RAYONIER ADVANCED MATERIALS INC.RYAM
RAYONIER ADVANCED MATERIALS INC. Stock Compensation Disclosure
18. Incentive Stock Plans
As of December 31, 2025, the Company has had four stock-based incentive plans. The Prior Incentive Stock Plans provided for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, performance stock, restricted stock and restricted stock units, subject to certain limitations. The Company no longer issues shares under the Prior Incentive Stock Plans. The 2023 Plan, as amended and restated in the second quarter of 2025, provides for up to 6.3 million shares to be granted for stock options, non-qualified stock options, stock appreciation rights, performance shares, restricted stock and restricted stock units. Under the 2023 Plan, shares available for issuance may be increased by any shares of common stock subject to awards under the Prior Incentive Stock Plans that, in whole or in part, are forfeited, terminated or expire unexercised, settled in cash in lieu of stock, or released from a reserve for failure to meet the maximum payout under a program. At December 31, 2025, approximately 4.0 million shares were available for future grants under the 2023 Plan.
The Company recognizes stock-based compensation expense on a straight-line basis, net of forfeitures, over the service period of the award. The Company does not estimate a forfeiture rate for non-vested shares. Forfeitures are recognized and reduce stock-based compensation expense during the period in which they occur. Incentive stock plan compensation expense was as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Incentive stock plan compensation expense(a) | $ | 6,345 | $ | 10,915 | $ | 5,754 | |||||||||||
(a)Included equity award expense of $5 million during the year ended December 31, 2025 and $7 million during each of the years ended December 31, 2024 and 2023.
Non-Qualified Employee Stock Option Awards
Stock option awards included RYAM awards held by employees of its former parent Rayonier Inc. Stock options are granted with an exercise price equal to the market value of the underlying stock on the grant date. They generally vest ratably over three years and have a maximum term of 10 years and two days from the grant date. Incentive stock plan compensation expense for stock option awards is recognized over the shorter of: (1) the service period (i.e., the stated period of time required to earn the award) or (2) the period beginning at the start of the service period and ending when an employee first becomes eligible for retirement. The fair value of each option grant is estimated on the grant date using the Black-Scholes option-pricing model. The Company elected to value each grant in total and recognize the expense for stock options on a straight-line basis over three years.
The Company had 46,798 options outstanding at December 31, 2023, all of which expired in January 2024. The fair value of options vested in 2024 and 2023 was zero. No options were granted or exercised during the years ended December 31, 2025, 2024 and 2023.
Restricted Stock and Stock Unit Awards
Restricted stock and stock units granted in connection with the Company’s performance share plan generally vest upon completion of periods ranging from one year to three years. The 2025 restricted stock unit awards cliff vest after three years, except for director awards, which vest after one year. The fair value of each share granted is equal to the share price of the underlying stock on the date of grant.
The following table summarizes the details of the restricted stock and stock units granted to employees:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Restricted stock and stock units granted (not in thousands) | 544,718 | 633,603 | 992,830 | ||||||||||||||
| Weighted average price of restricted stock or stock units granted (not in thousands) | $ | 7.51 | $ | 4.11 | $ | 5.27 | |||||||||||
| Intrinsic value of restricted stock and stock units outstanding | $ | 8,201 | $ | 14,571 | $ | 7,641 | |||||||||||
| Fair value of restricted stock and stock units vested | $ | 4,066 | $ | 4,435 | $ | 4,264 | |||||||||||
The following table summarizes the 2025 restricted stock and stock units activity:
| (not in thousands) | Restricted Stock and Stock Unit Awards | Weighted Average Grant Date Fair Value | |||||||||
Outstanding at December 31, 2024 | 1,766,219 | $ | 5.11 | ||||||||
| Granted | 544,718 | $ | 7.51 | ||||||||
| Forfeited | (116,547) | $ | 4.98 | ||||||||
| Vested | (801,990) | $ | 5.07 | ||||||||
Outstanding at December 31, 2025 | 1,392,400 | $ | 6.08 | ||||||||
As of December 31, 2025, there was $3 million of unrecognized compensation cost related to the Company’s outstanding restricted stock that is expected to be recognized over a weighted average period of 1.7 years.
Performance-Based Stock Unit and Cash Awards
The Company’s performance-based awards generally vest upon completion of a three-year period. The performance-based stock unit award payout is calculated using a combination of Company-specific performance metrics and TSR, which is measured on an absolute basis as well as relative to a peer group of companies. Performance-based cash awards are measured using the same objectives as the performance-based stock unit awards but are classified as a liability and remeasured to fair value at the end of each reporting period until settlement.
The 2023, 2024 and 2025 performance-based awards cliff vest after three years and are based equally on three-year cumulative adjusted EBITDA and TSR relative to peers. Participants can earn between 0 percent and 200 percent of the target award for each of the TSR and adjusted EBITDA metrics. Performance below the threshold for either metric would result in zero payout for that metric.
The performance-based awards that are measured against a market condition or incorporate market conditions are valued using a Monte Carlo simulation model. The model generates the fair value of the market-based portion of the award at the grant date. The related expense is then amortized over the award’s vesting period.
Expected volatility is based on representative price returns using the stock price of several peer companies. The risk-free rate was based on the 3-year U.S. treasury rate on the date of the award. The following table presents weighted average assumptions used in calculating the fair value of the awards granted:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Expected volatility | 57.5 | % | 75.7 | % | 77.6 | % | |||||||||||
| Risk-free rate | 3.4 | % | 4.2 | % | 4.1 | % | |||||||||||
The following table summarizes the details of the performance-based stock units awarded to employees:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Common shares of stock reserved for performance-based stock units (not in thousands) | 1,054,188 | 1,164,884 | 611,528 | ||||||||||||||
| Weighted average fair value of performance-based stock units granted (not in thousands) | $ | 9.55 | $ | 4.80 | $ | 9.09 | |||||||||||
| Intrinsic value of outstanding performance-based stock units | $ | 7,672 | $ | 12,996 | $ | 5,551 | |||||||||||
The following table summarizes the 2025 performance-based stock unit award activity:
| (not in thousands) | Performance-Based Stock Unit Awards | Weighted Average Grant Date Fair Value | |||||||||
Outstanding at December 31, 2024 | 1,575,297 | $ | 5.93 | ||||||||
| Granted | 692,155 | $ | 9.55 | ||||||||
| Forfeited | (309,915) | $ | 3.54 | ||||||||
| Vested | (654,995) | $ | 7.17 | ||||||||
Outstanding at December 31, 2025 | 1,302,542 | $ | 7.80 | ||||||||
In March 2025, the performance-based awards granted in 2022 were settled with an issuance of 654,995 shares of common stock for the stock unit awards, including incremental shares of 165,061, and cash of $2 million for the cash awards.
In March 2024, the performance-based awards granted in 2021 vested without meeting the performance thresholds, resulting in no stock units or cash being awarded.
In March 2023, the performance-based stock units granted in 2020 were settled with the issuance of 1,257,015 shares of common stock, including incremental shares of 370,366, based on performance results.
As of December 31, 2025, there was $3 million of unrecognized compensation cost related to the Company’s performance-based stock unit awards that is expected to be recognized over a weighted average period of 2.0 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 6, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
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.