Oscar Health, Inc.OSCR
Oscar Health, Inc. Stock Compensation Disclosure
STOCK-BASED COMPENSATION
2012 Stock Plan
Prior to its initial public offering ("IPO"), the Company maintained the 2012 Stock Plan (the “2012 Plan”), which provided for the grant of incentive stock options ("ISOs"), non-qualified stock options ("NSOs"), common stock of the Company, stock payments and restricted stock units. The 2012 Plan was initially adopted on December 6, 2012, and most recently amended and restated in March 2021. The 2012 Plan was terminated upon the effectiveness of the 2021 Incentive Award Plan in March 2021, and no further awards will be made under the 2012 Plan.
2021 Incentive Award Plan
In March 2021, the Company’s board of directors (“Board”) adopted the 2021 Incentive Award Plan (the “2021 Plan”), which provides for the grant of NSOs, ISOs, stock appreciation rights (“SARs”), restricted stock, restricted stock units (including time-based restricted stock units (“RSUs”), and performance-based restricted stock units (“PSUs”)), dividend equivalents and other stock or cash awards to employees, consultants and non-employee directors. Under the 2021 Plan, as of December 31, 2025, there are 56.1 million shares authorized to be issued, with 8.1 million shares still available for future issuance as of December 31, 2025. The shares available for future issuance as of December 31, 2025 may be issued as either Class A common stock or Class B common stock.
2022 Inducement Incentive Award Plan
In April 2022, the Company’s Board adopted the 2022 Employment Inducement Incentive Award Plan (the “Inducement Plan”), which provides for the grant of NSOs, SARs, restricted stock, RSUs, PSUs, dividend equivalents and other stock or cash awards to prospective employees. The Inducement Plan was amended on March 28, 2023 to add 13.3 million shares to the plan. Under the Inducement Plan, as of December 31, 2025, there are 18.3 million shares authorized to be issued, with 5.8 million shares still available for future issuance. The shares available for future issuance as of December 31, 2025 may be issued as Class A common stock.
Stock-Based Compensation Expense
Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. Forfeitures are accounted for as they occur. The Company records stock-based compensation expense within Selling, general, and administrative expenses on the Consolidated Statements of Operations. The Company's stock-based compensation expense for the years ended December 31, 2025, 2024, and 2023 was $100.4 million, $119.0 million, and $166.8 million, respectively. The Company capitalized $12.8 million, $9.1 million, and $7.1 million of stock-based compensation expense related to internally developed software for the years ended December 31, 2025, 2024, and 2023 respectively.
Stock Options
Stock options granted under the 2012 Plan and 2021 Plan include ISOs and NSOs, generally have a maximum contractual term of 10 years, and typically vest over a four-year period.
The following table summarizes the stock option award activity for the year ended December 31, 2025:
| Options | |||||||||||||||||||||||
| Number of Options (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Options Outstanding - December 31, 2024 | 17,944 | $ | 10.69 | 4.87 | $ | 63,110 | |||||||||||||||||
Options granted | 333 | $ | 15.27 | ||||||||||||||||||||
Options exercised | 5,548 | $ | 9.92 | $ | 44,778 | ||||||||||||||||||
Options canceled | 301 | $ | 16.83 | ||||||||||||||||||||
Options Outstanding - December 31, 2025 | 12,428 | $ | 11.01 | 4.30 | $ | 49,322 | |||||||||||||||||
Options Exercisable - December 31, 2025 | 11,773 | $ | 11.06 | 4.08 | $ | 46,300 | |||||||||||||||||
The weighted average grant date fair value of options granted during the years ended December 31, 2025, 2024, and 2023 was $10.22, $10.65, and $3.74, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2025, 2024, and 2023 was $44.8 million, $71.7 million, and $8.5 million, respectively.
Determination of Fair Value of Stock Options
The fair value of stock options is estimated on the grant date using the Black-Scholes option-pricing model, which takes into account significant assumptions such as the expected term of the option, stock price volatility, and a risk-free rate of return. The Company has used the simplified method in calculating the expected term of all option grants based on the vesting period and contractual term.
The table below summarizes the assumptions used during the years ended December 31, 2025, 2024, and 2023.
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Term in years | 5.95 - 6.12 | 5 | 6.02 - 6.14 | ||||||||||||||
Risk free rate of return | 4.3% | 3.8% | 3.5% - 4.7% | ||||||||||||||
Expected volatility | 71.6% - 71.7% | 65.0% | 58.2% - 59.4% | ||||||||||||||
| Dividend yield | — | % | — | % | — | % | |||||||||||
Compensation Expense – Stock Options
For the years ended December 31, 2025, 2024, and 2023, the Company recorded compensation expense of $4.5 million, $8.7 million, and $12.0 million respectively. As of December 31, 2025, the amount of unrecognized compensation expense for stock options is $3.7 million, which is expected to be recognized over a weighted-average period of 2.7 years.
Restricted Stock Units
RSUs represent the right to receive shares of the Company’s Class A or Class B common stock at a specified date in the future and typically have a vesting period of to four years.
The following table summarizes RSU award activity for the year ended December 31, 2025:
| RSUs | |||||||||||
| Number of Shares (in thousands) | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding RSUs at December 31, 2024 | 13,132 | $ | 8.83 | ||||||||
| RSUs granted | 5,455 | $ | 16.07 | ||||||||
| RSUs vested | 8,733 | $ | 9.25 | ||||||||
| RSUs canceled | 2,809 | $ | 11.46 | ||||||||
Outstanding RSUs at December 31, 2025 | 7,045 | $ | 12.88 | ||||||||
Determination of Fair Value of RSUs
The fair value of RSUs granted is determined on the grant date based on the fair value of the Company's common stock. The total fair value of RSUs vested during the years ended December 31, 2025 and 2024 was $80.8 million and $93.6 million, respectively.
Compensation Expense – RSUs
For the years ended December 31, 2025, 2024, and 2023, the Company recorded compensation expense of $80.7 million, $95.0 million, and $90.0 million, respectively. As of December 31, 2025, the amount of unrecognized compensation expense for RSUs is $76.1 million, which is expected to be recognized over a weighted-average period of 1.9 years.
Performance-based Restricted Stock Units
PSUs represent the right to receive shares of the Company’s Class A or Class B common stock at a specified date in the future based on pre-determined performance and service conditions. The PSUs granted include awards with a market condition, which are eligible to vest based on the achievement of predetermined stock price goals, and awards with performance conditions, which are eligible to vest based on the Company’s predetermined financial targets. These PSUs cliff vest at the end of a three-year performance period. For the PSUs with performance conditions, the ultimate payout of the PSUs is subject to achievement of predetermined targets (ranging from 0% to 200% of the target amount), as further adjusted by a relative total shareholder return (“TSR”) performance modifier, which adjusts the payout level upwards or downwards based on the Company’s shareholder return over the same three-year performance period relative to companies in a peer group established by the Company at the grant date.
The following table summarizes PSU award activity for the year ended December 31, 2025:
| PSUs | |||||||||||
| Number of Shares (in thousands) | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding PSUs at December 31, 2024 | 8,212 | $ | 5.21 | ||||||||
| PSUs granted | 890 | $ | 19.39 | ||||||||
| PSUs canceled | 338 | $ | 23.26 | ||||||||
Outstanding PSUs at December 31, 2025 | 8,764 | $ | 5.96 | ||||||||
Determination of Fair Value of PSUs
The fair value of PSUs with performance conditions is determined on the grant date based on the fair value of the Company's common stock.
The fair value of PSUs with market conditions, as well as PSUs with financial targets that include relative TSR modifiers, is estimated on the grant date using a Monte Carlo simulation model, which utilizes multiple variables that determine the probability of satisfying the market conditions or level of relative TSR modification as stipulated in the award. The table below summarizes the assumptions used during the years ended December 31, 2025, 2024, and 2023.
| December 31, 2025 | December 31, 2024 | December 31, 2023 | |||||||||||||||
| Grant date stock price | $ | 16.25 | $ | 18.09 | $ | 6.74 | |||||||||||
| Term in years | 3.0 | 3.0 | 3.0 | ||||||||||||||
| Expected volatility | 71.1 | % | 66.2 | % | 59.9 | % | |||||||||||
| Risk-free rate | 3.9 | % | 4.6 | % | 3.6 | % | |||||||||||
| Dividend yield | — | % | — | % | — | % | |||||||||||
Cancellation of the Founders Awards – PSUs
On March 28, 2023, the Company’s Co-Founders, Mario Schlosser (the Company’s President of Technology, and Chief Technology Officer, and former Chief Executive Officer) and Joshua Kushner (the Company’s Vice Chairman), recommended to the Company’s Board that they should cancel and terminate the applicable awards that were granted to them in connection with the Company’s IPO (the “Founders Awards”). Mr. Schlosser and Mr. Kushner each entered into an agreement to cancel and terminate his Founders Award, which consisted of performance-based restricted stock units covering 4,229,853 shares (for Mr. Schlosser) and 2,114,926 shares (for Mr. Kushner) of the Company’s Class A common stock. As a result of this cancellation, the Company recognized approximately $46.3 million of accelerated stock-based compensation expense that would have otherwise been recognized over the remaining vesting period of the awards.
Compensation Expense – PSUs
For the years ended December 31, 2025, 2024, and 2023 the Company recorded compensation expense of $15.2 million, $15.3 million, and $64.9 million respectively. As of December 31, 2025, the amount of unrecognized compensation expense for PSUs is $18.1 million, which is expected to be recognized over a weighted-average period of 1.7 years.
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.