SILICON LABORATORIES INC.SLAB
SILICON LABORATORIES INC. Stock Compensation Disclosure
Stock-Based Compensation
The Company has two active stock plans, the 2009 Stock Incentive Plan (the “2009 Plan”) and the 2009 Employee Stock Purchase Plan (the “2009 ESPP”) that have been amended and approved by shareholders from time to time.
•The 2009 Plan allows for grants of stock options, stock appreciation rights, performance shares, performance stock units, restricted stock units (“RSUs”), restricted stock awards (“RSAs”), performance-based stock units (“PSUs”) and other awards (collectively, “awards”). All awards deduct one share from the 2009 Plan shares available for issuance for each share granted. Awards granted under the 2009 Plan contain vesting provisions mostly ranging from to four years. To the extent awards granted under the 2009 Plan terminate, expire, or lapse for any reason, or are settled in cash, shares subject to such awards will again be available for grant.
•The 2009 ESPP allows eligible employees to purchase a limited number of shares of the Company’s common stock at no less than 85% of the fair market value of a share of common stock at prescribed purchase intervals
during an offering period. Each offering period is comprised of a series of one or more successive and/or overlapping purchase intervals and has a maximum term of 27 months.
2009 Plan
The Company granted to its employees 0.8 million, 0.7 million and 0.5 million shares of full value awards from the 2009 Plan during fiscal 2025, 2024 and 2023, respectively. Full value awards include RSUs, MSUs, and PSUs.
MSUs provide the rights to acquire a number of shares of common stock for no cash consideration based upon achievement of specified levels of market conditions. The requisite measurement period for these MSUs is also the vesting period, which is generally three years. MSUs granted in 2020 measured the relative performance of the total stockholders’ return of the Company against that of a selected benchmarked group of companies. The Company granted no MSUs in fiscal 2025, 2024 and 2023.
PSUs provide for the rights to acquire a number of shares of common stock for no cash consideration based upon the achievement of specified revenue or profitability objectives during the year. The requisite performance period of these PSUs is approximately three years from the date of grant. The Company granted 145,735; 95,953; and 85,554 PSUs in fiscal 2025, 2024, and 2023, respectively.
2009 ESPP
The rights to purchase common stock granted under the 2009 ESPP are intended to be treated as either (i) purchase rights granted under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Internal Revenue Code (the “423(b) Plan”), or (ii) purchase rights granted under an employee stock purchase plan that is not subject to the terms and conditions of Section 423(b) of the Internal Revenue Code (the “Non-423(b) Plan”). The Company will retain the discretion to grant purchase rights under either the 423(b) Plan or the Non-423(b) Plan. During fiscal 2025, 2024 and 2023, the Company issued 160,000; 173,000; and 154,000 shares, respectively, under the 2009 ESPP to its employees. The weighted-average fair value for purchase rights granted in fiscal 2025 under the 2009 ESPP was $34.90 per share.
Accounting for Stock-Based Compensation
Stock-based compensation costs are based on the fair values on the date of grant for awards under the 2009 Plan, and on the date of enrollment for grants under the 2009 ESPP. The fair values of stock awards (such as RSUs, PSUs and RSAs) are estimated based on their intrinsic values. The fair values of MSUs are estimated using a Monte Carlo simulation. The fair values of stock options and grants under the 2009 ESPP are estimated using the Black-Scholes option-pricing model. The fair values of all such stock-based grants are generally amortized on a straight-line basis over the vesting period of the grants.
The following table presents details of stock-based compensation costs recognized in the Consolidated Statements of Operations (in thousands):
| Year Ended | |||||||||||||||||
| January 3, 2026 | December 28, 2024 | December 30, 2023 | |||||||||||||||
| Cost of revenues | $ | 1,944 | $ | 1,678 | $ | 906 | |||||||||||
| Research and development | 48,447 | 40,393 | 35,491 | ||||||||||||||
| Selling, general and administrative | 29,933 | 19,431 | 11,812 | ||||||||||||||
| 80,324 | 61,502 | 48,209 | |||||||||||||||
| Income tax benefit | (11,670) | (8,557) | (6,230) | ||||||||||||||
| Total | $ | 68,654 | $ | 52,945 | $ | 41,979 | |||||||||||
The Company recorded $1.5 million and $0.6 million of stock-based compensation charges during fiscal 2025 and 2024 respectively, in connection with the modification of certain equity awards. The modifications were pursuant to employee terminations. There were no other significant modifications made to any stock grants during fiscal 2025, 2024 or 2023.
The Company had approximately $127.0 million of total unrecognized compensation cost related to equity grants as of January 3, 2026 that is expected to be recognized over a weighted-average period of approximately 2.0 years. There were no significant stock-based compensation costs capitalized into assets in any of the periods presented.
Fair value assumptions and stock awards activity
The fair values estimated from the Black-Scholes option-pricing model for ESPP shares granted were calculated using the following assumptions:
Year Ended | ||||||||||||||||||||
| Employee Stock Purchase Plan | January 3, 2026 | December 28, 2024 | December 30, 2023 | |||||||||||||||||
| Expected volatility | 55 | % | 45 | % | 40 | % | ||||||||||||||
| Risk-free interest rate % | 4.05 | % | 4.39 | % | 5.47 | % | ||||||||||||||
| Expected term (in months) | 9 | 9 | 9 | |||||||||||||||||
| Dividend yield | — | — | — | |||||||||||||||||
A summary of stock-based compensation activity with respect to fiscal 2025 follows:
| Stock Options | Shares (000s) | Weighted- Average Exercise Price | Weighted-Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value (000s) | ||||||||||||||||||||||
| Outstanding at December 28, 2024 | 18 | $ | 43.82 | 1.08 | $ | 1,534 | ||||||||||||||||||||
| Exercised | 18 | $ | 43.82 | $ | 1,774 | |||||||||||||||||||||
| Outstanding at January 3, 2026 | — | $ | — | |||||||||||||||||||||||
| Vested at January 3, 2026 and expected to vest | — | $ | — | |||||||||||||||||||||||
| Exercisable at January 3, 2026 | — | $ | — | |||||||||||||||||||||||
| RSAs and RSUs | Shares (000s) | Weighted- Average Grant Date Fair Value | Weighted-Average Remaining Vesting Term (In Years) | Aggregate Intrinsic Value (000s) | ||||||||||||||||||||||
| Outstanding at December 28, 2024 | 968 | $ | 132.02 | |||||||||||||||||||||||
| Granted | 694 | $ | 132.42 | |||||||||||||||||||||||
| Vested or issued | (440) | $ | 135.47 | |||||||||||||||||||||||
| Cancelled or forfeited | (71) | $ | 130.75 | |||||||||||||||||||||||
| Outstanding at January 3, 2026 | 1,151 | $ | 131.02 | 1.18 | $ | 151,802 | ||||||||||||||||||||
| Outstanding at January 3, 2026 and expected to vest | 1,150 | $ | 131.04 | 1.18 | $ | 151,703 | ||||||||||||||||||||
| PSUs and MSUs | Shares (000s) | Weighted- Average Grant Date Fair Value | Weighted-Average Remaining Vesting Term (In Years) | Aggregate Intrinsic Value (000s) | ||||||||||||||||||||||
| Outstanding at December 28, 2024 | 235 | $ | 165.74 | |||||||||||||||||||||||
| Granted | 146 | $ | 148.99 | |||||||||||||||||||||||
| Vested or issued | — | $ | — | |||||||||||||||||||||||
| Cancelled or forfeited | (85) | $ | 172.44 | |||||||||||||||||||||||
| Outstanding at January 3, 2026 | 296 | $ | 155.56 | 1.35 | $ | 39,037 | ||||||||||||||||||||
| Outstanding at January 3, 2026 and expected to vest | 175 | $ | 146.46 | 1.35 | $ | 23,034 | ||||||||||||||||||||
The following summarizes the Company’s weighted average fair value at the date of grant:
| Year Ended | |||||||||||||||||
| January 3, 2026 | December 28, 2024 | December 30, 2023 | |||||||||||||||
| Per grant of RSAs and RSUs | $ | 132.42 | $ | 125.19 | $ | 137.11 | |||||||||||
| Per grant of PSUs and MSUs | $ | 148.99 | $ | 138.22 | $ | 188.45 | |||||||||||
The following summarizes the Company’s stock-based payment and stock option values (in thousands):
| Year Ended | |||||||||||||||||
| January 3, 2026 | December 28, 2024 | December 30, 2023 | |||||||||||||||
| Intrinsic value of stock options exercised | $ | 1,774 | $ | 6,063 | $ | 2,162 | |||||||||||
| Intrinsic value of RSUs that vested | $ | 56,842 | $ | 49,008 | $ | 61,371 | |||||||||||
| Grant date fair value of RSUs that vested | $ | 59,686 | $ | 52,371 | $ | 53,088 | |||||||||||
| Intrinsic value of PSUs and MSUs that vested | $ | — | $ | 7,202 | $ | 5,163 | |||||||||||
| Grant date fair value of PSUs and MSUs that vested | $ | — | $ | 9,067 | $ | 3,037 | |||||||||||
As of January 3, 2026, the Company had reserved shares of common stock for future issuance as follows (in thousands):
| 2009 Plan | 839 | ||||
| 2009 ESPP | 658 | ||||
| Total shares reserved | 1,497 | ||||
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.