REPUBLIC AIRWAYS HOLDINGS INC.RJET
REPUBLIC AIRWAYS HOLDINGS INC. Stock Compensation Disclosure
MEZZANINE EQUITY AND CAPITAL TRANSACTIONS
Common stock and RSUs of Legacy Republic have been retroactively restated to give effect to the Exchange Ratio set forth in the Merger Agreement. See Note 3, Merger with Mesa Air Group, Inc.
Stock Compensation
During the year ended December 31, 2020, the Company adopted the 2020 Omnibus Incentive Plan and issued RSUs to the Company’s Board of Directors. RSUs vested immediately with a contractual sale restriction until the earlier of the Merger closing or termination of the participant’s service to the Company’s Board of Directors. In the event a market did not exist for the RSUs, the agreement provided for certain put rights for the RSUs to be put to the Company at fair market value. The put rights required these RSUs to be classified in mezzanine equity. The amount presented in mezzanine equity in the consolidated balance sheet as of December 31, 2024 is based on the accumulated expense of the RSUs in accordance with ASC 718, Compensation—Stock Compensation. The Company issued 57,047 RSUs under the 2020 Omnibus Incentive Plan during the year ended December 31, 2025, at an estimated grant date fair value of $15.39 per share. No RSUs were issued during the year ended December 31, 2024.
Additionally, since 2020, the Company issued 482,542 RSUs to certain members of management of the Company (“Value and Performance RSUs”). The Value and Performance RSUs included a market condition that could decrease the number of units to be issued if the fair market value of the Company did not increase over 30% by December 31, 2025. The Value and Performance RSUs also included a performance condition multiplier up to 300% of the units issued based on the occurrence of a liquidity event as determined by the Company’s Board of Directors and an increase in the fair market value of the Company as of a liquidity event date. The performance condition was not probable to occur as December 31, 2024, and therefore no expense was recognized related to the performance condition during the year then ended.
Prior to closing of the Merger, the Value and Performance RSU agreements provided certain put rights for the units to be put to the Company at fair market value. Such provisions required that these Value and Performance RSUs were classified in mezzanine equity. The Company recorded share based compensation for these awards at the grant date fair value of $7.50 per share, which was determined using a Monte Carlo simulation model considering the market condition but not including the performance condition as it was not probable until closing of the Merger. The Value and Performance RSUs became fully vested on November 25, 2025 concurrent with closing of the Merger, which was a liquidity event as defined in the performance vesting conditions of the Value and Performance RSU awards. Upon closing, the remaining outstanding Value and Performance RSUs vested resulting in the issuance of 284,700 additional shares in satisfaction of
the performance vesting condition. Amounts were reclassified from mezzanine equity to common stock and additional paid-in capital upon closing of the Merger as the Value and Performance RSUs were settled for common stock.
The Company recorded cumulative share based compensation expense related to the Value and Performance RSUs with performance-based vesting conditions during the year ended December 31, 2025, as well as the acceleration of the vesting of the award. The Company recorded $2.1 million and $0.8 million of share based compensation to executive separation and Merger-related items and wages and benefits expense in the consolidated statements of operations, respectively, related to these Value and Performance RSUs during the year ended December 31, 2025, including satisfaction of performance conditions. There is no unrecognized remaining compensation cost related to the Value and Performance RSUs as of December 31, 2025.
In addition, during the year ended December 31, 2025, the Company granted 191,769 RSUs (“Time Based Restricted Stock Awards”) to certain key members of management of the Company. The Time Based Restricted Stock Awards include a vesting condition and vest ratably each year over a three-year vesting period. The estimated grant date fair value of each Time Based Restricted Stock Award was $15.39 per share. During the year ended December 31, 2025, the Company recorded $1.1 million in share based compensation to wages and benefits expense in the consolidated statements of operations. As of December 31, 2025, the total unrecognized compensation cost related to these non-vested shares that the Company expects to recognize over a weighted average of approximately one year is $0.7 million. The Company accounts for forfeitures as they occur.
Also, during the year ended December 31, 2025, the Company granted 1,147,456 RSUs to certain key members of management, which are subject to both time- and performance-based vesting conditions (the “Republic Integration Awards”). The Republic Integration Awards and the Time Based Restricted Stock Awards, each, were unvested RSUs in Legacy Republic, which were automatically assumed and converted into the right to receive a restricted share award in respect of common stock of the Company.
The Republic Integration Awards subject to time-vesting conditions and vest in equal installments on the third and fourth anniversaries of closing of the Merger, subject to continued employment of the RSU holder. The Republic Integration Awards subject to performance-vesting conditions vest in one-third tranches upon achievement of specified operational milestones. During the year ended December 31, 2025, the Company recorded $5.1 million in share based compensation to wages and benefits expense in the consolidated statements of operations. As of December 31, 2025, the total unrecognized compensation cost related to these non-vested shares that the Company expects to recognize over a weighted average of approximately two years is $12.6 million.
In connection with Mr. Bedford’s retirement from the Company, effective July 1, 2025, 367,512 RSUs held by Mr. Bedford, previously classified as mezzanine equity, were modified, and an additional 284,963 RSUs were granted. All RSUs were considered earned and vested immediately. The recognition of Mr. Bedford’s awards resulted in $9.8 million of additional compensation expense during the year ended December 31, 2025 which was recorded to executive separation and Merger-related items in the consolidated statements of operations.
The following table summarizes the activity of RSUs granted to certain employees of the Company for the years ended December 31, 2025, 2024, and 2023:
Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||
| Unvested at December 31, 2022 | 826,658 | $ | 7.50 | |||||||||||
Forfeited | (36,069) | 7.50 | ||||||||||||
| Unvested at December 31, 2023 | 790,589 | 7.50 | ||||||||||||
| Unvested at December 31, 2024 | 790,589 | 7.50 | ||||||||||||
Granted | 1,908,888 | 14.21 | ||||||||||||
| Vested | (1,091,119) | 9.84 | ||||||||||||
| Modified and Vested | (367,512) | 9.11 | ||||||||||||
Forfeited | (15,597) | 7.50 | ||||||||||||
Unvested at December 31, 2025 | 1,225,249 | 15.39 | ||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | May 14, 2025 | |
| 2023 | Jan 26, 2024 | |
| 2022 | Dec 29, 2022 | |
| 2021 | Dec 10, 2021 | |
| 2020 | Dec 14, 2020 | |
| 2019 | Dec 17, 2019 | |
| 2018 | Dec 20, 2018 | |
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.