Piedmont Realty Trust, Inc.PDM
Piedmont Realty Trust, Inc. Stock Compensation Disclosure
Stock Based Compensation
Annually, the Compensation Committee of Piedmont's Board of Directors has granted deferred stock award units to certain employees at its discretion. Employee awards typically vest ratably over four years. In addition, Piedmont's independent directors receive an annual grant of deferred stock award units for services rendered and such awards vest over a one year service period.
Certain management employees' long-term equity incentive program is allocated between the deferred stock award units described above and a multi-year performance share program whereby actual awards are contingent upon Piedmont's total stockholder return ("TSR") performance relative to the TSR of a peer group of office REITs. The target incentives for these employees, as well as the peer group to be used for comparative purposes, are predetermined by the board of directors, based on advice given by a third-party compensation consultant. The number of shares earned, if any, are determined at the end of the multi-year performance period (or upon termination) and vest immediately. In the event that a participant's employment is terminated prior to the end of the multi-year period, in certain circumstances the participant may be entitled to a pro-rated award based on Piedmont's TSR relative performance as of the termination date. The grant date fair value of the multi-year performance share awards is estimated using the Monte Carlo valuation method and is recognized ratably over the performance period.
A roll forward of Piedmont's equity based award activity for the year ended December 31, 2025 is as follows:
| Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Unvested and Potential Stock Awards as of December 31, 2024 | 3,018,435 | $ | 9.20 | ||||||||
Deferred Stock Awards Granted | 560,810 | $ | 8.15 | ||||||||
| Performance Stock Awards Granted | 509,686 | $ | 10.05 | ||||||||
Change in Estimated Potential Share Awards based on TSR Performance | 597,635 | $ | 10.71 | ||||||||
Performance Stock Awards Vested | (269,079) | $ | 13.56 | ||||||||
Deferred Stock Awards Vested | (454,161) | $ | 9.04 | ||||||||
Deferred Stock Awards Forfeited | (9,472) | $ | 8.23 | ||||||||
Unvested and Potential Stock Awards as of December 31, 2025 | 3,953,854 | $ | 9.13 | ||||||||
The following table provides additional information regarding stock award activity during the years ended 2025, 2024, and 2023 (in thousands except for per share amounts):
| 2025 | 2024 | 2023 | |||||||||||||||
Weighted-Average Grant Date Fair Value per share of Deferred Stock Granted During the Period | $ | 8.15 | $ | 7.89 | $ | 9.60 | |||||||||||
Total Grant Date Fair Value of Deferred Stock Vested During the Period | $ | 4,104 | $ | 6,235 | $ | 5,448 | |||||||||||
A detail of Piedmont’s outstanding stock awards and programs as of December 31, 2025 is as follows:
| Date of grant | Type of Award | Net Shares Granted (1) | Grant Date Fair Value | Vesting Schedule | Unvested and Potential Shares as of December 31, 2025 | ||||||||||||||||||||||||||||||
| February 13, 2023 | Deferred Stock Award | 293,316 | $ | 10.55 | Of the shares granted, 25% vested on the date of grant, and 25% will vest on February 13, 2024, 2025, 2026, respectively. | 83,852 | |||||||||||||||||||||||||||||
| February 23, 2023 | Fiscal Year 2023-2025 Performance Share Program | — | $ | 12.37 | Shares awarded, if any, will vest immediately upon determination of award in 2026. | 471,324 | (2) | ||||||||||||||||||||||||||||
| February 23, 2023 | Deferred Stock Award | 315,943 | $ | 9.47 | Of the shares granted, 25% will vest on February 23, 2024, 2025, 2026, and 2027 respectively. | 161,468 | |||||||||||||||||||||||||||||
| February 20, 2024 | Fiscal Year 2024-2026 Performance Share Program | — | $ | 7.64 | Shares awarded, if any, will vest immediately upon determination of award in 2027. | 1,035,878 | (2) | ||||||||||||||||||||||||||||
| February 20, 2024 | Deferred Stock Award | 466,249 | $ | 6.55 | Of the shares granted, 25% will vest on February 23, 2024, 2025, 2026, and 2027 respectively. | 351,387 | |||||||||||||||||||||||||||||
| October 1, 2024 | Deferred Stock Award | 60,606 | $ | 9.90 | Of the shares granted, 25% will vest on October 1, 2025, 2026, 2027, and 2028 respectively. | 45,455 | |||||||||||||||||||||||||||||
| October 28, 2024 | Deferred Stock Award | 322,101 | $ | 10.09 | Of the shares granted, 100% will vest on October 28, 2029. | 322,101 | |||||||||||||||||||||||||||||
| February 3, 2025 | Deferred Stock Award | 429,334 | $ | 8.52 | Of the shares granted, 25% will vest on February 3, 2026, 2027, 2028, and 2029 respectively. | 423,100 | |||||||||||||||||||||||||||||
| February 3, 2025 | 2025-2027 Performance Share Program | — | $ | 10.05 | Shares awarded, if any, will vest immediately upon determination of award in 2028. | 937,553 | |||||||||||||||||||||||||||||
| May 15, 2025 | Deferred Stock Award-Board of Directors | 121,736 | $ | 6.90 | Of the shares granted, 100% will vest on the earlier of the 2026 Annual Meeting or May 15, 2026. | 121,736 | |||||||||||||||||||||||||||||
| Total | 3,953,854 | ||||||||||||||||||||||||||||||||||
(1)Amounts reflect the total original grant to employees and independent directors, net of shares surrendered upon vesting to satisfy required minimum tax withholding obligations through December 31, 2025.
(2)Estimated based on Piedmont's cumulative TSR for the respective performance period through December 31, 2025. Share estimates are subject to change in future periods based upon Piedmont's relative TSR performance compared to its peer group of office REITs.
During the years ended December 31, 2025, 2024, and 2023, Piedmont recognized approximately $9.7 million, $8.4 million and $8.1 million, respectively, of compensation expense related to the amortization of unvested and potential stock awards. During the year ended December 31, 2025, a total of 436,240 shares (net of shares surrendered upon vesting to satisfy required minimum tax withholding obligations) were issued to employees and independent directors. As of December 31, 2025, approximately $13.5 million of unrecognized compensation cost related to unvested and potential stock awards remained, which Piedmont will record in its consolidated statements of operations over a weighted-average vesting period of approximately one year.
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.