REPUBLIC SERVICES, INC.RSG
REPUBLIC SERVICES, INC. Stock Compensation Disclosure
EMPLOYEE BENEFIT PLANS
Stock-Based Compensation
In October 2020, our Board of Directors amended and restated the Republic Services, Inc. Executive Incentive Plan (the 2021 Plan) to remove references to the performance-based compensation exception that was previously permitted but is no longer applicable under Section 162(m) of the Internal Revenue Code. The purposes of the 2021 Plan are to promote the success of the Company; to provide designated Executive Officers with an opportunity to receive incentive compensation dependent upon that success; and to attract, retain and motivate such individuals. We currently have approximately 10 million shares of common stock reserved for future grants under the 2021 Plan.
In February 2007, our Board of Directors approved the 2007 Stock Incentive Plan (the 2007 Plan); in May 2007 our shareholders approved the 2007 Plan. In March 2011, our Board of Directors approved the Amended and Restated 2007 Stock Incentive Plan (the Amended and Restated 2007 SIP); in May 2011 our shareholders approved the Amended and Restated 2007 SIP. In March 2013, our Board of Directors approved the Republic Services, Inc. Amended and Restated 2007 Stock Incentive Plan (the Republic Amended and Restated 2007 SIP); in May 2013 our shareholders approved the Republic Amended and Restated 2007 SIP (the 2007 Plan, the Amended and Restated 2007 SIP and the Republic Amended and Restated 2007 SIP are collectively referred to as the Amended and Restated 2007 Stock Incentive Plan). No further awards will be made under the Amended and Restated 2007 Stock Incentive Plan.
Restricted Stock Units
The following table summarizes restricted stock unit (RSU) activity for the years ended December 31, 2025, 2024 and 2023:
| Number of RSUs (in thousands) | Weighted-Average Grant Date Fair Value per Share | Weighted-Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in millions) | ||||||||||||||||||||
Unissued as of December 31, 2022 | 914 | $ | 85.43 | ||||||||||||||||||||
| Granted | 250 | $ | 133.03 | ||||||||||||||||||||
| Vested and issued | (208) | $ | 95.24 | ||||||||||||||||||||
| Forfeited | (41) | $ | 117.54 | ||||||||||||||||||||
Unissued as of December 31, 2023 | 915 | $ | 93.35 | ||||||||||||||||||||
| Granted | 184 | $ | 184.28 | ||||||||||||||||||||
| Vested and issued | (228) | $ | 102.81 | ||||||||||||||||||||
| Forfeited | (30) | $ | 139.24 | ||||||||||||||||||||
Unissued as of December 31, 2024 | 841 | $ | 107.81 | ||||||||||||||||||||
| Granted | 153 | $ | 221.18 | ||||||||||||||||||||
| Vested and issued | (206) | $ | 119.81 | ||||||||||||||||||||
| Forfeited | (21) | $ | 177.62 | ||||||||||||||||||||
Unissued as of December 31, 2025 | 767 | $ | 125.39 | 1.1 | $ | 162.62 | |||||||||||||||||
Vested and unissued as of December 31, 2025 | 410 | $ | 76.87 | ||||||||||||||||||||
During the years ended December 31, 2025, 2024 and 2023, we awarded our non-employee directors 13,800, 16,540 and 20,324 RSUs, respectively, which vested upon issuance.
During the years ended December 31, 2025, 2024 and 2023, we awarded 132,585, 158,789 and 216,610 RSUs, respectively, to executives and employees that vest in four equal annual installments beginning on the anniversary date of the original grant.
During the years ended December 31, 2025, 2024 and 2023, we granted an additional 6,980, 8,868 and 12,751 RSUs, respectively, as dividend equivalents.
The RSUs do not carry any voting or dividend rights, except the right to receive additional RSUs in lieu of dividends.
Compensation Expense
The fair value of RSUs is based on the closing market price on the date of the grant. The compensation expense related to RSUs is amortized ratably over the vesting period, or to the employee's retirement eligible date, if earlier.
During the years ended December 31, 2025, 2024 and 2023, compensation expense related to RSUs totaled $26 million, $25 million and $24 million, respectively. As of December 31, 2025, total unrecognized compensation expense related to outstanding RSUs was $43 million, which will be recognized over a weighted average period of approximately 2.5 years.
Performance Shares
The following table summarizes performance stock unit (PSU) activity for the years ended December 31, 2025, 2024 and 2023:
| Number of PSUs (in thousands) | Weighted Average Grant Date Fair Value per Share | ||||||||||
Outstanding as of December 31, 2022 | 756 | $ | 95.19 | ||||||||
| Granted | 200 | $ | 138.03 | ||||||||
| Vested and issued | (227) | $ | 100.06 | ||||||||
| Forfeited | (41) | $ | 123.30 | ||||||||
Outstanding as of December 31, 2023 | 688 | $ | 101.48 | ||||||||
| Granted | 281 | $ | 142.50 | ||||||||
| Vested and issued | (420) | $ | 90.54 | ||||||||
| Forfeited | (25) | $ | 136.27 | ||||||||
Outstanding as of December 31, 2024 | 524 | $ | 125.70 | ||||||||
| Granted | 222 | $ | 199.58 | ||||||||
| Vested and issued | (209) | $ | 117.01 | ||||||||
| Forfeited | (6) | $ | 176.82 | ||||||||
Outstanding and Exercisable as of December 31, 2025 | 531 | $ | 159.77 | ||||||||
During the years ended December 31, 2025, 2024 and 2023, we awarded 117,968, 153,883 and 80,452 PSUs to our executive officers, respectively. These awards are performance-based as the number of shares ultimately earned depends on performance against pre-determined targets for return on invested capital (ROIC), cash flow value creation (CFVC) and total shareholder return relative to the S&P 500 index (RTSR). The PSUs are payable 50% in shares of common stock and 50% in cash after the end of a three-year performance period, when our financial performance for the entire performance period is reported, typically in February of the succeeding year. At the end of the performance period, the number of PSUs awarded can range from 0% to 220% of the targeted amount, depending on the performance against the pre-determined targets.
During the years ended December 31, 2025, 2024 and 2023, we awarded 98,613, 120,433 and 108,560 PSUs to our employees other than our executive officers, respectively. The PSUs are payable 100% in shares of common stock after the end of a three-year performance period, when our financial performance for the entire performance period is reported, typically in February of the succeeding year. At the end of the performance period, the number of PSUs awarded can range from 0% to 220% of the targeted amount, depending on the performance against the pre-determined targets.
The PSUs do not carry any voting or dividend rights, except the right to accumulate additional PSUs in lieu of dividends.
During the years ended December 31, 2025, 2024 and 2023, we granted an additional 5,666, 6,795 and 10,511 PSUs to our executive officers, respectively, as dividend equivalents.
Compensation Expense
For the stock-settled portion of the award that vests based on future ROIC and CFVC performance, compensation expense is measured using the fair value of our common stock at the grant date. For the cash-settled portion of the award that vests based on future ROIC and CFVC performance, compensation expense is recorded based on the fair value of our common stock at the end of each reporting period. Compensation expense is recognized ratably over the performance period based on our estimated achievement of the established performance criteria. Compensation expense is only recognized for the portion of the award that we expect to vest, which we estimate based on an assessment of the probability that the performance criteria will be achieved.
For the stock-settled portion of the award that vests based on RTSR, the grant date fair value is based on a Monte Carlo valuation and compensation expense is recognized on a straight-line basis over the vesting period. For the cash-settled portion of the award that vests based on RTSR, compensation expense also incorporates the fair value of our PSUs at the end of each reporting period. Compensation expense is recognized for the RTSR portion of the award whether or not the market conditions are achieved.
During the years ended December 31, 2025, 2024 and 2023, compensation expense related to PSUs totaled $27 million, $30 million and $29 million, respectively. As of December 31, 2025, total unrecognized compensation expense related to outstanding PSUs was $30 million, which will be recognized over a weighted average period of approximately 1.7 years.
Collective Bargaining Agreements
As of December 31, 2025, approximately 22% of our workforce was covered by collective bargaining agreements (CBAs), and approximately 8% of our workforce was covered by CBAs that will expire during 2026.
Multiemployer Pension Plans
We participate in multiemployer pension plans that generally provide retirement benefits to participants of contributing employers. We do not administer these plans. In general, these plans are managed by a board of trustees with the unions appointing certain trustees and other contributing employers of the plan appointing certain members. We generally are not represented on the board of trustees.
Based on the information available to us, we believe that some of the multiemployer plans to which we contribute are either critical or endangered as those terms are defined in the Pension Protection Act (PPA). The PPA requires underfunded pension plans to improve their funding ratios within prescribed intervals based on the level of their underfunding. Until the plan trustees develop the funding improvement plans or rehabilitation plans as required by the PPA, we cannot determine the amount of any additional contribution or other financial obligations that we may be subject to, if any. Accordingly, we cannot presently determine the effect that the PPA may have on our consolidated financial position, results of operations or cash flows.
Furthermore, under current law regarding multiemployer benefit plans, a plan’s termination, our voluntary withdrawal (which we consider from time to time), or the mass withdrawal from any under-funded multiemployer pension plan would require us to make payments to the plan for our proportionate share of the multiemployer plan’s unfunded vested liabilities. During the course of operating our business, we may incur withdrawal events regarding certain of the multiemployer pension plans in which we participate. We accrue for such events when losses become probable and reasonably estimable.
Republic’s participation in individually significant multiemployer pension plans for the year ended December 31, 2025 is outlined in the table below. Only with respect to multiemployer pension plans, we considered contributions in excess of $10 million in any period disclosed to be individually significant. The most recent PPA zone status available in 2025 and 2024 is for the plans’ year ended September 30, or December 31, 2024 and 2023, respectively. The status is based on information that Republic received from the plans and is certified by the plans’ actuary. Among other factors, plans in the critical red zone are generally less than 65% funded, plans in the endangered yellow zone are less than 80% funded and plans in the safe green zone are at least 80% funded. Plans in the critical and declining zone are classified as critical and projected to be insolvent in the current year or any of the 14 following plan years. The last column lists the expiration dates of the CBAs to which the plans are subject.
| Pension Protection Act Zone Status | Funding Improvement or Rehabilitation Plan Status Pending / | Republic Contributions to Plan | Surcharge | Expiration Dates | |||||||||||||||||||||||||||||||||||||||||||||||||
| Legal Plan Name | EIN | 2025 | 2024 | Implemented | 2025 | 2024 | 2023 | Imposed | of CBAs | ||||||||||||||||||||||||||||||||||||||||||||
| Western Conference of Teamsters Pension Plan | 91-6145047 | Safe | Safe | No | $ | 83 | $ | 75 | $ | 70 | No | Various dates through 9/30/2030 | |||||||||||||||||||||||||||||||||||||||||
| All other plans | N/A | N/A | N/A | N/A | 29 | 29 | 29 | N/A | |||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 112 | $ | 104 | $ | 99 | |||||||||||||||||||||||||||||||||||||||||||||||
Defined Contribution Plan
We maintain the Republic Services 401(k) Plan (the 401(k) Plan), which is a defined contribution plan covering all eligible employees. Under the 401(k) Plan, participants may direct us to defer a portion of their compensation to the 401(k) Plan, subject to Internal Revenue Code limitations. We provide for an employer matching contribution equal to 100% of the first 3% of eligible compensation and 50% of the next 2% of eligible compensation contributed by each employee, which is funded in cash. All contributions vest immediately.
Total expense recorded for matching 401(k) contributions in 2025, 2024 and 2023 was $98 million, $95 million and $82 million, respectively.
Deferred Compensation Plan
We provide eligible Republic employees, officers and directors with the opportunity to voluntarily defer base salary, bonus payments, long-term incentive awards and other compensation, as applicable, on a pre-tax basis through the Republic Services, Inc. Deferred Compensation Plan (the DCP). The DCP is a nonqualified deferred compensation plan that conforms to Section 409A of the Internal Revenue Code. Eligible participants can defer up to 80% of base salary and up to 100% of bonus,
long-term compensation and directors’ fees. Under the DCP, some participants also are eligible for matching contributions. The matching contribution under the DCP is equal to the lesser of 2% of the participant’s compensation over established 401(k) limits or 50% of the amount the participant has deferred. The DCP participants have no ownership or security interest in any of the amounts deferred or the measurement funds under the DCP. The right of each participant in the DCP is solely that of a general, unsecured creditor of Republic with respect to his or her own interest under the DCP. Deferred amounts may be subject to forfeiture and are deemed invested among investment funds offered under the DCP, as directed by each participant. Payments of deferred amounts are payable following separation from service or at a date or dates elected by the participant when the deferral is elected. Payments of deferred amounts are made in either a lump sum or in annual installments over a period not exceeding 15 years.
Republic invested in corporate-owned life insurance policies to satisfy future obligations under the DCP. These corporate-owned life insurance policies are held in a Rabbi Trust and are recorded at the amount that can be realized under insurance contracts at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The aggregate cash surrender value of these life insurance policies was $143 million and $125 million as of December 31, 2025 and 2024, respectively, and is classified in other assets in our consolidated balance sheets. The DCP liability was $125 million and $120 million as of December 31, 2025 and 2024, respectively, and is classified in other long-term liabilities in our consolidated balance sheets.
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.