock unit awards released to participants and forfeited in conjunction with the EnLink Acquisition.
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Weighted-average grant date fair value (per share) | $ | 88.80 | $ | 75.42 | $ | 66.50 | ||||||||||||||
| Grant date fair value of units granted (millions of dollars) | $ | 143 | $ | 39 | $ | 111 | ||||||||||||||
Performance Unit Activity - As of December 31, 2025, we had $39 million of total unrecognized compensation cost related to the nonvested performance unit awards, which is expected to be recognized over a weighted-average period of 1.7 years. The following tables set forth activity and various statistics related to the performance unit awards and the assumptions used in the valuations at the respective grant dates:
| Number of Units | Weighted Average Price | |||||||||||||
| Nonvested December 31, 2024 | 1,099,699 | $ | 84.25 | |||||||||||
| Granted | 449,020 | $ | 80.55 | |||||||||||
| Released to participants | (332,706) | $ | 79.21 | |||||||||||
| Forfeited | (50,905) | $ | 84.55 | |||||||||||
| Nonvested December 31, 2025 | 1,165,108 | $ | 84.25 | |||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Volatility (a) | 27.17% | 29.00% | 63.30% | |||||||||||||||||
| Dividend yield | 4.15% | 5.40% | 5.75% | |||||||||||||||||
| Risk-free interest rate | 4.30% | 4.46% | 4.43% | |||||||||||||||||
(a) - Volatility was based on historical volatility over three years using daily stock price observations.
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Weighted-average grant date fair value (per share) | $ | 80.55 | $ | 85.69 | $ | 87.46 | ||||||||||||||
| Grant date fair value of units granted (millions of dollars) | $ | 36 | $ | 39 | $ | 32 | ||||||||||||||
Employee Stock Purchase Plan - We have reserved a total of 13.1 million shares of common stock for issuance under our Employee Stock Purchase Plan (the ESPP). Subject to certain exclusions, all employees are eligible to participate in the ESPP. Employees can choose to have up to 10% of their base pay withheld from each paycheck during the offering period to purchase our common stock, subject to the terms and limitations of the plan. The purchase price of the stock is 85% of the lower of its grant date or exercise date market price. Approximately 58%, 59% and 69% of employees participated in the plan in 2025, 2024 and 2023, respectively. Under the plan, we sold 356,745 shares at a weighted average of $65.34 per share in 2025, 275,874 shares at a weighted average of $64.38 per share in 2024 and 236,108 shares at a weighted average of $52.70 per share in 2023.
Employee Stock Award Program - Under our Employee Stock Award Program (the ESAP), we issued, for no monetary consideration, to all eligible employees one share of our common stock when the per-share closing price of our common stock on the NYSE is at or above each one-dollar increment above its previous high closing price. We authorized a total of 900,000 shares of common stock under the ESAP. The ESAP terminated as of November 7, 2024, and no additional grants were made under the program after such date. In May 2025, our shareholders approved the 2025 Employee Stock Award Program (the 2025 ESAP), which issues shares of our common stock in the same manner as the ESAP and permits our Board of Directors to issue additional shares of our common stock in its discretion. A total of 700,000 shares of common stock were authorized for issuance under the 2025 ESAP. Shares issued to employees under these programs during 2025 and 2024 totaled 66,916 and 127,825, respectively. Employees have received awards through the $117 milestone. No shares were issued to employees under these programs in 2023.
Deferred Compensation Plan for Non-Employee Directors - Our Deferred Compensation Plan for Non-Employee Directors provides our non-employee directors the option to defer all or a portion of their compensation for their service on our Board of Directors. Under the plan, directors may elect either a cash deferral option or a phantom stock option. Under the cash deferral option, directors may elect to defer the receipt of all or a portion of their annual retainer fees (other than their stock retainer fees), which will be credited with interest during the deferral period. Under the phantom stock option, directors may defer all or a portion of their annual retainer fees and receive such fees on a deferred basis in the form of shares of common stock under our EIP or 2025 EIP, which earn the equivalent of dividends declared on our common stock. Shares are distributed to non-employee directors at the fair market value of our common stock at the date of distribution.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 23, 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.