Seagate Technology Holdings plcSTX
Seagate Technology Holdings plc Stock Compensation Disclosure
Share-Based Compensation
Share-Based Compensation Plans
Seagate Technology Holdings plc 2022 Equity Incentive Plan (the “2022 EIP”): On October 20, 2021, (the “Approval Date”), shareholders of the Company approved the 2022 EIP that replaced Seagate Technology Holdings plc 2012 Equity Inventive Plan (the “2012 EIP”). The 2022 EIP provides for the grant of various types of awards including RSUs, options, PSUs and share appreciation rights. The maximum number of shares that may be delivered to the participants under the 2022 EIP shall not exceed (i) 14.1 million ordinary shares, plus (ii) any shares subject to any outstanding share awards granted under the 2012 EIP that, on or after the Approval Date expire, are cancelled or otherwise terminate, in whole or in part, without having been exercised or redeemed in full, or are settled in cash ((i) and (ii) together being the “Share Reserve”). The maximum aggregate number of shares that may be issued pursuant to RSUs or PSUs (collectively, “Full-Value Share Awards”) shall not exceed 12.3 million ordinary shares. Any shares that are subject to the 2022 EIP will be counted against the Share Reserve as one share for every one share granted. As of June 27, 2025, there were 9.5 million ordinary shares available for issuance of Full-Value Share Awards under the 2022 EIP.
Seagate Technology Holdings plc Executive Performance Bonus Plan (the “EPB”). Beginning in fiscal year 2023, the Company implemented the EPB utilizing RSUs instead of cash payouts for senior executives. EPB RSUs are granted under the 2022 EIP, pursuant to the achievement of performance targets and individual goals under the EPB. No EPB awards were granted for fiscal years 2025, 2024 and 2023.
Seagate Technology Holdings plc Employee Stock Purchase Plan (the “ESPP”). There are 60 million ordinary shares authorized to be issued under the ESPP. The ESPP consists of a series of six-month offering period with a maximum issuance of 1.5 million ordinary shares per offering period. The ESPP allows eligible employees to contribute up to 10% of their eligible compensation to purchase the Company’s common stock. The price of common stock purchased equals to 85% of the lesser of the fair market value on the first day or the last day of each offering period. During fiscal years 2025, 2024 and 2023, employees purchased approximately 1 million shares each year under this plan at weighted average prices of $77.87, $54.71 and $62.36 per share, respectively. As of June 27, 2025, approximately 5.2 million ordinary shares were available for future issuance.
Share-Based Compensation Expense
The Company recorded $163 million, $127 million and $115 million of share-based compensation with a resulting tax benefit of $21 million, $5 million and $5 million, respectively, during fiscal years 2025, 2024 and 2023. Management made an estimate of expected forfeitures and recognized compensation costs only for those equity awards expected to vest.
Restricted Stock Units
RSUs generally vest over a period of four years, with 25% vesting on the first anniversary of the vesting commencement date and the remaining 75% vesting ratably each quarter over the next 36 months, subject to continuous employment with the Company through the vesting date.
The following is a summary of unvested restricted stock activities:
| Unvested Restricted Stocks | Number of Shares (In millions) | Weighted-Average Grant-Date Fair Value | ||||||||||||
Unvested at June 28, 2024 | 3.4 | $ | 62.20 | |||||||||||
| Granted | 1.5 | $ | 96.59 | |||||||||||
| Forfeited | (0.2) | $ | 72.50 | |||||||||||
| Vested | (1.8) | $ | 60.66 | |||||||||||
Unvested at June 27, 2025 | 2.9 | $ | 79.96 | |||||||||||
At June 27, 2025, the total unrecognized share-based compensation cost related to unvested restricted stocks was approximately $171 million. This cost is being amortized on a straight-line basis over a weighted-average remaining term of 2.2 years and will be adjusted for subsequent changes in estimated forfeitures. The aggregate fair value of restricted stocks vested during fiscal years 2025, 2024 and 2023 were approximately $105 million, $105 million and $105 million, respectively.
The fair value related to RSUs for fiscal years 2025, 2024 and 2023 were estimated using the following assumptions:
| Fiscal Years | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| RSUs | |||||||||||||||||
| Expected term (in years) | 1 - 2.2 | 1 - 2.2 | 1 - 2.2 | ||||||||||||||
| Expected dividend rate | 2.0 - 3.3% | 2.4 - 4.4% | 3.2 - 5.5% | ||||||||||||||
| Weighted-average expected dividend rate | 2.6 | % | 4.0 | % | 3.8 | % | |||||||||||
| Weighted-average fair value | $ | 96.59 | $ | 59.96 | $ | 62.82 | |||||||||||
The expected term represents the period that the Company’s share-based awards are expected to be outstanding and was determined based on historical experience of similar awards. The expected dividend yield is determined by dividing the expected per share dividend during the coming year by the grant date share price.
EPB RSUs can be settled in cash, subject to certain employment conditions, and therefore classified as liability awards. The Company remeasures the fair value of these liability awards at each fiscal quarter end. Generally, EPB RSUs vest in full on the first anniversary of the vesting commencement date.
During fiscal year 2025, the Company recognized approximately $37 million of share-based compensation expense related to EPB RSUs in the Consolidated Statements of Operations, with the corresponding liability recorded within Accrued employee compensation on the Consolidated Balance Sheets. During fiscal years 2024 and 2023, the Company did not recognize any share compensation expense related to liability awards.
Performance-based Share Units
The Company granted PSUs that vest on the satisfaction of continuous employment and achievement of certain financial and operational performance goals established by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”). These awards vest after the end of the performance period of three years from the grant date. During fiscal years 2024 and 2023, the PSUs granted and outstanding were not material. Compensation expense related to these units is only recorded in a period if it is probable that the performance goals will be met, and it is to be recorded at the expected level of achievement. The expenses associated with these PSUs were not material for fiscal years 2024 and 2023, respectively.
| Performance-based Share Units | Number of Shares (In millions) | Weighted-Average Grant-Date Fair Value | ||||||||||||
Unvested at June 28, 2024 | 0.9 | $ | 70.97 | |||||||||||
| Granted | 0.2 | $ | 103.53 | |||||||||||
| Forfeited | (0.1) | $ | 92.17 | |||||||||||
| Vested | (0.2) | $ | 73.64 | |||||||||||
Unvested at June 27, 2025 | 0.8 | $ | 75.55 | |||||||||||
At June 27, 2025, the total unrecognized share-based compensation cost related to unvested performance-based share units was approximately $38 million. This cost is being amortized on a straight-line basis over a weighted-average remaining term of 1.2 years and will be adjusted for subsequent changes in estimated forfeitures. The aggregate fair value of performance-based share units vested during fiscal years 2025, 2024 and 2023 were approximately $17 million, $6 million and $16 million, respectively.
The fair value related to PSUs for fiscal years 2025, 2024 and 2023 were estimated using the following assumptions:
| Fiscal Years | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| PSUs subject to TSR/ROIC conditions | |||||||||||||||||
| Expected term (in years) | 3.0 | 3.0 | 3.0 | ||||||||||||||
| Volatility | 37 | % | 39 | % | 40 | % | |||||||||||
| Weighted-average volatility | 37 | % | 39 | % | 40 | % | |||||||||||
| Expected dividend rate | 2.8 | % | 4.4 | % | 4.1 | % | |||||||||||
| Weighted-average expected dividend rate | 2.8 | % | 4.4 | % | 4.1 | % | |||||||||||
| Risk-free interest rate | 3.5 | % | 4.6 | % | 3.6 | % | |||||||||||
| Weighted-average fair value | $ | 75.55 | $ | 70.97 | $ | 64.38 | |||||||||||
Share Options
Options generally vest over a period of four years, with 25% vesting on the first anniversary of the vesting commencement date and the remaining 75% vesting ratably each quarter over the next 36 months, subject to continuous employment with the Company through the vesting date. The exercise price of a share option is equal to the closing price of the Company’s ordinary shares on NASDAQ on the grant date. The expenses associated with share options were not material for any of the periods presented.
Employee Savings Plan
The Company offers various defined contribution plans for U.S. and non-U.S. employees. In the U.S., qualified employees under the Seagate 401(k) Plan (the "401(k) plan") may elect to make contributions up to 50% of their eligible earned compensation, but not more than statutory limits. Pursuant to the 401(k) plan, the Company matches 50% of employee contributions, up to 6% of compensation, subject to a maximum annual employer contribution of $6,000 per participating employee. During fiscal years 2025, 2024 and 2023, the Company made matching contributions of $67 million, $65 million and $79 million, respectively, under defined contribution plans for employeesHistorical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 1, 2025 | Showing above |
| 2024 | Aug 2, 2024 | |
| 2023 | Aug 4, 2023 | |
| 2022 | Aug 5, 2022 | |
| 2020 | Aug 7, 2020 | |
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.