QUANTA SERVICES, INC.PWR

QUANTA SERVICES, INC. Stock Compensation Disclosure

10-KFiled Feb 19, 20264 min read
STOCK-BASED COMPENSATION:
Stock Incentive Plans
The Omnibus Plan was approved by Quanta’s stockholders in May 2019 and provides for the award of non-qualified stock options, incentive (qualified) stock options, stock appreciation rights, restricted stock awards, RSUs, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination of the foregoing. Current and prospective employees, directors, officers, advisors or consultants of Quanta or its affiliates are eligible to participate in the Omnibus Plan. In May 2022 and May 2025, Quanta’s stockholders approved amendments to the Omnibus Plan to increase the shares available for issuance. Subject to certain adjustments, the maximum number of shares available for issuance under the Omnibus Plan is 14.1 million. As of December 31, 2025, there were approximately 5.1 million shares available for issuance under the Omnibus
Plan. All awards subsequent to stockholder approval of the Omnibus Plan have been and will be made pursuant to the Omnibus Plan and applicable award agreements.
RSUs to be Settled in Common Stock
A summary of the activity for RSUs to be settled in common stock for the years ended December 31, 2025, 2024 and 2023 is as follows (RSUs in thousands):
202520242023
RSUsWeighted Average
Grant Date Fair Value
(Per Unit)		RSUsWeighted Average
Grant Date Fair Value
(Per Unit)		RSUsWeighted Average
Grant Date Fair Value
(Per Unit)
Unvested at January 12,024 $173.322,548 $104.763,263 $78.74
Granted638 $302.14857 $246.34684 $161.81
Vested(759)$154.01(1,216)$82.86(1,268)$68.06
Forfeited(149)$192.97(165)$165.14(131)$116.29
Unvested at December 311,754 $226.392,024 $173.322,548 $104.76
The approximate fair value of RSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $228.1 million, $316.4 million and $208.0 million, respectively.
During the years ended December 31, 2025, 2024 and 2023, Quanta recognized $141.4 million, $114.0 million and $94.5 million of non-cash stock compensation expense related to RSUs to be settled in common stock. As of December 31, 2025, there was $238.3 million of total unrecognized compensation expense related to unvested RSUs to be settled in common stock granted to both employees and non-employees. This cost is expected to be recognized over a weighted average period of 2.44 years.
PSUs to be Settled in Common Stock
A summary of the activity for PSUs to be settled in common stock for the years ended December 31, 2025, 2024 and 2023 is as follows (PSUs in thousands):
202520242023
PSUsWeighted Average
Grant Date Fair Value
(Per Unit)		PSUsWeighted Average
Grant Date Fair Value
(Per Unit)		PSUs
Weighted Average
Grant Date Fair Value
(Per Unit)
Unvested at January 1425 $177.69491 $129.70733 $65.39
Granted92 $259.17109 $263.34177 $174.50
Vested(165)$123.88(175)$96.45(413)$35.12
Forfeited(4)$222.94— N/A(6)$101.66
Unvested at December 31348 $224.15425 $177.69491 $129.70
The Monte Carlo simulation valuation methodology applied the following key inputs:
202520242023
Valuation date price based on February 27, 2025, March 4, 2024 and March 9, 2023 closing stock prices of Quanta common stock$259.26$243.34$160.55
Expected volatility (1)
34 %33 %35 %
Risk-free interest rate4.05 %4.43 %4.62 %
Term in years2.842.832.81
(1)    The expected volatility inputs for Quanta are based on historical volatility, which is based on Quanta’s dividend-adjusted closing prices over a period equivalent to the performance period.
During the years ended December 31, 2025, 2024 and 2023, Quanta recognized $40.5 million, $36.5 million and $32.3 million of non-cash stock compensation expense related to PSUs to be settled in common stock.
As of December 31, 2025, there was an estimated $30.1 million of total unrecognized compensation expense related to unearned and unvested PSUs. This amount is based on forecasted attainment of performance metrics and estimated forfeitures of unearned and unvested PSUs. The compensation expense related to outstanding PSUs can vary from period to period based on changes in forecasted achievement of established performance goals and the total number of shares of common stock that Quanta anticipates will be issued upon vesting of such PSUs. This cost is expected to be recognized over a weighted average period of 1.61 years.
During the years ended December 31, 2025, 2024 and 2023, 0.3 million, 0.3 million and 0.7 million shares of common stock were issued in connection with earned and vested PSUs. The approximate fair values of PSUs earned and vested during the years ended December 31, 2025, 2024 and 2023 were $83.9 million, $75.4 million and $115.5 million, respectively.
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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.

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