BLUE OWL CAPITAL INC.OWL
BLUE OWL CAPITAL INC. Stock Compensation Disclosure
10. EQUITY-BASED COMPENSATION
The Company grants equity-based compensation awards in the form of RSUs and Incentive Units to its management, employees, consultants and independent members of the Board under the Second Amended and Restated Blue Owl Capital Inc. 2021 Omnibus Equity Incentive Plan, approved by stockholders on June 13, 2024 and further amended on April 1, 2025 (the “2021 Omnibus Plan”). Equity-based compensation awards are generally subject to a to five-year requisite service period, although certain grants are immediately vested at grant.
As of December 31, 2025, the total number of Class A Shares and Blue Owl Operating Group Units, collectively, that may be issued under the 2021 Omnibus Plan was 175,834,537, of which 51,154,861 remain available for issuance. To the extent that an award expires or is canceled, forfeited, terminated, surrendered, exchanged or withheld to cover tax withholding obligations, the unissued awards will again be available for grant under the 2021 Omnibus Plan. The 2021 Omnibus Plan features an “evergreen” provision that provides for an automatic increase to the total number of Class A Shares subject to the 2021 Omnibus Plan on the first day of each fiscal year beginning in calendar year 2025, and ending in and including 2034, by a number of Class A Shares equal to the positive difference, if any, of (a) 5% of the aggregate number of Class A Shares and Class B Shares, in each case, outstanding on the last day of the immediately preceding fiscal year (assuming that all Blue Owl Operating Group Units have converted on a one-for-one basis into Class A Shares) minus (b) the aggregate number of shares that were available for the issuance of future awards under the 2021 Omnibus Plan on such last day of the immediately preceding fiscal year, unless the administrator should decide to increase the number of shares covered by the 2021 Omnibus Plan by a lesser amount on any such date.
The table below presents information regarding equity-based compensation expense.
| Year Ended December 31, | |||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Business Combination grants | $ | 62,541 | $ | 69,173 | $ | 69,448 | |||||||||||
| Acquisition related | 298,277 | 27,972 | 84,543 | ||||||||||||||
| Other | 312,706 | 215,464 | 158,573 | ||||||||||||||
| Equity-Based Compensation Expense | $ | 673,524 | $ | 312,609 | $ | 312,564 | |||||||||||
| Corresponding tax benefit | $ | 5,074 | $ | 2,578 | $ | 951 | |||||||||||
| Fair value of RSUs settled in Class A Shares | $ | 99,145 | $ | 49,174 | $ | 16,634 | |||||||||||
The table below presents activity related to the Company’s unvested equity-based compensation awards for the year ended December 31, 2025.
| Incentive Units | RSUs | Wellfleet Earnout Shares | |||||||||||||||||||||||||||||||||
| Number of Units | Weighted-Average Grant Date Fair Value Per Unit | Number of Units | Weighted-Average Grant Date Fair Value Per Unit | Number of Units | Weighted-Average Grant Date Fair Value Per Unit | ||||||||||||||||||||||||||||||
| December 31, 2024 | 21,700,853 | $ | 14.61 | 24,377,882 | $ | 15.48 | 287,425 | $ | 11.44 | ||||||||||||||||||||||||||
| Granted | 14,070,102 | 16.49 | 15,157,473 | 14.03 | — | — | |||||||||||||||||||||||||||||
| Vested | (17,557,897) | 15.76 | (7,808,637) | 13.21 | (287,425) | 11.44 | |||||||||||||||||||||||||||||
| Forfeited | (1,050,000) | 14.02 | (808,763) | 16.45 | — | — | |||||||||||||||||||||||||||||
| December 31, 2025 | 17,163,058 | $ | 15.01 | 30,917,955 | $ | 15.32 | — | $ | — | ||||||||||||||||||||||||||
Incentive Units
The grant date fair value of Incentive Units was determined using the Company’s Class A Share price on the grant date, adjusted for the lack of dividend participation during the vesting period, and the application of a discount ranging from 6.5% - 9.0% during 2025, 6.0% - 6.5% during 2024 and 6.0% - 8.5% during 2023 for lack of marketability on certain Incentive Units that are subject to a one-year post-vesting transfer restriction. The weighted-average grant date fair value of Incentive Units granted during the years ended December 31, 2025, 2024 and 2023 was $16.49, $19.47 and $11.27, respectively. The aggregate fair value of Incentive Units that vested during the years ended December 31, 2025, 2024 and 2023 was $325.5 million, $281.9 million and $100.1 million, respectively. The equity-based compensation expense related to Incentive Units during the years ended December 31, 2025, 2024 and 2023 was $274.4 million, $212.5 million and $175.1 million, respectively. As of December 31, 2025, unamortized expense related to Incentive Units was $148.6 million, with a weighted-average amortization period of 2.6 years.
RSUs
The grant date fair value of RSUs was determined using the Company’s Class A Share price on the grant date, adjusted for the lack of dividend participation during the vesting period, and as applicable a discount of 6.5% during 2025, 6.0% - 11.5% during 2024 and 6.0% - 8.5% during 2023 for lack of marketability on RSUs that are subject to a one-year post-vesting transfer restriction. The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2025, 2024 and 2023 was $14.03, $20.85 and $12.01, respectively. The aggregate fair value of RSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $40.2 million, $72.5 million and $44.5 million, respectively, which amounts are inclusive of RSUs that vested and have not yet been settled in Class A Shares. The equity-based compensation expense related to RSUs during the years ended December 31, 2025, 2024 and 2023 was $122.3 million, $79.0 million and $52.9 million, respectively. As of December 31, 2025, unamortized expense related to RSUs was $354.9 million, with a weighted-average amortization period of 2.7 years.
Services Agreement
Under the terms of the Services Agreement, ICONIQ will receive Incentive Units as compensation for the services performed. The Incentive Units will be issued in two tranches. The first tranche, consisting of 14,175,000 Incentive Units, is expected to be issued in 2026, contingent upon achieving certain future targets outlined in the Services Agreement. The grant date fair value of these Incentive Units was $319.5 million, or $22.54 per unit, determined based on the Company’s Class A Share price, adjusted for the lack of dividend participation during the service period prior to issuance. The second tranche of Incentive Units is expected to be issued in 2028, contingent upon achieving certain future targets outlined in the Services Agreement. The estimated value of these additional Incentive Units, which assumes total commitments of $10.0 billion for the next vintage drawdown digital infrastructure product, was approximately $464.2 million as of December 31, 2025.
Incentive Units issued under this agreement will be fully vested upon issuance. The Company is recognizing the total estimated expense related to the Services Agreement over the expected substantive service period, in a manner consistent with the recognition of such expenses if the payments were made in cash. Such expenses are included within the acquisition related line
item in the table above and within general, administrative and other expenses in the Company’s consolidated statements of operations. As of December 31, 2025, unamortized expense related to the Services Agreement was $550.1 million, with a remaining amortization period of 2.5 years.
Atalaya Earnouts
As discussed in Note 3, approximately 80% of the Atalaya Earnouts will be paid in Common Units and corresponding Class C Shares to sellers subject to ongoing employment arrangements with the Company. This portion of the Atalaya Earnouts has been classified as equity-based compensation. Upon an Atalaya Triggering Event, any issued Common Units and Class C Shares are fully vested (i.e., no substantive vesting period following the grant date). Accordingly, the Company has begun accruing compensation expense over the service period preceding the grant date, based on the fair value of the award at the end of the reporting period, and will remeasure until the grant date. As of December 31, 2025, the estimated fair value of these awards was $142.2 million, including an 11.5% discount for lack of marketability due to a two-year post-vesting transfer restriction. As of December 31, 2025, unamortized expense related to these awards was $83.7 million, with a weighted-average amortization period of 2.3 years.
Oak Street Earnout Units
On December 29, 2021, the Company completed its acquisition of Oak Street Real Estate Capital, LLC, now, Blue Owl Real Estate Capital LLC (“Oak Street”), a diversified real estate investment firm, and its advisory business (the “Oak Street Acquisition”).
In connection with the Oak Street Acquisition, the Company agreed to make additional payments of cash and Common Units and corresponding Class C Shares (collectively, the “Oak Street Earnout Units”). The grant date fair value of the Oak Street Earnout Units was determined using a Monte Carlo simulation valuation model, with the following weighted average assumptions: annualized revenue volatility of 38%, revenue discount rate of 15%, discount for lack of marketability of 13% and expected holding period of approximately 2.0 years. In January 2023, the Oak Street Earnout Units triggering event occurred with respect to the first tranche of the Oak Street Earnout Units (the “First Oak Street Earnouts”). In January 2024, the Oak Street Earnout Units triggering event occurred with respect to the second tranche of the Oak Street Earnout Units (the “Second Oak Street Earnouts”).
Wellfleet Earnout Shares
On April 1, 2022, the Company completed its acquisition of Wellfleet Credit Partners, LLC, now, Blue Owl Liquid Credit Advisors LLC (“Wellfleet”), a manager of collateralized loan obligations (the “Wellfleet Acquisition”).
In connection with the Wellfleet Acquisition, the Company agreed to make additional payments of cash and Class A Shares (the “Wellfleet Earnout Shares”). The grant date fair value of the Wellfleet Earnout Shares treated as compensation was determined using the Company’s Class A Share price on the grant date, adjusted for the lack of dividend participation during the vesting period.
In April 2023, the Company modified its purchase agreement with the Wellfleet sellers, such that Wellfleet Earnout Shares will be delivered in cash in lieu of Wellfleet Earnout Shares. As a result of the modification, the second and third tranches of the Wellfleet Earnout Shares were changed from equity-classified to liability-classified on the modification date with the liability recorded at fair value at each reporting period, with the related expense subject to a floor equal to the original grant date fair value. The first tranche of the Wellfleet earnout vested and was cash settled in April 2023 and such settlement was treated as a cash settlement of an equity-classified arrangement. In April 2024, the Wellfleet triggering event occurred with respect to the second tranche of the Wellfleet Earnout Shares. In April 2025, the Wellfleet triggering event occurred with respect to the third tranche of the Wellfleet Earnout Shares
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.