Orion Properties Inc.ONL
Orion Properties Inc. Stock Compensation Disclosure
Note 13 – Equity-Based Compensation
The Company has an equity-based incentive award plan (the “Equity Plan”) for officers, other employees, non-employee directors and consultants who provide services to the Company. Awards under the Equity Plan are accounted for under U.S. GAAP as share-based payments. The expense for such awards is recognized over the requisite service period, which is generally the vesting period. Under the Equity Plan, the Company may grant various types of awards, including restricted stock units that will vest if the recipient maintains employment with the Company over the requisite service period (the “Time-Based RSUs”) and restricted stock units that may vest in a number ranging from 0% to 100% of the total number of units granted, based on the Company’s total shareholder return measured on an absolute basis (“TSR-Based RSUs”) and based on certain operational performance metrics (“Metrics-Based RSUs” and collectively with the TSR-Based RSUs, “Performance-Based RSUs”), in each case for officers and other employees during a three-year performance period. The Company also granted Time-Based RSUs to its non-employee directors which are scheduled to vest on the earlier of the one-year anniversary of the grant date and the next annual meeting, subject to the recipient’s continued service with the Company.
Failure to satisfy the performance conditions for the Metrics-Based RSUs will result in the forfeiture of the units and, in the case of awards where the performance conditions were previously determined to be likely of achieving, a reversal of any previously recognized equity-based compensation expense. Failure to satisfy the market conditions for the TSR-Based RSUs will result in the forfeiture of the units but does not result in a reversal of previously recognized equity-based compensation expense, provided that the requisite service has been rendered. Forfeiture of Time-Based RSUs or Performance-Based RSUs due to the failure to meet the service requirements results in the reversal of previously recognized equity-based compensation expense. The Company adjusts for forfeitures of Time-Based RSUs and Performance-Based RSUs as they occur.
During the years ended December 31, 2025, 2024 and 2023, the Company granted Time-Based RSUs and/or Performance-Based RSUs to officers, other employees and non-employee directors of the Company. The fair value of the Time-Based RSUs is determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis. The fair value of the TSR-Based RSUs is determined using a Monte Carlo simulation which takes into account multiple input variables that determine the probability of satisfying the required total shareholder return, and such fair value is expensed over the performance period. The fair value of the Metrics-Based RSUs is determined using the closing stock price on the grant date and is expensed over the requisite service period to the extent that the likelihood of achieving the performance metrics is probable. As of December 31, 2025, the Company determined that the likelihood of achieving some of the performance metrics was probable and, accordingly, the Company recognized compensation expense for such Metrics-Based RSUs and determined that the likelihood of achieving the remaining performance metrics was improbable and the Company recognized no compensation expense for the remaining Metrics-Based RSUs.
Time-Based RSUs and Performance-Based RSUs do not provide for any rights of a common stockholder prior to the vesting of such restricted stock units. Equity-based compensation expense related to Time-Based RSUs and Performance-Based RSUs for the years ended December 31, 2025, 2024 and 2023 was $3.9 million, $3.7 million and $2.5 million, respectively. As of December 31, 2025, total unrecognized compensation expense related to Time-Based RSUs and Performance-Based RSUs was approximately $3.3 million with an aggregate weighted average remaining term of 1.6 years.
The following table details the activity of the Time-Based RSUs for the periods indicated below:
| Time-Based RSUs | Weighted Average Grant Date Fair Value per Share | |||||||||||||
| Unvested units, January 1, 2023 | 156,947 | $ | 17.12 | |||||||||||
| Granted | 363,745 | $ | 7.10 | |||||||||||
| Vested | (75,556) | $ | 16.17 | |||||||||||
Unvested units, December 31, 2023 | 445,136 | $ | 9.09 | |||||||||||
| Granted | 771,870 | $ | 3.37 | |||||||||||
| Vested | (217,028) | $ | 8.94 | |||||||||||
| Forfeited | (23,015) | $ | 4.89 | |||||||||||
Unvested units, December 31, 2024 | 976,963 | $ | 4.71 | |||||||||||
| Granted | 1,172,019 | $ | 2.06 | |||||||||||
| Vested | (467,437) | $ | 5.36 | |||||||||||
| Forfeited | (54,023) | $ | 4.07 | |||||||||||
Unvested units, December 31, 2025 | 1,627,522 | $ | 2.63 | |||||||||||
The following table details the activity of the Performance-Based RSUs for the periods indicated below:
| Performance-Based RSUs | Weighted Average Grant Date Fair Value per Share | |||||||||||||
| Unvested units, January 1, 2023 | 212,154 | $ | 13.65 | |||||||||||
| Granted | 509,273 | $ | 5.83 | |||||||||||
Unvested units, December 31, 2023 | 721,427 | $ | 8.13 | |||||||||||
| Granted | 1,613,592 | $ | 2.41 | |||||||||||
| Vested | (31,080) | $ | 17.77 | |||||||||||
| Forfeited | (201,625) | $ | 16.33 | |||||||||||
Unvested units, December 31, 2024 | 2,102,314 | $ | 2.81 | |||||||||||
| Granted | 1,693,856 | $ | 1.30 | |||||||||||
| Vested | (104,125) | $ | 7.16 | |||||||||||
| Forfeited | (720,740) | $ | 5.16 | |||||||||||
Unvested units, December 31, 2025 | 2,971,305 | $ | 1.23 | |||||||||||
The Company was also required under U.S. GAAP to recognize equity-based compensation expense for awards to its employees who received grants of Realty Income time-based restricted stock units and stock options in connection with the Separation and the Distribution. As of December 31, 2025, there was no remaining unrecognized compensation expense related to Realty Income time-based restricted stock units and stock options and no equity-based compensation expense related to these awards during the during the year ended December 31, 2025. Equity-based compensation expense related to such Realty Income equity-based compensation awards was less than $0.1 million and $0.2 million for the years ended December 31, 2024 and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 5, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 8, 2023 | |
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.