PRICESMART INCPSMT
PRICESMART INC Stock Compensation Disclosure
STOCK BASED COMPENSATION
Stock Based Compensation – The Company utilizes three types of equity awards: restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and, except for fiscal year 2024, performance stock units (“PSUs”).
The Company adopted the 2013 Equity Incentive Award Plan (the "2013 Plan") for the benefit of its eligible employees, consultants and non-employee directors on January 22, 2013. The 2013 Plan initially provided for awards covering up to 600,000 shares of common stock plus the number of shares that remained available for issuance as of January 22, 2013 under three equity participation plans previously maintained by the Company. The 2013 plan was amended in fiscal year 2021, to increase the number of shares of Common Stock available for the grant of awards by 500,000 and it was further amended to increase the number of shares of Common Stock available for the grant of awards by an additional 750,000 shares in both fiscal years 2023 and 2025. The number of shares reserved for issuance under the 2013 Plan increases during the term of the plan by the number of shares relating to awards outstanding under the 2013 Plan or any of the prior plans that expire, or are forfeited, terminated, canceled or repurchased, or are settled in cash in lieu of shares. However, in no event will more than an aggregate of 3,531,818 shares of the Company’s common stock be issued under the 2013 Plan.
The following table summarizes the shares authorized and shares available for future grants:
| Shares available to grant | |||||||||||||||||
Shares authorized for issuance as of August 31, 2025 (including shares originally authorized for issuance under prior plans) | August 31, 2025 | August 31, 2024 | |||||||||||||||
| 2013 Plan | 3,067,923 | 2,209,078 | 596,058 | ||||||||||||||
The following table summarizes the components of the stock-based compensation expense for the twelve-month periods ended August 31, 2025, 2024 and 2023 (in thousands), which are included in general and administrative expense and warehouse club and other operations in the consolidated statements of income:
| Years Ended August 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Restricted stock awards | $ | 13,629 | $ | 12,128 | $ | 10,641 | |||||||||||
| Restricted stock units | 4,671 | 4,501 | 3,701 | ||||||||||||||
| Performance stock units | 512 | 664 | 2,232 | ||||||||||||||
| Stock-based compensation expense | $ | 18,812 | $ | 17,293 | $ | 16,574 | |||||||||||
The following tables summarize other information related to stock-based compensation:
| Balance as of | |||||||||||||||||
| August 31, 2025 | August 31, 2024 | August 31, 2023 | |||||||||||||||
| Remaining unrecognized compensation cost (in thousands) | $ | 37,448 | $ | 43,490 | $ | 15,386 | |||||||||||
| Weighted average period of time over which this cost will be recognized (years) | 3 | 3 | 2 | ||||||||||||||
| Years Ended August 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Excess tax deficiency on stock-based compensation (in thousands) | $ | (919) | $ | (588) | $ | (2,787) | |||||||||||
The restricted stock awards and units generally vest over a three-year or five-year period and the unvested portion of the award is forfeited if the employee or non-employee director leaves the Company before the vesting period is completed.
Restricted stock awards, restricted stock units, and performance-based restricted stock units activity for the twelve months ended August 31, 2025, 2024 and 2023 was as follows:
| Years Ended | |||||||||||||||||
| August 31, 2025 | August 31, 2024 | August 31, 2023 | |||||||||||||||
| Grants outstanding at beginning of period | 767,947 | 342,741 | 361,822 | ||||||||||||||
| Granted | 231,814 | 657,649 | 365,850 | ||||||||||||||
| Forfeited | (15,357) | (61,029) | (118,577) | ||||||||||||||
| Vested | (223,451) | (171,414) | (266,354) | ||||||||||||||
| Grants outstanding at end of period | 760,953 | 767,947 | 342,741 | ||||||||||||||
The following table summarizes the weighted average per share grant date fair value for restricted stock awards, restricted stock units, and performance based restricted stock units for fiscal years 2025, 2024 and 2023:
| Weighted Average Grant Date Fair Value | Years Ended | |||||||||||||||||||
| August 31, 2025 | August 31, 2024 | August 31, 2023 | ||||||||||||||||||
| RSAs, RSUs, and PSUs granted | $ | 90.28 | $ | 73.28 | $ | 63.93 | ||||||||||||||
| RSAs, RSUs, and PSUs vested | $ | 71.99 | $ | 71.12 | $ | 70.26 | ||||||||||||||
| RSAs, RSUs, and PSUs forfeited | $ | 77.93 | $ | 66.97 | $ | 66.14 | ||||||||||||||
The following table summarizes the total fair market value of restricted stock awards, restricted stock units, and performance based restricted stock units vested for the period (in thousands):
| Years Ended | |||||||||||||||||
| August 31, 2025 | August 31, 2024 | August 31, 2023 | |||||||||||||||
| Total fair market value of restricted stock awards and units vested (in thousands) | $ | 20,727 | $ | 13,424 | $ | 19,325 | |||||||||||
At the vesting dates for equity awards to employees, the Company repurchases a portion of the shares that have vested at the prior day's closing price per share. The funds are used to pay the employees' tax withholding requirements related to the vesting of restricted stock awards. The Company expects to continue this practice going forward.
Shares of common stock repurchased by the Company are recorded at cost as treasury stock and result in the reduction of stockholders’ equity in the Company’s consolidated balance sheets. The Company may reissue these treasury shares.
The following table summarizes the equity securities repurchased during fiscal years 2025, 2024 and 2023 as part of the Company's stock-based compensation programs:
| Years Ended | |||||||||||||||||
| August 31, 2025 | August 31, 2024 | August 31, 2023 | |||||||||||||||
| Shares repurchased | 72,284 | 44,413 | 99,998 | ||||||||||||||
| Cost of repurchase of shares (in thousands) | $ | 6,710 | $ | 3,512 | $ | 7,245 | |||||||||||
The Company reissues treasury shares as part of its stock-based compensation programs. The following table summarizes the treasury shares reissued during the period:
| Years Ended | |||||||||||||||||
| August 31, 2025 | August 31, 2024 | August 31, 2023 | |||||||||||||||
| Reissued treasury shares | 65,000 | 3,000 | 6,333 | ||||||||||||||
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.