RESIDEO TECHNOLOGIES, INC.REZI
RESIDEO TECHNOLOGIES, INC. Stock Compensation Disclosure
Stock-Based Compensation Plans
The Stock Incentive Plan, which consists of the Amended and Restated 2018 Stock Incentive Plan of Resideo Technologies, Inc. and its Affiliates and the 2018 Stock Incentive Plan for Non-Employee Directors of Resideo Technologies, Inc., provides for the grant of stock options, stock appreciation rights, restricted stock units, restricted stock, and other stock-based awards. At December 31, 2025, 27.8 million shares of our common stock are authorized under the Stock Incentive Plan and 7.6 million are available to be granted in the future.
Our stock-based compensation expense, net of tax was $59 million, $64 million, and $43 million for the years ended December 31, 2025, 2024, and 2023. Stock-based compensation expense is included in either selling, general and administrative expenses or restructuring, impairment and extinguishment costs in the Consolidated Statements of Operations based on the nature of the expense.
Restricted Stock Units and Performance Stock Units
RSUs are issued to certain key employees and to non-employee directors. These awards entitle the holder to receive one share of common stock for each unit upon vesting. RSUs typically become fully vested over a three-year period following the grant date; however, RSUs granted to our non-employee directors have a one-year service period. We expense the grant-date fair value of these awards on a straight-line basis over the vesting period.
PSUs are issued to certain key employees. The number of shares of common stock that may ultimately be issued as settlement for each award may range from 0% to 200% of the target award, subject to the achievement of our market-based Total Shareholder Return (“TSR”) relative to the performance of the S&P SmallCap 600 Index over a three-year performance period for a portion of the PSUs. A portion of the PSUs granted in 2025 are separately subject to the achievement of a performance-based return on invested capital (“ROIC”). PSUs typically vest at the end of a three-year period and upon achievement of the performance target.
The fair value of market-based PSUs based on relative TSR was estimated using a Monte Carlo simulation model. For PSUs issued during the years ended December 31, 2025, 2024 and 2023, the calculation of the fair value of these awards was calculated using the following assumptions:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Expected volatility | 45.2% | 45.9% - 47.6% | 63.4% | ||||||||||||||
| Risk-free interest rate % | 4.3% | 3.9% - 4.3% | 4.2% | ||||||||||||||
| Expected term (in years) | 2.88 | 2.39 - 2.90 | 2.88 | ||||||||||||||
Dividend yield (1) | —% | —% | —% | ||||||||||||||
(1) We have never declared or paid any cash dividends on our common stock and we currently do not intend to pay cash dividends on our common stock.
The following table summarizes activity related to the Stock Incentive Plan for employees and non-employee directors:
PSUs (1) | RSUs | ||||||||||||||||||||||
(in thousands except for per share amounts) | Number of Performance Stock Units | Weighted Average Grant Date Fair Value Per Share | Number of Restricted Stock Units | Weighted Average Grant Date Fair Value Per Share | |||||||||||||||||||
| Non-vested as of January 1, 2025 | 1,680 | $ | 31.33 | 5,749 | $ | 19.65 | |||||||||||||||||
| Granted | 237 | 25.56 | 2,263 | 22.25 | |||||||||||||||||||
| Vested | (341) | 36.11 | (2,704) | 19.97 | |||||||||||||||||||
| Forfeited | (311) | 33.12 | (537) | 19.24 | |||||||||||||||||||
| Non-vested as of December 31, 2025 | 1,265 | $ | 28.51 | 4,771 | $ | 20.75 | |||||||||||||||||
(1) Includes PSUs at target payout. Final common shares issued may be different based upon the actual achievement versus the performance measure target.
Weighted average grant date fair value per share of awards granted during the years ended December 31, 2024 and 2023 was $27.94 and $29.89, respectively, for PSUs and $19.59 and $18.79, respectively, for RSUs.
As of December 31, 2025, unrecognized compensation cost related to unvested awards granted to employees and non-employee directors under the Stock Incentive Plan is as follows:
| (in millions) | Unrecognized Compensation Cost | Weighted-Average Period | |||||||||
| RSUs | $ | 61 | 1 year, 8 months | ||||||||
| PSUs | 10 | 11 months | |||||||||
| Total unrecognized compensation cost | $ | 71 | |||||||||
The fair value of shares vested follows:
| Years Ended December 31, | |||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| RSUs | $ | 67 | $ | 47 | $ | 29 | |||||||||||
| PSUs | 7 | — | 14 | ||||||||||||||
| Total | $ | 74 | $ | 47 | $ | 43 | |||||||||||
Stock Options
Stock option awards entitle the holder to purchase shares of our common stock at a specific price when the options vest. Stock options typically vest over 3 years from the date of grant and expire 7 years from the grant date. There were no stock options granted to employees during the twelve months ended December 31, 2025, 2024, or 2023.
The following table summarizes stock option activity related to the Stock Incentive Plan:
| Stock Options | |||||||||||||||||||||||
| Number of Stock Options (in thousands) | Weighted Average Exercise Price | Weighted Average Contractual Life | Aggregate Intrinsic Value (1) (in millions) | ||||||||||||||||||||
| Stock Options outstanding as of January 1, 2025 | 1,006 | $ | 14.34 | 2.3 years | $ | 9 | |||||||||||||||||
| Expired | (28) | 24.39 | |||||||||||||||||||||
| Exercised | (608) | 17.15 | |||||||||||||||||||||
| Stock Options outstanding and exercisable as of December 31, 2025 | 370 | $ | 8.97 | 1.4 years | $ | 10 | |||||||||||||||||
(1) Represents the total intrinsic value (the difference between the fair market value of our common stock as of January 1, 2025 and December 31, 2025, respectively, and the exercise price, multiplied by the number of in-the-money service-based common stock options) that would have been received by the option holders had all option holders exercised their options on January 1, 2025 and December 31, 2025, respectively. This amount is subject to change based on changes to the fair market value of our common stock.
For the year ended December 31, 2025, there was no unrecognized compensation cost related to stock options as all stock option awards were fully vested. Cash received from stock options exercised during the year ended December 31, 2025 was $7 million, while amounts received in 2024 and 2023 were not material.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 14, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 15, 2022 | |
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.