Share-based payments. As part of its incentive compensation program for executives and senior management employees, the Company provides share-based awards, which primarily include a combination of time-based restricted stock units and performance-based restricted stock units, and are typically granted annually during the first quarter of the year. Each restricted stock unit represents a contractual right to receive a share of the Company's Common Stock. The time-based units generally vest on each of the first three anniversaries of the grant date, while the performance-based units vest upon achievement of certain financial objectives and employee service requirements over a period of approximately three years. The Company has not granted stock options since 2021 and all outstanding stock option awards are already fully vested. The compensation expense associated with the share-based awards is calculated based on the fair value of the related award and recognized over the corresponding vesting period, and is presented as part of employee costs in the consolidated statement of income and comprehensive income. Award forfeitures are recorded as credits against employee costs in the period in which they occur.
The aggregate grant-date fair value of restricted stock unit awards to employees during 2025, 2024 and 2023 was $17.1 million (241,800 stock units with an average grant price of $70.69), $18.9 million (297,400 stock units with an average grant price of $63.41) and $12.3 million (299,000 stock units with an average grant price of $41.09), respectively.
A summary of the restricted stock unit activity during the year ended December 31, 2025 is presented below: | | | | | | | | | | | |
| Units | | Weighted-Average Grant-Date Fair Value per Share ($) |
| |
Outstanding at January 1, 2025 | 516,090 | | | 54.50 | |
| Granted | 241,783 | | | 70.69 | |
| | | |
| Converted | (191,681) | | | 55.59 | |
| Forfeited | (11,653) | | | 59.95 | |
Outstanding at December 31, 2025 | 554,539 | | | 61.06 | |
Unvested at December 31, 2025 | 530,938 | | | 61.54 | |
A summary of the stock option activity during the year ended December 31, 2025 is presented below: | | | | | | | | | | | |
| Units | | Weighted-Average Exercise Price ($) |
| |
Outstanding at January 1, 2025 | 536,000 | | | 42.62 | |
| | | |
| Exercised | (40,801) | | | 45.73 | |
| | | |
Outstanding at December 31, 2025 | 495,199 | | | 42.36 | |
Unvested at December 31, 2025 | — | | | — | |
As of December 31, 2025, the aggregate intrinsic value and weighted average remaining contractual term related to outstanding options was $13.8 million and 4.3 years, respectively.
The fair value of grants that vested in 2025 and 2024 aggregated to $13.2 million and $13.0 million, respectively. For the years ended December 31, 2025, 2024 and 2023, compensation costs recognized related to share-based awards to employees were approximately $16.1 million, $12.7 million and $10.1 million, respectively. The total tax benefits recognized in the consolidated statements of income and comprehensive income from tax deductions relating to vesting of equity awards in 2025, 2024 and 2023 were $2.3 million, $2.2 million and $0.9 million, respectively. As of December 31, 2025, compensation costs not yet recognized related to all employee nonvested awards was $13.8 million, which is expected to be recognized over a weighted average period of 1.0 year.
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.