Sensata Technologies Holding plcST
Sensata Technologies Holding plc Stock Compensation Disclosure
Share-Based Compensation
At our 2021 Annual General Meeting, our shareholders approved the Sensata Technologies Holding plc 2021 Equity Incentive Plan (the "2021 Equity Plan"), which replaced the Sensata Technologies Holding plc First Amended and Restated 2010 Equity Incentive Plan (the "2010 Equity Plan"). The 2021 Equity Plan is substantially similar to the 2010 Equity Plan with some updates based on changes in law and current practices. The purpose of the 2021 Equity Plan is to promote the long-term growth, profitability, and interests of the Company and its shareholders by aiding us in attracting and retaining employees, officers, consultants, advisors, and non-employee directors capable of assuring our future success. All awards granted subsequent to this approval were made under the 2021 Equity Plan. The 2010 Equity Plan was terminated as to the grant of any additional awards, but prior awards remain outstanding in accordance with their terms. As of December 31, 2025, there were 3.3 million ordinary shares available for grants of awards under the 2021 Equity Plan.
Refer to Note 2: Significant Accounting Policies for additional information related to our share-based compensation accounting policies.
Share-Based Compensation Awards
We grant restricted stock unit ("RSU") and performance-based restricted stock unit ("PRSU") awards. We also have stock option awards outstanding, but we have not granted such awards since the year ended December 31, 2019. Throughout this Annual Report on Form 10-K, RSU and PRSU awards are often referred to collectively as "restricted securities."
For option and RSU awards, vesting is typically only subject to service conditions, although they include continued vesting provisions for retirement-eligible employees. For PRSU awards, vesting is also subject to service conditions, however the number of awarded units that ultimately vest also depends on the attainment of certain predefined performance criteria. In the year ended December 31, 2023, we began granting certain Market PRSUs with market performance conditions. These PRSUs are valued using the Monte Carlo simulation. Refer to Note 2: Significant Accounting Policies for additional information.
Options
A summary of stock option activity for the year ended December 31, 2025 is presented in the table below:
Number of Options (millions) | Weighted-Average Exercise Price Per Option | Weighted-Average Remaining Contractual Term (years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Balance as of December 31, 2024 | 0.8 | $ | 46.94 | 2.3 | $ | — | |||||||||||||||||
| Forfeited or expired | (0.1) | $ | 55.68 | ||||||||||||||||||||
| Exercised | — | $ | — | ||||||||||||||||||||
Balance as of December 31, 2025 | 0.7 | $ | 44.55 | 1.8 | $ | — | |||||||||||||||||
Options vested and exercisable as of December 31, 2025 | 0.7 | $ | 44.55 | 1.8 | $ | — | |||||||||||||||||
No options were exercised in the year ended December 31, 2025. Aggregate intrinsic value of options exercised in the years ended December 31, 2024 and 2023 was $0.4 million and $1.7 million, respectively.
Restricted Securities
We grant RSU awards that vest one-third on the annual anniversary of the grant for three years and PRSU awards that cliff vest three years after the grant date.
In the event of a qualifying termination, any unvested restricted securities that would have otherwise vested within the next six months vest in full on the termination date, and in the event of termination by reason of a covered retirement, any unvested restricted securities remain outstanding on the termination date and subject to continued vesting. For PRSU awards, the number of units that ultimately vest depends on the extent to which certain performance criteria, described in the table below, are met.
A summary of restricted securities granted in the years ended December 31, 2025, 2024, and 2023 is presented below:
Percentage Range of Units That May Vest (1) | |||||||||||||||||||||||||||||||||||
0.0% to 150.0% | 0.0% to 200.0% | ||||||||||||||||||||||||||||||||||
(Awards in millions) | RSU Awards Granted | Weighted-Average Grant-Date Fair Value | PRSU Awards Granted (2) | Weighted-Average Grant-Date Fair Value | PRSU Awards Granted | Weighted-Average Grant-Date Fair Value | |||||||||||||||||||||||||||||
| 2025 | 1.2 | $ | 24.16 | 0.5 | $ | 25.58 | — | $ | — | ||||||||||||||||||||||||||
| 2024 | 1.1 | $ | 36.80 | 0.3 | $ | 37.71 | — | $ | — | ||||||||||||||||||||||||||
| 2023 | 0.6 | $ | 48.68 | 0.2 | $ | 52.72 | 0.2 | $ | 49.15 | ||||||||||||||||||||||||||
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(1) Represents the percentage range of PRSU award units granted that may vest according to the terms of the awards. The amounts presented within this table do not reflect our current assessment of the probable outcome of vesting based on the achievement or expected achievement of performance conditions.
(2) Approximately 50 percent of these awards represent Market PRSUs that will be evaluated relative to the performance of certain peers as defined in the award agreement. The number of units that ultimately vest will be from 0% to 150%, depending on achievement of these performance criteria.
The fair value of Market PRSUs was estimated on the date of grant (April 2025, 2024 and 2023) using a Monte Carlo simulation pricing model. See Note 2: Significant Accounting Policies for further discussion. The key assumptions used in estimating the grant-date fair value of Market PRSUs for the years ended December 31, 2025, 2024, and 2023 are presented in the table below:
| For the year ended December 31, 2025 | For the year ended December 31, 2024 | For the year ended December 31, 2023 | |||||||||
Expected term (years) | 3 | 3 | 3 | ||||||||
Risk free interest rate | 3.8% | 4.5% | 3.8% | ||||||||
Dividend yield | 2.0% | 1.3% | 0.9% | ||||||||
Stock price on valuation date | $24.23 | $36.50 | $50.00 | ||||||||
Expected volatility | 32% | 31% | 36% | ||||||||
Compensation expense for the year ended December 31, 2025 reflects our estimate of the probable outcome of the performance
conditions associated with the PRSU awards granted in the years ended December 31, 2025, 2024, and 2023.
A summary of activity related to outstanding unvested restricted securities for the year ended December 31, 2025 is presented in the table below:
Restricted Securities (millions) | Weighted-Average Grant-Date Fair Value | ||||||||||
Balance as of December 31, 2024 | 1.6 | $ | 42.06 | ||||||||
| Granted | 1.7 | $ | 24.60 | ||||||||
| Forfeited | (0.6) | $ | 33.10 | ||||||||
| Vested | (0.6) | $ | 26.47 | ||||||||
Balance as of December 31, 2025 | 2.1 | $ | 30.58 | ||||||||
The fair value of restricted securities that vested during the years ended December 31, 2025, 2024, and 2023 was $16.7 million, $33.3 million, and $34.7 million, respectively.
The weighted-average remaining periods (in years) over which the restrictions will lapse as of December 31, 2025, 2024, and 2023 are as follows:
As of December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Outstanding | 1.6 | 1.3 | 1.2 | ||||||||||||||
| Expected to vest | 1.7 | 1.3 | 1.2 | ||||||||||||||
The expected to vest restricted securities are calculated based on the application of a forfeiture rate assumption to all outstanding restricted securities as well as our assessment of the probability of meeting the required performance conditions that pertain to the PRSU awards.
Share-Based Compensation Expense
The table below presents non-cash compensation expense related to our equity awards, which is recognized within SG&A expense in the consolidated statements of operations, for the years ended December 31, 2025, 2024, and 2023:
For the year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Stock options | $ | — | $ | 0.6 | $ | (0.1) | |||||||||||
| Restricted securities | 25.0 | 37.9 | 30.1 | ||||||||||||||
| Share-based compensation expense | $ | 25.0 | $ | 38.5 | $ | 30.0 | |||||||||||
In the years ended December 31, 2025, 2024, and 2023, we recognized $4.0 million, $5.5 million, and $4.5 million, respectively, of income tax benefit associated with share-based compensation expense.
The table below presents unrecognized compensation expense at December 31, 2025 for each class of award and the remaining expected term for this expense to be recognized:
| Unrecognized Compensation Expense | Expected Recognition (years) | ||||||||||
| Restricted securities | $ | 30.9 | 1.8 | ||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 13, 2023 | |
| 2021 | Feb 10, 2022 | |
| 2020 | Feb 12, 2021 | |
| 2019 | Feb 11, 2020 | |
| 2018 | Feb 6, 2019 | |
| 2017 | Feb 1, 2018 | |
| 2016 | Feb 2, 2017 | |
| 2015 | Feb 2, 2016 | |
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.