Sabra Health Care REIT, Inc.SBRA
Sabra Health Care REIT, Inc. Stock Compensation Disclosure
STOCK-BASED COMPENSATION
All stock-based awards are subject to the terms of the 2009 Performance Incentive Plan, which was assumed by the Company effective as of November 15, 2010 in connection with the Company’s separation from Sun and was most recently amended and restated in April 2017. The 2009 Performance Incentive Plan provides for the granting of stock-based compensation, including stock options, time-based stock units, funds from operations-based stock units (“FFO Units”), relative
total stockholder return-based stock units (“TSR Units”) and performance-based restricted stock units to directors, officers and other teammates in connection with their employment with or services provided to the Company.
Restricted Stock Units and Performance-Based Restricted Stock Units
Under the 2009 Performance Incentive Plan, restricted stock units and performance-based restricted stock units generally have a contractual life or vest over a - to five-year period. The vesting of certain restricted stock units may accelerate, as defined in the grant, upon death, disability, a change in control or involuntary termination of employment in connection with a change in control, and other events. When vested (and subject to any applicable deferral or holdback period), each performance-based restricted stock unit is convertible into one share of common stock, subject to any deferrals in issuance pursuant to the grant. The restricted stock units are valued on the grant date based on the market price of the Company’s common stock on that date. Generally, the Company recognizes the fair value of the awards over the applicable vesting period as compensation expense. In addition, since the shares to be issued may vary based on the performance of the Company, the Company must make assumptions regarding the projected performance criteria and the shares that will ultimately be issued. The amount of FFO Units that will ultimately vest is dependent on the amount by which the Company’s funds from operations as adjusted (“FFO”) differs from a target FFO amount for a period specified in each grant and will range from 0% to 200% of the FFO Units initially granted. Similarly, the amount of TSR Units that will ultimately vest is dependent on the amount by which the total shareholder return (“TSR”) of the Company’s common stock differs from a predefined peer group for a period specified in each grant and will range from 0% to 200% of the TSR Units initially granted. Upon any payment of shares as a result of restricted stock unit vestings, the related tax withholding obligation will generally be satisfied by the Company, reducing the number of shares to be delivered by a number of shares necessary to satisfy the related applicable tax withholding obligation. The value of the shares withheld is dependent on the closing price of the Company’s common stock on the date the relevant transaction occurs.
The following table summarizes additional information concerning restricted stock units at December 31, 2025:
| Restricted Stock Units | Weighted Average Grant Date Fair Value Per Unit | |||||||||||||
| Unvested as of December 31, 2024 | 2,574,191 | $ | 14.94 | |||||||||||
| Granted | 983,708 | 18.76 | ||||||||||||
| Vested | (1,102,085) | 15.03 | ||||||||||||
| Dividends reinvested | 221,574 | 14.71 | ||||||||||||
| Cancelled/forfeited | (179,133) | 12.58 | ||||||||||||
| Unvested as of December 31, 2025 | 2,498,255 | $ | 16.56 | |||||||||||
As of December 31, 2025, the weighted average remaining vesting period of restricted stock units was 2.6 years. The weighted average fair value per share at the date of grant for restricted stock units for the years ended December 31, 2025, 2024 and 2023 was $18.76, $17.49 and $14.73, respectively. The total fair value of units vested during the years ended December 31, 2025, 2024 and 2023 was $16.6 million, $13.2 million and $9.1 million, respectively.
The fair value of the TSR Units is estimated on the date of grant using a Monte Carlo valuation model that uses the assumptions noted in the table below. The risk-free rate is based on the U.S. Treasury yield curve in effect at the grant date for the expected performance period. Expected volatility is based on historical volatility for the most recent 3-year period ending on the grant date for the Company and the selected peer companies, and is calculated on a daily basis. The following are the key assumptions used in this valuation:
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk free interest rate | 3.52% - 4.31% | 3.98% - 4.31% | 3.98% - 4.13% | ||||||||||||||
| Expected stock price volatility | 23.43% - 28.61% | 28.61% - 30.17% | 30.17% - 56.11% | ||||||||||||||
| Expected service period | 3.0 years | 3.0 years | 3.0 years | ||||||||||||||
| Expected dividend yield (assuming full reinvestment) | — | % | — | % | — | % | |||||||||||
During the years ended December 31, 2025, 2024 and 2023, the Company recognized $11.4 million, $9.0 million and $7.9 million, respectively, of stock-based compensation expense included in general and administrative expense in the consolidated statements of income. As of December 31, 2025, there was $29.5 million of total unrecognized stock-based compensation expense related to unvested awards, which is expected to be recognized over a weighted average period of 2.6 years.
Employee Benefit Plan
The Company maintains a 401(k) plan that allows for eligible participants to defer compensation, subject to certain limitations imposed by the Internal Revenue Code of 1986, as amended (the “Code”). The Company provides a discretionary matching contribution of up to 4% of each participant’s eligible compensation. During the years ended December 31, 2025, 2024 and 2023, the Company’s matching contributions were $0.4 million, $0.4 million and $0.3 million, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 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.