Rocket Companies, Inc.RKT
Rocket Companies, Inc. Stock Compensation Disclosure
Share-based Compensation and Team Member Benefit Plan
RSUs, PSUs and stock options are granted to team members and directors of the Company and its affiliates under the 2020 Omnibus Incentive Plan, while the Rocket equivalent awards were issued as a result of the Acquisitions. Share-based compensation expense is recognized on a straight-line basis over the requisite service period based on the fair value of the award on the date of grant, with forfeitures recognized as they occur. Refer to Note 2, Acquisitions for further details on the impacts to share-based compensation of the Acquisitions.
Restricted Stock Units
The Company has granted RSUs to certain team members and certain non-employee directors that generally vest annually or semi-annually over a three-year period with 33% vesting on each of the first three anniversaries of the grant date, subject, in each case, to the grantee's employment or service with the Company through each applicable vesting date.
In connection with the Acquisitions, the Company assumed and converted RSUs issued to certain team members. The assumed and converted Redfin RSUs generally vest over a four-year period, with 25% vesting on the first anniversary of the grant date and quarterly thereafter. The assumed and converted Mr. Cooper RSUs generally vest over a three-year period with 33% vesting on each of the annual anniversaries of the grant date for Mr. Cooper awards subject to the grantee’s employment service with the Company through each applicable vesting date.
The RSU activity for the year ended December 31, 2025 was as follows:
| Number of Units | Weighted Average Grant Date Fair Value | Weighted Average Remaining Service Period | |||||||||||||||
Outstanding as of December 31, 2024 | 21,892,391 | $ | 12.02 | 1.8 years | |||||||||||||
| Additions | |||||||||||||||||
| Granted | 17,897,217 | 16.50 | — | ||||||||||||||
| Assumed (converted equity awards) | 27,989,555 | 17.85 | — | ||||||||||||||
| Reductions | |||||||||||||||||
| Vested | 16,136,762 | 13.06 | — | ||||||||||||||
| Forfeited | 2,987,409 | 13.06 | — | ||||||||||||||
Outstanding as of December 31, 2025 | 48,654,992 | $ | 16.60 | 1.9 years | |||||||||||||
Performance Stock Units
The Company authorized 3,805,460 and 1,055,408 PSUs at target during the years ended December 31, 2025 and 2024, respectively, that will vest based on the satisfaction of certain market, performance and service conditions. No forfeitures occurred as of December 31, 2025 and 2024.
PSUs based on a Market Condition
The Company granted 916,295 and 527,704 PSUs during the years ended December 31, 2025 and 2024, respectively, with a grant date fair value of $22.48 and $18.22, respectively, as determined based on a Monte Carlo valuation model, that will cliff vest at the end of a three-year period based on the satisfaction of certain service and market conditions.
PSUs based on a Performance Condition
The Company granted 2,889,166 PSUs during the year ended December 31, 2025, of which 1,972,871 will cliff vest at the end of a three-year period based on the satisfaction of certain service and performance conditions and 916,295 will vest at the end of a two-year period based on the satisfaction of certain service and performance conditions.
The Company granted 527,704 PSUs during the year ended December 31, 2024, that will cliff vest at the end of a three-year period based on the satisfaction of certain service and performance conditions, which will be established by the Company at a future date. The Company has determined that the service inception date precedes the grant date and the fair value of these awards will be remeasured quarterly based on the current period share price until the awards are granted. This portion of the PSUs is not considered contingently issuable and is excluded from the calculation of earnings per share as of December 31, 2025 and 2024.
Stock Options
The Company has granted Stock Options to certain team members that generally vest and become exercisable over a three year period, with 33.33% vesting on the first anniversary of the grant date and the remaining 66.67% vesting ratably on a monthly basis over the 24 month period following the first anniversary of the grant date, subject to the grantee's employment or service with the Company through each applicable vesting date. The Stock Options will be exercisable, subject to vesting, for a period of 10 years after the grant date. The Stock Options activity for the year ended December 31, 2025 was as follows:
| Number of Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding as of December 31, 2024 | 14,552,254 | $ | 17.98 | 5.5 years | $ | — | |||||||||||||||||
| Additions | |||||||||||||||||||||||
| Assumed (converted equity awards) | 1,383,657 | 15.42 | — | — | |||||||||||||||||||
| Reductions | |||||||||||||||||||||||
| Exercised | 1,677,572 | 14.33 | — | — | |||||||||||||||||||
| Expired | 993,818 | 17.93 | — | — | |||||||||||||||||||
| Forfeited | 3,435 | 11.28 | — | — | |||||||||||||||||||
Outstanding as of December 31, 2025 | 13,261,086 | $ | 18.18 | 4.4 years | $ | 19 | |||||||||||||||||
During the year ended December 31, 2025, 1,383,657 Stock Options were issued to replace the issued and outstanding Redfin stock options in connection with the Redfin Acquisition. There were no other Stock Options granted during the year ended December 31, 2025. The Company had 13,261,086, 14,552,254 and 16,837,767 stock options exercisable as of December 31, 2025, 2024 and 2023, respectively.
The Company estimates the fair value of the Stock Options at the date of grant using the Black-Scholes option pricing model. The inputs to the Black-Scholes option pricing model for the awards assumed in connection with the Redfin Acquisition are as follows:
Year Ended December 31, 2025 | Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||||||||||
| Expected volatility | 43% - 53% | N/A | N/A | ||||||||||||||
| Expected dividend yield | 0.0% | N/A | N/A | ||||||||||||||
| Risk-free interest rates | 3.8% - 4.3% | N/A | N/A | ||||||||||||||
| Expected term | 0.10 - 3.9 years | N/A | N/A | ||||||||||||||
The weighted average fair value of options assumed during 2025 was $3.53.
Expected volatility - This is a measure of the amount by which the price of the equity instrument has fluctuated or is expected to fluctuate. For the assumed options, the expected volatility was based on a combination of Rocket's historical annual volatility and the median historical annual volatility of a group of guideline companies. An increase in expected volatility would increase compensation expense.
Expected dividend yield - An increase in the expected dividend yield would decrease compensation expense.
Risk-free interest rate - This is the U.S. Treasury rate as of the measurement date having a term approximating the expected life of the award. An increase in the risk-free interest rate would increase compensation expense.
Expected term - The period of time over which the awards are expected to remain outstanding. For the assumed options, the Company generally estimates the expected term based on the mid-point between actual or expected vesting date and the contractual term. An increase in the expected term would increase compensation expense.
Team Member Stock Purchase Plan
The Company has an employee stock purchase plan, also referred to as the TMSPP, under which eligible team members may direct the Company to withhold up to 15% of their gross pay to purchase shares of common stock at a price equal to 85% of the closing market price on the exercise date. The TMSPP is a liability classified compensatory plan and the Company recognizes compensation expense over the offering period based on the fair value of the purchase discount. Under the TMSPP, the Company is authorized to issue up to 20,526,316 shares of its common stock to qualifying team members. There were 2,803,921, 2,524,819 and 3,286,442 shares purchased during the year ended December 31, 2025, 2024 and 2023, respectively, under the TMSPP.
Share-based Compensation Expense
The components of share-based compensation expense included in Salaries, commissions and team member benefits in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) are as follows:
| Year ended December 31, | |||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||
| Rocket Companies, Inc. sponsored plans | |||||||||||||||||
RSUs (1) | $ | 325 | $ | 135 | $ | 157 | |||||||||||
PSUs (2) | 15 | 5 | — | ||||||||||||||
| Stock options | — | — | 19 | ||||||||||||||
| TMSPP | 6 | 5 | 4 | ||||||||||||||
Total share-based compensation expense | $ | 346 | $ | 145 | $ | 180 | |||||||||||
(1) Unrecognized compensation expense as of December 31, 2025 related to these RSUs was $436 and is expected to be recognized over a weighted average period of 2.1 years.
(2) Unrecognized compensation expense as of December 31, 2025 related to these PSUs was $38 and is expected to be recognized over a weighted average period of 2.3 years.
Team Member Benefit Plan
The Company maintains a defined contribution 401(k) plan covering substantially all full-time and part-time team members of the Company. Team members can make elective contributions to the plan. The Company makes discretionary matching contributions of 50% of team members’ contributions to the plan generally up to an annual maximum of $2.5 thousand per team member. The Company’s contributions to the plans, net of team member forfeitures, for the years ended December 31, 2025, 2024 and 2023 amounted to $33, $25 and $27, respectively, and are included in Salaries, commissions and team member benefits in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 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.