Public StoragePSA
Public Storage Stock Compensation Disclosure
12. Share-Based Compensation
We recorded share-based compensation expense associated with our equity awards in the various expense categories in the Consolidated Statements of Income as set forth in the following table.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (Amounts in thousands) | |||||||||||||||||
| Self-storage cost of operations | $ | 12,003 | $ | 12,128 | $ | 13,636 | |||||||||||
| Ancillary cost of operations | 1,276 | 1,161 | 1,289 | ||||||||||||||
| Real estate acquisition and development expense | 1,660 | 2,750 | 1,242 | ||||||||||||||
| General and administrative | 24,963 | 28,708 | 25,399 | ||||||||||||||
| Total | $ | 39,902 | $ | 44,747 | $ | 41,566 | |||||||||||
In addition, $2.2 million, $3.1 million, and $2.4 million share-based compensation cost was capitalized as real estate facilities for the years ended December 31, 2025, 2024, and 2023, respectively.
In May 2025, our shareholders approved an amendment and restatement of the 2021 Equity and Performance-Based Incentive plan to increase the number of common shares reserved for issuance under the 2021 Plan by an additional 3.0 million shares and to extend the termination date of the 2021 Plan from April 25, 2031 to May 7, 2035.
Following the amendment and restatement of our 2021 Equity and Performance-Based Incentive Plan in February 2024, which further provided for the grant of awards in the form of LTIP units and AO LTIP units of PSA OP, we issued LTIP units and AO LTIP units in substitution for 156,632 RSUs and 2,238,874 stock options, respectively. The LTIP units and AO LTIP units issued have the same vesting conditions as the original awards and remain classified as equity awards. The fair value of the LTIP units and AO LTIP units issued is materially the same as the original awards immediately before the substitution. As a result, we did not adjust the share-based compensation costs associated with these substituted awards.
Restricted Share Units and LTIP Units
We have service-based and performance-based RSUs and LTIP units outstanding, which generally vest over 5 to 8 years from the grant date. Performance-based RSUs and LTIP units outstanding vest upon meeting certain performance conditions or market conditions. Upon vesting, the grantee of RSUs receives new common shares equal to the number of vested RSUs, less common shares withheld to satisfy the grantee’s statutory tax liabilities arising from the vesting. Vested LTIP units represent noncontrolling interests of PSA OP and may be converted, subject to the satisfaction of all applicable vesting conditions, on a one-for-one basis into common units of PSA OP, which are exchangeable by the holders for cash, or at the Company’s election, on a one-for-one basis into common shares of the Company. Holders of RSUs and LTIP units are entitled to receive per-unit cash distributions equal to the per-share dividends received by our common shareholders, except that holders of performance-based awards are not entitled to receive the full distributions until expiration of the applicable performance period, at which time holders of any earned performance-based awards are entitled to receive a catch-up distribution for the periods prior to such time.
For the years ended December 31, 2025, 2024, and 2023, we incurred share-based compensation cost for RSUs and LTIP units of $30.5 million, $34.4 million, and $28.2 million, respectively.
During 2025, 36,802 performance-based LTIP unit awards (at target) were granted to certain executive officers and key employees. The vesting of performance-based LTIP unit awards is dependent upon meeting certain market conditions over a three-year period from March 5, 2025 through March 4, 2028, with continued service-based vesting through the first quarter of 2030. These LTIP unit awards require relative achievement of the Company’s total shareholder return as compared to the weighted average total shareholder return of specified peer groups and can result in grantees earning from zero to a maximum of 73,604 LTIP units.
Among the 128,565 RSUs and LTIP units granted during 2024, 34,550 performance-based LTIP unit awards (at target) and 3,770 performance-based RSUs were granted to certain executive officers and key employees. The vesting of performance-based LTIP unit awards is dependent upon meeting certain market conditions over a three-year period from March 5, 2024 through March 4, 2027, with continued service-based vesting through the first quarter of 2029. These LTIP unit awards require relative achievement of the Company’s total shareholder return as compared to the weighted average total shareholder return of specified peer groups and can result in grantees earning from zero to a maximum of 69,100 LTIP units. The vesting of performance-based RSUs is dependent upon meeting certain operational performance targets in 2024 and continued service through 2028. These performance targets were met at 100% achievement.
During 2023, 37,211 RSUs were awarded where vesting is dependent upon meeting certain market conditions over a three-year period from March 15, 2023 through March 14, 2026, with continued service-based vesting through the first quarter of 2028. These RSUs require relative achievement of the Company’s total shareholder return as compared to the weighted average total shareholder return of specified peer groups and can result in grantees earning up to 200% of the target RSUs originally granted. During 2024, we issued LTIP units in substitution for these outstanding RSUs. These targets were met at 130% achievement.
Remaining compensation cost related to RSUs and LTIP units outstanding at December 31, 2025 totals approximately $64.0 million and is expected to be recognized over the next three years on average. The following tables set forth relevant information with respect to restricted shares:
| Service-Based | Performance-Based (a) | Total | |||||||||||||||||||||||||||||||||
| Number of Awards | Weighted-Average Grant-Date Fair Value | Number of Awards | Weighted-Average Grant-Date Fair Value | Number of Awards | Weighted-Average Grant-Date Fair Value | ||||||||||||||||||||||||||||||
| Unvested awards outstanding January 1, 2023 | 407,812 | $ | 258.34 | 68,235 | $ | 336.33 | 476,047 | $ | 269.52 | ||||||||||||||||||||||||||
| Granted | 77,974 | 296.19 | 37,211 | 295.61 | 115,185 | 296.01 | |||||||||||||||||||||||||||||
| Vested | (132,909) | (245.19) | (9,250) | (275.12) | (142,159) | (247.13) | |||||||||||||||||||||||||||||
| Forfeited | (30,229) | (266.60) | (2,183) | (300.86) | (32,412) | (268.91) | |||||||||||||||||||||||||||||
| Unvested awards outstanding December 31, 2023 | 322,648 | $ | 272.14 | 94,013 | $ | 327.06 | 416,661 | $ | 284.53 | ||||||||||||||||||||||||||
| Granted (b) | 83,651 | 308.24 | 44,914 | 228.68 | 128,565 | 280.45 | |||||||||||||||||||||||||||||
| Vested | (130,321) | (259.20) | (10,004) | (275.12) | (140,325) | (260.33) | |||||||||||||||||||||||||||||
| Forfeited | (18,104) | (286.93) | (866) | (300.86) | (18,970) | (287.57) | |||||||||||||||||||||||||||||
| Unvested awards outstanding December 31, 2024 | 257,874 | $ | 289.35 | 128,057 | $ | 296.79 | 385,931 | $ | 291.82 | ||||||||||||||||||||||||||
| Granted | 74,479 | 262.47 | 36,802 | 293.08 | 111,281 | 272.59 | |||||||||||||||||||||||||||||
| Vested | (104,560) | (274.02) | (27,148) | (350.21) | (131,708) | (289.73) | |||||||||||||||||||||||||||||
| Forfeited | (16,603) | (297.39) | — | — | (16,603) | (297.39) | |||||||||||||||||||||||||||||
| Unvested awards outstanding December 31, 2025 | 211,190 | $ | 286.83 | 137,711 | $ | 285.27 | 348,901 | $ | 286.21 | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Amounts for the year: | (Dollar Amounts in Thousands) | |||||||||||||||||||
| Fair value of vested shares and vested LTIP units on vesting date | $ | 36,864 | $ | 41,848 | $ | 41,999 | ||||||||||||||
| Cash paid for taxes upon vesting in lieu of issuing common shares | $ | 8,646 | $ | 12,667 | $ | 13,950 | ||||||||||||||
| Common shares issued upon vesting | 50,016 | 63,840 | 96,657 | |||||||||||||||||
| Vested LTIP units issued upon vesting | 54,136 | 40,396 | — | |||||||||||||||||
| Average assumptions used in valuing restricted share units with market conditions with the Monte-Carlo simulation method: | ||||||||||||||||||||
| Time from the valuation date to the end of the Performance Period | 3 | 3 | 3 | |||||||||||||||||
| Risk-free interest rate | 4.0% | 4.2% | 3.8% | |||||||||||||||||
| Expected volatility, based upon historical volatility | 24.9% | 23.8% | 28.2% | |||||||||||||||||
| Expected dividend yield | 3.8% | 4.3% | 4.1% | |||||||||||||||||
(a)Number of performance-based awards are presented based on the target performance pursuant to the terms of each applicable award when granted and adjusted to the actual number of awards earned based on the actual performance.
(b)Amount granted for performance-based awards includes 6,594 LTIP units for payout adjustments based on Total Shareholder Return modifier for awards granted in 2022.
Stock Options and AO LTIP Units
We have service-based and performance-based stock options and AO LTIP units outstanding. Performance-based stock options and AO LTIP units vest upon meeting certain performance conditions or market conditions. Stock options and AO LTIP units generally vest over 1 to 5 years, expire 10 years after the grant date, and have an exercise or conversion price equal to the closing trading price of our common shares on the grant date. Common shares of the Company are issued for options exercised and vested LTIP units are issued for AO LTIP units converted. Employees cannot require the Company to settle their awards in cash.
For the years ended December 31, 2025, 2024, and 2023, we incurred share-based compensation cost for outstanding stock options of $10.6 million, $12.7 million and $14.9 million, respectively.
During 2025, 103,839 of service-based AO LTIP units, 61,388 of performance-based AO LTIP units (at target), and 3,177 service-based options were granted to certain executive officers and trustees. The vesting of the performance-based AO LTIP units is dependent upon meeting certain market conditions over a three-year period from March 5, 2025 through March 4, 2028, with continued service-based vesting through the first quarter of 2030. These performance-based AO LTIP units require relative achievement of the Company’s total shareholder return as compared to the weighted average total shareholder return of specified peer groups and can result in grantees earning from zero to a maximum of 122,776 AO LTIP units.
During 2024, we granted 106,484 of service-based AO LTIP units, 63,717 of performance-based AO LTIP units, and 3,600 service-based options to certain executive officers and trustees. The vesting of the performance-based AO LTIP units is dependent upon meeting certain market conditions over a three-year period from March 5, 2024 through March 4, 2027, with continued service-based vesting through the first quarter of 2029. These performance-based AO LTIP units require relative achievement of the Company’s total shareholder return as compared to the weighted average total shareholder return of specified peer groups and can result in grantees earning from zero to a maximum of 127,434 AO LTIP units.
During 2023, we granted 60,000 stock options in connection with non-management trustee compensation. 117,168 stock options were awarded during 2023 where vesting is dependent upon meeting certain market conditions over the three-year period from March 15, 2023 through March 14, 2026, with continued service-based vesting through the first quarter of 2028. These stock options require relative achievement of the Company’s total shareholder return as compared to the weighted average total shareholder return of specified peer groups and can result in grantees earning up to 200% of the target options originally granted. During 2024, we issued AO LTIP units in substitution for these stock options.
The stock options and AO LTIP units outstanding at December 31, 2025 have an aggregate intrinsic value (the excess, if any, of each option’s market value over the exercise price) of approximately $73.2 million and remaining average contractual lives of approximately four years. Total compensation cost related to unvested AO LTIP units and stock options that have not yet been recognized is $10.1 million and are expected to be recognized as compensation cost over approximately two years on average. Exercisable stock options and convertible AO LTIP units have an aggregate intrinsic value of approximately $70.4 million at December 31, 2025 and remaining average contractual lives of approximately four years.
Additional information with respect to stock options and AO LTIP units during 2025, 2024, and 2023 is as follows:
| Service-Based | Performance-Based (a) | Total | |||||||||||||||||||||||||||||||||
| Number of Awards | Weighted Average Exercise or Conversion Price per Award | Number of Awards | Weighted Average Exercise or Conversion Price per Award | Number of Awards | Weighted Average Exercise or Conversion Price per Award | ||||||||||||||||||||||||||||||
| Awards outstanding January 1, 2023 | 1,854,041 | $ | 209.53 | 1,310,442 | $ | 229.39 | 3,164,483 | $ | 217.75 | ||||||||||||||||||||||||||
| Granted (b) | 60,000 | 286.81 | 180,425 | 265.46 | 240,425 | 270.79 | |||||||||||||||||||||||||||||
| Exercised | (272,250) | (167.15) | (34,401) | (221.68) | (306,651) | (173.26) | |||||||||||||||||||||||||||||
| Cancelled | (12,049) | (293.81) | (34,987) | (229.34) | (47,036) | (245.86) | |||||||||||||||||||||||||||||
| Awards outstanding December 31, 2023 | 1,629,742 | $ | 218.83 | 1,421,479 | $ | 234.16 | 3,051,221 | $ | 225.97 | ||||||||||||||||||||||||||
| Granted (c) | 110,084 | 278.82 | 87,782 | 297.12 | 197,866 | 286.94 | |||||||||||||||||||||||||||||
| Exercised or converted (d) | (381,850) | (194.09) | (301,498) | (221.83) | (683,348) | (206.33) | |||||||||||||||||||||||||||||
| Cancelled | (10,110) | (320.69) | (5,164) | (221.68) | (15,274) | (287.21) | |||||||||||||||||||||||||||||
| Awards outstanding December 31, 2024 | 1,347,866 | $ | 229.98 | 1,202,599 | 241.90 | 2,550,465 | $ | 235.60 | |||||||||||||||||||||||||||
| Granted | 107,016 | 305.46 | 61,388 | 311.30 | 168,404 | 307.59 | |||||||||||||||||||||||||||||
| Exercised or converted (e) | (223,705) | (209.97) | (34,538) | (221.68) | (258,243) | (211.54) | |||||||||||||||||||||||||||||
| Cancelled | (6,884) | (386.32) | — | — | (6,884) | (386.32) | |||||||||||||||||||||||||||||
| Awards outstanding December 31, 2025 | 1,224,293 | $ | 239.35 | 1,229,449 | $ | 245.93 | 2,453,742 | $ | 242.65 | ||||||||||||||||||||||||||
| Awards exercisable or convertible at December 31, 2025 | 1,049,184 | $ | 229.89 | 873,551 | $ | 230.71 | 1,922,735 | $ | 230.26 | ||||||||||||||||||||||||||
(a)Number of performance-based awards are presented based on the target performance pursuant to the terms of each applicable award when granted and adjusted to the actual number of awards earned based on the actual performance.
(b)Amount granted for performance-based stock options includes 63,257 options for payout adjustments based on Total Shareholder Return modifier for options granted in 2021.
(c)Amount granted for performance-based awards includes 24,065 AO LTIP units for payout adjustments based on Total Shareholder Return for awards granted in 2022.
(d)214,996 common shares were issued upon the exercise of stock options and 186,944 vested LTIP units were issued upon conversion of 468,352 AO LTIP units in the year ended December 31, 2024.
(e)41,367 common shares were issued upon the exercise of stock options and 66,936 vested LTIP units were issued upon conversion of 216,876 AO LTIP units in the year ended December 31, 2025.
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Aggregate exercise date intrinsic value of options and AO LTIP units exercised or converted during the year (in 000's) | $ | 15,091 | $ | 85,833 | $ | 35,662 | ||||||||||||||
| Average assumptions used in valuing options and AO LTIP units with the Black-Scholes method: | ||||||||||||||||||||
| Expected life of options in years, based upon historical experience | 6 | 6 | 6 | |||||||||||||||||
| Risk-free interest rate | 4.1% | 4.2% | 3.5% | |||||||||||||||||
| Expected volatility, based upon historical volatility | 25.1% | 24.4% | 24.4% | |||||||||||||||||
| Expected dividend yield | 3.9% | 4.3% | 4.2% | |||||||||||||||||
| Average assumptions used in valuing options and AO LTIP units with market conditions with the Monte-Carlo simulation method: | ||||||||||||||||||||
| Expected life of options in years, based upon historical experience | 7 | 7 | 7 | |||||||||||||||||
| Risk-free interest rate | 4.1% | 4.1% | 3.5% | |||||||||||||||||
| Expected volatility, based upon historical volatility | 24.7% | 24.1% | 23.8% | |||||||||||||||||
| Expected dividend yield | 3.8% | 4.3% | 4.1% | |||||||||||||||||
| Average estimated value of options and AO LTIP Units granted during the year | $ | 61.73 | $ | 51.33 | $ | 56.86 | ||||||||||||||
Trustee Deferral Program
Non-management trustees may elect to receive all or a portion of their cash retainers in cash, unrestricted common shares, fully-vested LTIP units, or DSUs to be settled at a specified future date. Unrestricted common shares and/or LTIP units and DSUs will be granted to the non-management trustee on the last day of each calendar quarter based on the cash retainer earned for that quarter and converted into a number of shares or units based on the applicable closing price of our common shares on such date. During 2025, we granted 2,112 fully vested LTIP units, 790 DSUs, and 467 unrestricted common shares. During 2025, 602 previously granted DSUs were settled in common shares. A total of 11,674 DSUs were outstanding at December 31, 2025 (11,486 at December 31, 2024).Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
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.