Privia Health Group, Inc.PRVA
Privia Health Group, Inc. Stock Compensation Disclosure
Stockholders’ Equity
2021 Omnibus Incentive Plan
On April 6, 2021, the Board approved the 2021 Omnibus Incentive Plan (the “Plan”) which permits awards in respect of up to 10,278,581 shares of Common Stock. The Plan also provides for an automatic increase on the first day of each fiscal year following the effective date of the Plan by an amount equal to the lesser of (i) 5% of outstanding shares on December 31 of the immediately preceding fiscal year or (ii) such number of shares as determined by the Company’s Compensation Committee in its discretion. As of December 31, 2025, the Board has authorized 22,215,088 shares for issuance under the Plan. The Plan provides for the granting of stock options at a price equal to at least 100% of the fair market value of Common Stock as of the date of grant. The Plan also provides for the granting of Stock Appreciation Rights, Restricted Stock, Restricted Stock Units (“RSUs”), PSUs and other cash-based
or other stock-based awards, all of which must be granted at not less than the fair market value of Common Stock as of the date of grant.
Prior to the Company’s initial public offering (“IPO”), the Company granted stock options pursuant to the PH Group Parent Corp. Stock Option Plan (the “PH Parent Option Plan”). The Company no longer issues grants under the PH Parent Option Plan and no shares of Common Stock are reserved for future issuance thereunder.
2021 Employee Stock Purchase Plan
In April 2021, the Board of Directors approved the Company’s 2021 Employee Stock Purchase Plan (“2021 ESPP”). The 2021 ESPP became effective upon the execution of the underwriting agreement for the Company’s IPO in April 2021. Per the 2021 ESPP, shares may be newly issued shares, treasury shares or shares acquired on the open market. The Compensation Committee may elect to increase the total number of shares available for purchase under the 2021 ESPP as of the first day of each Company fiscal year following the effective date of the 2021 ESPP in an amount equal to up to one percent (1%) of the shares issued and outstanding on the immediately preceding December 31; provided that the maximum number of shares that may be issued under the Plan in any event shall be 10,278,581 shares. As of the date of the IPO, the Company has reserved 1,027,858 shares of common stock for issuance under the 2021 ESPP. As of December 31, 2025, no shares have been issued under this plan.
Novant Health Private Placement
On March 2, 2023, the Company entered into a strategic alignment agreement (the “Equity Alignment Agreement”) with ChoiceHealth, Inc. (“Novant Sub”), a subsidiary of Novant Health, Inc. (“Novant Health”), in connection with the strategic partnership between the Company and Novant Health entered into in November 2022 to launch Privia Medical Group — North Carolina.
Pursuant to the Equity Alignment Agreement, Novant Sub will be entitled to receive, and the Company agreed to issue, shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), to Novant Sub any time each of the following events occurs, in the following amounts:
1.The Company will issue 745,712 shares of Common Stock to Novant Sub each time Privia Medical Group — North Carolina implements 1,000 providers in specified markets in North Carolina.
2.The Company will issue 372,856 shares of Common Stock to Novant Sub each time the Company and Novant Health enter a new state pursuant to a mutually agreed business plan developed for such state.
3.The Company will issue 745,712 shares of Common Stock to Novant Sub each time the partnership between the Company and Novant Health for each new state implements 1,000 providers in specified core markets in such state.
The Equity Alignment Agreement will renew every four years, subject to the delivery of a third-party valuation opinion. The renewal will be required to use the same issuance events, but the number of shares may be adjusted to be consistent with the valuation opinion. The total number of shares of Common Stock issuable to Novant Sub under the Equity Alignment Agreement and all renewals of the Equity Alignment Agreement are subject to a total cap equal to 19.9% of the total number of shares of Common Stock outstanding as of the effective date of the Equity Alignment Agreement and as of the effective date of all renewals, whichever is lowest. No shares have been issued to Novant Sub under the Equity Alignment Agreement as of December 31, 2025. A member of the Board is a member of the board of trustees of Novant Health.
Stock option activity
The fair value of stock options issued under the Plan is calculated using a Black-Scholes option pricing model that requires several inputs, including expected stock price volatility, the fair value of the underlying common stock, the risk-free interest rate, expected term of the award and dividend yield. The Company estimated the inputs as follows:
•Volatility is based on the Company’s historical common stock volatility since inception.
•Fair value of common stock is the publicly quoted price on Nasdaq.
•The risk-free interest rate is the implied yield available on U.S. Treasury zero-coupon issues with an equivalent expected term of the option.
•The expected term is the period that the Company’s stock-based awards are expected to be outstanding. The expected term assumption is based on the simplified method in which the expected term is equal to the average of the stock-based award’s weighted-average vesting period and its contractual term. The Company expects to continue using the simplified method until sufficient information about historical behavior is available.
•Dividend yield is zero, as the Company has not declared or paid any cash dividend and does not currently plan to pay a cash dividend in the foreseeable future.
The following table summarizes stock option activity under the PH Parent Option Plan and Plan:
| Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Outstanding at January 1, 2023 | 13,176,721 | $ | 7.86 | 9.02 | $ | 197,695 | |||||||||||||||||
| Granted | — | — | |||||||||||||||||||||
| Exercised | (3,104,257) | 2.82 | |||||||||||||||||||||
| Forfeited | (251,710) | 22.78 | |||||||||||||||||||||
Outstanding at December 31, 2023 | 9,820,754 | $ | 9.06 | 7.90 | $ | 138,028 | |||||||||||||||||
| Granted | — | — | |||||||||||||||||||||
| Exercised | (1,259,513) | 2.08 | |||||||||||||||||||||
| Forfeited | (34,331) | 24.50 | |||||||||||||||||||||
Outstanding at December 31, 2024 | 8,526,910 | $ | 10.03 | 7.17 | $ | 93,074 | |||||||||||||||||
| Granted | — | — | |||||||||||||||||||||
| Exercised | (973,513) | 8.10 | |||||||||||||||||||||
| Forfeited | (18,732) | 21.34 | |||||||||||||||||||||
Balance at December 31, 2025 | 7,534,665 | $ | 10.26 | 6.28 | $ | 102,102 | |||||||||||||||||
| Exercisable at December 31, 2025 | 7,511,216 | $ | 10.21 | 6.28 | $ | 102,102 | |||||||||||||||||
RSU Activity
The following table summarizes the RSU activity under the Plan:
| Number of Shares | Grant Date Fair Value | ||||||||||
Outstanding at January 1, 2023 | 2,404,664 | $ | 23.81 | ||||||||
| Granted | 1,161,301 | 27.50 | |||||||||
| Vested | (425,076) | 24.11 | |||||||||
| Forfeited | (193,787) | 24.43 | |||||||||
Unvested and outstanding at December 31, 2023 | 2,947,102 | $ | 25.18 | ||||||||
| Granted | 2,203,174 | 22.55 | |||||||||
| Vested | (815,637) | 25.69 | |||||||||
| Forfeited | (192,364) | 23.85 | |||||||||
Unvested and outstanding at December 31, 2024 | 4,142,275 | $ | 23.73 | ||||||||
| Granted | 2,223,500 | 24.85 | |||||||||
| Vested | (2,318,016) | 23.67 | |||||||||
| Forfeited | (200,576) | 24.23 | |||||||||
| Unvested and outstanding at December 31, 2025 | 3,847,183 | $ | 24.39 | ||||||||
PSU Activity
PSUs granted under the Plan generally vest based on the satisfaction of specified service conditions, performance-based conditions, and/or market conditions. PSUs represent a target number of units that may be paid out at zero to 200% of target at the end of a multi-year award cycle, typically three years, subject to continued employment of recipients and the achievement of such performance-based and market conditions. The performance-based conditions are established relative to certain Company-specific financial targets. For PSUs with performance-based conditions where the target will be fully established at a future date, the Company has determined that the service inception date precedes the grant date for these awards as (a) the awards were authorized prior to establishing an accounting grant date, (b) the recipients began providing services prior to the grant date, and (c) there are performance conditions that, if not met by the accounting grant date, will result in the forfeiture of the awards. As the service inception date precedes the accounting grant date, stock-based compensation expense is recognized over the requisite service period based on the estimated fair value at each reporting date. For PSUs that are solely based on employment and the achievement of certain market performance metric targets, which have already been determined, the fair value of the PSUs is determined on the grant date using a Monte Carlo valuation model. Stock-based compensation expense for these awards are fixed and is recognized on a straight-line basis over the requisite service period. At the end of the performance period, the Compensation Committee of the Board of Directors of the Company determines performance against the applicable performance-based conditions and/or market conditions. Generally, PSUs vest upon
the determination by the Compensation Committee of the Board of Directors of the Company of the achievement of applicable performance-based conditions and/or market conditions,, unless subject to earlier vesting, such as upon a Termination without Cause (as defined in the Plan) following a Change-in-Control of the Company (as defined in the Plan). PSUs do not convey voting rights.
The following table summarizes the PSU activity under the Plan:
| Number of Shares | Grant Date Fair Value | ||||||||||
| Unvested and outstanding at January 1, 2023 | — | $ | — | ||||||||
Granted | 781,132 | 31.91 | |||||||||
| Vested | — | — | |||||||||
| Forfeited | (5,103) | 27.61 | |||||||||
| Unvested and outstanding at December 31, 2023 | 776,029 | $ | 31.94 | ||||||||
Granted | 904,960 | 22.92 | |||||||||
| Vested | (15,735) | 29.93 | |||||||||
| Forfeited | (27,573) | 29.05 | |||||||||
| Unvested and outstanding at December 31, 2024 | 1,637,681 | $ | 27.02 | ||||||||
Granted | 826,270 | 25.21 | |||||||||
| Vested | — | — | |||||||||
| Forfeited | (20,620) | 27.07 | |||||||||
| Unvested and outstanding at December 31, 2025 | 2,443,331 | $ | 26.41 | ||||||||
Stock-based compensation expense
Total stock-based compensation expense was approximately $71.1 million, $56.7 million and $37.1 million for the years ended December 31, 2025, 2024, and 2023 respectively. At December 31, 2025, there was approximately $86.2 million of unrecognized stock-based compensation expense related to unvested awards that is expected to be recognized over a weighted-average period of 1.0 year. As of December 31, 2025, the total intrinsic value of options exercised and the total fair value of shares vested for the 2025 period was approximately $15.3 million and $7.6 million, respectively.
Stock-based compensation expense was classified in the consolidated statements of operations as follows:
For the Years Ended December 31, | |||||||||||||||||
| (Dollars in Thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Cost of platform | $ | 25,391 | $ | 18,781 | $ | 11,980 | |||||||||||
| Sales and marketing | 5,416 | 4,097 | 2,475 | ||||||||||||||
| General and administrative | 40,261 | 33,802 | 22,643 | ||||||||||||||
| Total stock-based compensation | $ | 71,068 | $ | 56,680 | $ | 37,098 | |||||||||||
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.