PETMED EXPRESS INCPETS
PETMED EXPRESS INC Stock Compensation Disclosure
(11) Share-Based Compensation
The Company's incentive equity grants have been made under the following plans:
•In July 2015, the Company’s 2015 Outside Director Equity Compensation Restricted Stock Plan (“2015 Director Plan”) became effective upon the approval of the plan by the Company’s shareholders. The 2015 Director Plan authorized 400,000 shares of the Company's common stock available for issuance under the plan and provides for an automatic increase every year in the amount of shares available for issuance under the plan of 10% of the shares authorized under the plan.
•In July 2016, the Company’s 2016 Employee Equity Compensation Restricted Stock Plan (“2016 Employee Plan”) became effective upon the approval of the plan by the Company’s shareholders. The 2016 Employee Plan authorized 1,000,000 shares of the Company's Common stock available for issuance under the plan. In July 2022, the Company’s 2022 Employee Equity Compensation Restricted Stock Plan (“2022 Employee Plan”) became effective upon the approval of the plan by the Company’s shareholders.
•The 2022 Employee Plan replaced the 2016 Employee Plan, and as of April 2023 no further awards were granted, or will be granted, under the 2016 Employee Plan. The 2022 Employee Plan authorized 1,000,000 shares of the Company's common stock available for issuance.
•On August 8, 2024, the Company adopted the PetMed Express, Inc. 2024 Omnibus Incentive Plan (the "2024 Omnibus Plan") pursuant to which the Company reserved 850,000 shares of common stock, par value $.001 per share, for the issuance of equity awards granted under such plan.
•On September 27, 2024, the Company adopted the PetMed Express, Inc. 2024 Inducement Incentive Plan (the "2024 Inducement Plan") pursuant to which the Company reserved 350,000 shares of common stock, par value $.001 per share, of the Company’s common stock (subject to the adjustment provisions of the Inducement Plan) for the issuance of equity awards granted under the Inducement Plan.
The Company records compensation expense associated with restricted stock in accordance with ASC Topic 718, Share Based Payments (ASU 2016-09). The value of the restricted stock is determined based on the market value of the stock at the issuance date. The restriction period or forfeiture period is determined by the Company’s Compensation and Human Capital Committee and is to be no less than 1 year and no more than ten years unless otherwise specified by the Compensation and Human Capital Committee. The following table presents the number of common shares issued under each of the Company's plans:
Plan Name | Common Shares Issued | |||||||
2016 Employee Plan | 422,438 | |||||||
2015 Director Plan | 244,807 | |||||||
2022 Employee Plan | 417,446 | |||||||
2024 Omnibus Plan | 498,313 | |||||||
2024 Inducement Plan | 148,735 | |||||||
As of March 31, 2026, all shares in the 2022 Employee Plan, 2016 Employee Plan and 2015 Director Plan were issued subject to a restriction or forfeiture or vesting period that lapses ratably on the first, second, and third anniversaries of the date of grant, and the fair value of which is being amortized over a to three-year restriction period, with the exception of performance restricted shares which were issued to the Company's former Chief Executive Officer and the former Company's Chief Financial Officer and Company's current Chief Executive Officer.
For the fiscal years ended March 31, 2026, 2025, and 2024, the Company recognized compensation expense (reversal) related to the 2016 and 2022 Employee Plan, the 2015 Director Plan, 2024 Omnibus Plan and 2024 Inducement Plan of $1.4 million, $(6.6) million, and $6.9 million, respectively. All stock-based compensation expense is recognized as a payroll-related expense and it is included within the general and administrative expenses line item within the Company’s Consolidated Statements of Operations, and the offset is included in the additional paid-in capital line item of the Company’s Consolidated Balance Sheets. See Note 9, "Income Taxes" for tax impact of the Company's stock compensation expense.
Restricted Stock Awards
For the year ended March 31, 2026, restricted stock award ("RSA") activity under the Plans was as follows:
2015 Director Plan Number of Shares | 2016 Employee Plan Number of Shares | 2022 Employee Plan Number of Shares | 2024 Omnibus Plan Number of Shares | 2024 Inducement Plan Number of Shares | All Plans Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||||||||||||||||||||||||
| Non-vested restricted stock outstanding at March 31, 2025 | 9,207 | 8,686 | — | — | — | 17,893 | $ | 21.39 | |||||||||||||||||||||||||||||||||
Granted and issued | — | — | — | 356,950 | 27,000 | 383,950 | $ | 2.58 | |||||||||||||||||||||||||||||||||
Vested | (6,166) | (7,739) | — | (17,789) | — | (31,694) | $ | 10.97 | |||||||||||||||||||||||||||||||||
Forfeited | (3,041) | (947) | — | (27,057) | — | (31,045) | $ | 4.87 | |||||||||||||||||||||||||||||||||
| Non-vested restricted stock outstanding at March 31, 2026 | — | — | — | 312,104 | 27,000 | 339,104 | $ | 2.57 | |||||||||||||||||||||||||||||||||
•At March 31, 2026 and 2025, there were 339,104 and 17,893, RSAs subject to restriction and forfeiture outstanding, respectively.
•During the fiscal years ended March 31, 2026 and 2025, the Company issued, net of forfeitures, 352,905 and (561,209) restricted shares, respectively.
•The weighted-average grant date fair value of restricted shares issued was $2.58 for fiscal year 2026. There were no restricted shares issued for fiscal year 2025. For the fiscal years ended March 31, 2026, 2025, and 2024, the Company recognized compensation expense (reversal) related to RSAs of $0.3 million, $(8.1) million, and $6.6 million, respectively.
•The total fair market value of restricted shares released from restrictions was $0.1 million and $0.5 million for fiscal years 2026 and 2025, respectively.
•At March 31, 2026 and 2025, there were $0.6 million and $0.1 million of unrecognized compensation costs related to the restricted stock subject to restriction and forfeiture awards, respectively, which is expected to be recognized over the remaining weighted average restriction and forfeiture period of 1.3 years and 4.6 months for fiscal 2026 and 2025, respectively.
Restricted Stock Units
The Company first granted restricted stock units ("RSUs") in the year ended March 31, 2024. The fair value assigned to RSUs is the market price of the Company’s stock on the grant date. The vesting period for employees and members of the Board of Directors ranges from to three years.
For the year ended March 31, 2026, RSU activity under the Plans was as follows:
| 2015 Director Plan Number of Shares | 2022 Employee Plan Number of Shares | 2024 Omnibus Plan Number of Shares | 2024 Inducement Plan Number of Shares | Total RSUs | Weighted-Average Grant Date Fair Value Per RSU | |||||||||||||||||||||||||||||||||
| Non-vested RSUs outstanding at March 31, 2025 | 22,316 | 568,416 | 321,022 | 290,000 | 1,201,754 | $ | 4.49 | |||||||||||||||||||||||||||||||
| Granted | – | – | 9,877 | – | 9,877 | $ | 2.97 | |||||||||||||||||||||||||||||||
| Vested and issued | (10,097) | (250,997) | (105,313) | (95,068) | (461,475) | $ | 4.42 | |||||||||||||||||||||||||||||||
| Forfeited | (9,719) | (265,382) | (133,269) | (168,265) | (576,635) | $ | 4.39 | |||||||||||||||||||||||||||||||
| Non-vested RSUs outstanding at March 31, 2026 | 2,500 | 52,037 | 92,317 | 26,667 | 173,521 | $ | 4.88 | |||||||||||||||||||||||||||||||
•The total grant-date fair value of RSUs granted during the twelve months ended March 31, 2026 and 2025 was $29 thousand and $5.4 million, respectively.
•For the twelve months ended March 31, 2026, 2025 and 2024, the Company recorded stock-based compensation related to RSUs of $1.1 million , $1.5 million and $0.3 million, respectively.
•At March 31, 2026 and 2025, there were $0.6 million and $4.2 million of unrecognized compensation costs related to RSUs subject to restriction and forfeiture awards, respectively, which is expected to be recognized over the remaining weighted average restriction and forfeiture period of 1.45 years and 2.3 years for fiscal 2026 and 2025, respectively.
Performance Stock Units
The Company first granted performance stock units ("PSUs") in the year ended March 31, 2024. The fair value assigned to PSUs is determined using the market price of the Company’s stock on the grant date for awards with a performance condition, and by using a Monte Carlo simulation for awards with a market condition. Existing PSUs with a performance condition vest over one year. Existing PSUs with a market condition vest over three years. Stock-based compensation costs associated with PSUs with a performance condition are re-assessed each reporting period based upon the estimated performance attainment on the reporting date until the performance conditions are met. The ultimate number of shares of common stock that are issued to an employee is the result of the actual performance of the Company at the end of the performance period compared to the performance targets and generally ranges from 0% to 200% of the initial PSU grant.
For the year ended March 31, 2026, PSU activity under the Plans was as follows:
| 2022 Employee Plan Number of Shares | 2024 Omnibus Plan Number of Shares | Total PSUs | Weighted-Average Grant Date Fair Value Per PSU | |||||||||||||||||||||||
| Non-vested PSUs outstanding at March 31, 2025 | — | 146,772 | 146,772 | $ | 3.47 | |||||||||||||||||||||
| Granted | — | — | — | $ | — | |||||||||||||||||||||
| Vested and issued | — | — | — | $ | — | |||||||||||||||||||||
| Forfeited | — | (146,772) | (146,772) | $ | 3.47 | |||||||||||||||||||||
Non-vested PSUs outstanding at March 31, 2026 | — | — | — | $ | — | |||||||||||||||||||||
•The total grant-date fair value of PSUs granted during the twelve months ended March 31, 2025 was $0.5 million. The were no PSUs granted during the twelve months ended March 31, 2026.
•For the twelve months ended March 31, 2026 and 2025, the Company recorded stock-based compensation (reversal) related to PSUs of $(35) thousand and $(1) thousand, respectively.
•At March 31, 2025 there were $475 thousand unrecognized compensation costs related to PSUs subject to restriction and forfeiture awards which is expected to be recognized over the remaining weighted average restriction and forfeiture period 2.8 years for fiscal 2025. At March 31, 2026 there were no unrecognized compensation costs related to PSUs subject to restriction and forfeiture award.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Jun 2, 2026 | Showing above |
| 2025 | Oct 14, 2025 | |
| 2024 | Jun 14, 2024 | |
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.