Construction Partners, Inc.ROAD
Construction Partners, Inc. Stock Compensation Disclosure
Share-Based Compensation
The Equity Incentive Plan was initially approved by the Company’s stockholders in 2016, was amended and restated in April 2018, and was further amended in May 2019 and January 2025. In connection with the 2018 amendment and restatement, the Company reserved 2,000,000 shares of Class A common stock for issuance pursuant to awards granted thereunder. In March 2024, the Company’s stockholders approved an increase in such share reserve by an additional 1,000,000 shares. At September 30, 2025, there were 901,350 shares of Class A common stock remaining available for issuance under the Equity Incentive Plan.
The Restricted Stock Plan was approved by the Company’s stockholders and adopted by the Company in March 2024 and was amended in January 2025. At that time, the Company reserved 2,000,000 shares of Class B common stock for issuance pursuant to awards granted thereunder. At September 30, 2025, there were 1,891,000 shares of Class B common stock remaining available for issuance under the Restricted Stock Plan.
The following table summarizes the components of share-based compensation expense in the Consolidated Statements of Comprehensive Income during the fiscal years ended September 30, 2025, 2024 and 2023 (in thousands):
| For the Fiscal Year Ended September 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Equity classified awards | $ | 26,868 | $ | 10,735 | $ | 10,759 | |||||||||||
| Liability classified awards | 10,137 | 3,677 | — | ||||||||||||||
| Employee stock purchase plan | 1,583 | 619 | — | ||||||||||||||
| Total share-based compensation expense | $ | 38,588 | $ | 15,031 | $ | 10,759 | |||||||||||
Restricted Stock - Equity Classified Awards
The Company measures and recognizes share-based compensation expense, net of forfeitures, over the requisite vesting periods for all share-based payment awards made, and recognizes forfeitures as they occur. Share-based compensation is included in general and administrative expenses in the Consolidated Statements of Comprehensive Income. A summary of the changes in the Company’s restricted stock is as follows (in thousands, except share data):
| For the Fiscal Year Ended September 30, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Shares | Weighted Average Grant Date Fair Value Per Share | Shares | Weighted Average Grant Date Fair Value Per Share | Shares | Weighted Average Grant Date Fair Value Per Share | |||||||||||||||||||||
| Unvested shares, beginning balance | 509,171 | 31.59 | 824,280 | 28.41 | 715,724 | 29.34 | ||||||||||||||||||||
| Shares awarded | 381,995 | 78.61 | 110,113 | 45.70 | 210,412 | 26.21 | ||||||||||||||||||||
| Shares vested | (391,077) | 30.12 | (421,873) | 29.05 | (76,963) | 31.01 | ||||||||||||||||||||
| Shares forfeited | (21,478) | 30.60 | (3,349) | 32.11 | (24,893) | 28.36 | ||||||||||||||||||||
| Unvested shares, ending balance | 478,611 | 70.36 | 509,171 | 31.59 | 824,280 | 28.41 | ||||||||||||||||||||
| Aggregate grant date fair value of awards | $ | 30,027 | $ | 5,032 | $ | 5,514 | ||||||||||||||||||||
| Compensation expense recorded upon vesting of awards | 11,538 | 8,416 | 8,717 | |||||||||||||||||||||||
| Unrecognized compensation expense at fiscal year-end | 24,464 | 6,331 | 9,766 | |||||||||||||||||||||||
| Weighted average recognition period remaining, in years | 4.1 | 2.5 | 2.5 | |||||||||||||||||||||||
The restricted shares granted under the Equity Incentive Plan will vest, as applicable, as follows:
| Fiscal Year | Number of Shares | |||||||
| 2026 | 81,389 | |||||||
| 2027 | 66,722 | |||||||
| 2028 | 149,134 | |||||||
| 2029 | 151,366 | |||||||
| 2030 | 30,000 | |||||||
| Total | 478,611 | |||||||
Market-Based Restricted Stock Awards - Equity Classified Awards
During fiscal year ended September 30, 2025, the Company issued and awarded market-based restricted stock awards representing a target of 79,000 Class A shares and 61,000 Class B shares to certain members of Company management, directors and employees under the Equity Incentive Plan and the Restricted Stock Plan, respectively, as transaction bonuses in connection with the Lone Star Acquisition. The awards were issued upon the execution of the definitive agreement for the Lone Star Acquisition in October 2024 and vested upon the later to occur of (i) the closing of the Lone Star Acquisition and (ii) the achievement of certain market-based criteria. Such awards vested on November 6, 2024. These grants are classified as equity awards. The aggregate grant date fair value of these restricted stock awards was $9.8 million. During the fiscal year ended September 30, 2025 and 2024, the Company recorded compensation expense in connection with the market-based restricted stock awards in the amount of $9.8 million and $0.0 million, respectively, which is recorded in acquisition-related expenses in the Company’s Consolidated Statements of Comprehensive Income.
Performance Stock Units - Equity Classified Awards
PSUs provide for the issuance of shares of Class A common stock upon vesting, which occurs at the end of the performance period based on achievement of certain Company performance metrics established by the Compensation Committee of the Company’s Board of Directors. The final number of shares of common stock issuable upon vesting of PSUs can range from 0% to 150% of the number of PSUs initially granted, depending on the level of achievement, as determined by the Compensation Committee of the Company’s Board of Directors. The achievement of performance goals is modified by the total stockholder return ranking of the Company against the Russell 2000 Index over the performance period and can increase or decrease the achieved award by up to 15%. The Company recognizes expense, net of estimated forfeitures, for PSUs based on the forecasted achievement of Company performance metrics, multiplied by the fair value of the total number of shares of common stock that the Company anticipates will be issued based on such achievement.
During the fiscal year ended September 30, 2025, the Company awarded PSUs representing a target of 73,603 shares and forecasted vesting of 55,202 shares of Class A common stock to certain members of Company management under the Equity Incentive Plan. The grants are classified as equity awards. The aggregate grant date fair value of these PSU awards was $4.1 million. During the fiscal years ended September 30, 2025 and 2024, the Company recorded compensation expense in connection with PSUs in the amount of $5.7 million and $2.3 million, respectively, which is reflected as general and administrative expenses in the Company’s Consolidated Statements of Comprehensive Income. At September 30, 2025, the Company forecasted 133,182 shares of Class A common stock underlying PSUs as unvested and approximately $4.5 million of unrecognized compensation expense related to PSU awards, which will be recognized over a remaining weighted-average period of 1.8 years. During the fiscal year ended September 30, 2025, 57,912 shares of Class A common stock underlying PSUs were vested and issued.
Cash-Settled Restricted Stock Units - Liability Classified Awards
During the fiscal year ended September 30, 2025, the Company granted 80,614 of cash-settled restricted stock units (“RSUs”) to employees of the Company under the Equity Incentive Plan, of which 532 shares were forfeited by employees. The Company elects to account for forfeitures as they occur. The aggregate grant date fair value of these awards was $7.1 million and the fair value at September 30, 2025 was $10.2 million. Compensation expense associated with these awards for the fiscal years ended September 30, 2025, 2024 and 2023 was $10.1 million, $3.7 million and $0.0 million, respectively, which is reflected as general and administrative expenses in the Consolidated Statements of Comprehensive Income. As of September 30, 2025 and September 30, 2024, the liability for cash-settled RSUs was $11.9 million and $3.7 million, respectively, and is included in accrued expenses and other current liabilities and other long-term liabilities. At September 30, 2025, there was approximately $8.5 million of unrecognized compensation expense related to these awards, which will be recognized over a remaining weighted-average period of 2 years.
The grant date fair value of cash-settled RSU awards is based on the price of the Company’s Class A common stock and the number of RSUs awarded on the date of grant. The awards must be settled in cash and are accounted for as liability-type awards. The expense is recognized over the requisite service period with remeasurement at the end of each reporting period at fair value until settlement. The requisite service period is based on the vesting provisions of the awards, which generally occurs in four equal annual installments beginning on the date of the first fiscal year-end after the grant date.
Employee Stock Purchase Plan
The Construction Partners, Inc. Employee Stock Purchase Plan (“ESPP”) became effective on May 13, 2021. The ESPP is intended to provide eligible employees of the Company an opportunity to purchase shares of the Company’s Class A common stock at a discounted rate using funds withheld through payroll deductions. The total number of shares offered under the ESPP is 1,000,000. The first offering period under the ESPP commenced on July 1, 2023. Since that date, employees have purchased 97,574 shares under the ESPP. Employer expense associated with the ESPP for the fiscal years ended September 30, 2025, 2024 and 2023 was $1.6 million, $0.6 million, and $0.0 million, respectively, and is included in general and administrative expenses in the Consolidated Statements of Comprehensive Income.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 25, 2025 | Showing above |
| 2024 | Nov 25, 2024 | |
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.