PROTHENA CORP PUBLIC LTD COPRTA
PROTHENA CORP PUBLIC LTD CO Stock Compensation Disclosure
Share-Based Compensation
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Equity Incentive Plans
The Company’s equity incentive plans, the 2018 Long Term Incentive Plan, as amended (the “2018 LTIP”), 2020 Employment Inducement Incentive Plan, as amended (the “2020 EIIP”), and previously, the Amended and Restated 2012 Long Term Incentive Plan (the “2012 LTIP”), reserve ordinary shares for the issuance of stock options, stock appreciation rights, restricted shares, RSUs, performance bonus awards, performance share units awards, dividend equivalents and other share or cash-based awards to eligible individuals. Options granted under each of the 2018 LTIP, 2020 EIIP, and 2012 LTIP expire no later than years from the date of grant.
In May 2025, the Company’s shareholders approved an amendment to the 2018 LTIP to increase the number of ordinary shares available for issuance under the 2018 LTIP by 2,000,000 ordinary shares. As of December 31, 2025, the number of ordinary shares authorized under the 2018 LTIP was 18,620,433. Upon adoption of the 2018 LTIP, no new awards are permitted under the 2012 LTIP.
As of December 31, 2025, the number of ordinary shares authorized under the 2020 EIIP was 1,485,000 and 666,163 ordinary shares remained available for future awards under the 2020 EIIP. The Company’s Board of Directors has adopted a series of amendments to increase the ordinary shares available for issuance under the 2020 EIIP and it reserves the right to both amend the 2020 EIIP to increase the number of ordinary shares available and make additional awards to key new hires.
The Company’s option awards generally vest over four years, while RSU awards generally vest over either or three years. As of December 31, 2025, 5,400,701 ordinary shares remained available for grant under the Company’s equity incentive plans.
Share-based Compensation Expense
Share-based compensation expense recorded in these Consolidated Financial Statements was based on awards granted under the 2012 LTIP, the 2018 LTIP, and the 2020 EIIP. The estimated forfeiture rate as of December 31, 2025 was 11%. Changes in our estimates and assumptions relating to forfeitures may cause us to realize changes in stock-based compensation expense in the future.
The amount of unearned share-based compensation related to unvested stock options at December 31, 2025, is $33.0 million. The weighted-average period over which this unearned share-based compensation is expected to be recognized is 2.51 years.
The following table summarizes share-based compensation expense for the periods presented (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Research and development | $ | 14,065 | $ | 20,931 | $ | 19,211 | |||||||||||
| General and administrative | 21,494 | 25,033 | 21,703 | ||||||||||||||
Restructuring costs (1) | 2,081 | — | — | ||||||||||||||
| Total share-based compensation expense | $ | 37,640 | $ | 45,964 | $ | 40,914 | |||||||||||
(1)Restructuring costs for the year ended December 31, 2025 includes $2.1 million of share-based compensation expense related to the contractual acceleration of vesting of certain option awards granted to executive officers.
The Company recognized no tax benefits for the year ended December 31, 2025 due to the Company’s full valuation allowance on its deferred tax assets. The Company recognized tax benefits from share-based awards of $8.3 million and $7.2 million for the years ended December 31, 2024 and 2023, respectively.
The fair value of the options granted to employees and non-employee directors during the years ended December 31, 2025, 2024 and 2023 was estimated as of the grant date using the Black-Scholes option-pricing model using the key assumptions listed in the following table.
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
Expected volatility | 76.5% | - | 79.0% | 74.5% | - | 78.6% | 76.4% | - | 90.1% | ||||||||||||||||||||||||||
Risk-free interest rate | 3.8% | - | 4.4% | 3.5% | - | 4.7% | 3.5% | - | 4.8% | ||||||||||||||||||||||||||
| Expected dividend yield | —% | —% | —% | ||||||||||||||||||||||||||||||||
Expected term (in years) | 4.8 | - | 5.8 | 4.6 | - | 5.7 | 4.4 | - | 5.4 | ||||||||||||||||||||||||||
| Weighted average grant date fair value | $9.49 | $18.69 | $37.32 | ||||||||||||||||||||||||||||||||
The fair value of employee stock options is amortized on a straight-line basis over the requisite service period for each award. Each of the inputs discussed above is subjective and generally requires management judgment to determine.
The following table summarizes the Company’s stock option activity during the year ended December 31, 2025:
| Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Outstanding at December 31, 2024 | 11,107,373 | $ | 28.70 | 6.16 | $ | 3,401 | |||||||||||||||||
Granted | 2,086,686 | 14.26 | |||||||||||||||||||||
| Exercised | — | — | |||||||||||||||||||||
| Forfeited | (1,409,899) | 28.69 | |||||||||||||||||||||
| Expired | (1,494,866) | 39.64 | |||||||||||||||||||||
Outstanding at December 31, 2025 | 10,289,294 | $ | 24.18 | 5.03 | $ | 402 | |||||||||||||||||
Vested and expected to vest at December 31, 2025 | 9,995,785 | $ | 24.26 | 4.92 | $ | 385 | |||||||||||||||||
Exercisable at December 31, 2025 | 7,838,889 | $ | 24.56 | 3.95 | $ | 22 | |||||||||||||||||
The total intrinsic value of options exercised was nil, $1.3 million, and $52.1 million during the years ended December 31, 2025, 2024 and 2023, respectively, determined as of the date of exercise.
The following table summarizes the activity and related information for RSUs during the year ended December 31, 2025:
| Number of Units | Weighted Average Grant-Date Fair Value | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||||||||||||
Unvested at December 31, 2024 | 6,000 | $ | 51.80 | 0.71 | $ | 83 | ||||||||||||||||||||
Units Granted | 1,298,136 | 8.65 | ||||||||||||||||||||||||
| Units Vested | (6,000) | 51.80 | ||||||||||||||||||||||||
| Units Forfeited | (207,358) | 14.04 | ||||||||||||||||||||||||
Unvested at December 31, 2025 | 1,090,778 | $ | 7.63 | 1.08 | $ | 10,417 | ||||||||||||||||||||
Unvested and expected to vest at December 31, 2025 | 964,269 | $ | 7.61 | 1.03 | $ | 9,209 | ||||||||||||||||||||
As of December 31, 2025, total compensation cost not yet recognized related to unvested RSUs was $6.2 million, which is expected to be recognized over a weighted-average period of 2.53 years. RSUs settle into ordinary shares upon vesting.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2018 | Mar 15, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Feb 27, 2017 | |
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.