SUN COMMUNITIES INCSUI
SUN COMMUNITIES INC Stock Compensation Disclosure
9. Share-Based Compensation
As of December 31, 2025, we had two share-based compensation plans: the Sun Communities, Inc. 2015 Equity Incentive Plan (as amended, the "2015 Equity Incentive Plan") and the First Amended and Restated 2004 Non-Employee Director Option Plan (as amended, the "2004 Non-Employee Director Option Plan"). We believe granting equity awards will provide certain executives, key employees, and directors additional incentives to promote our financial success and promote employee and director retention by providing an opportunity to acquire or increase the direct proprietary interest of those individuals in our operations and future. Award recipients receive non-forfeitable distribution payments on unvested shares of restricted stock.
Time based awards for key employees and executives granted under the 2015 Equity Incentive Plan generally vest over to five years. Market condition awards for executives generally vest after three years. As of December 31, 2025, the number of shares of common stock that may be issued under the 2015 Equity Incentive Plan is 4,750,000. As of December 31, 2025, there were 2,508,340 shares available for future issuance under the 2015 Equity Incentive Plan.
The types of awards that may be granted under the 2004 Non-Employee Director Option Plan are options, restricted stock, and OP units. Only non-employee directors are eligible to participate in this plan. All outstanding awards under this plan are time based awards of restricted stock, which generally vest over three years. The maximum number of options, restricted stock, and OP units that may be issued under this plan is 375,000 shares. As of December 31, 2025, 107,965 shares remained available for future issuance.
During the years ended December 31, 2025 and 2024, shares were granted as follows:
| Grant Period | Type | Plan | Shares Granted | Grant Date Fair Value Per Share | Vesting Type | |||||||||||||||||||||||||||
| 2025 | Key Employees | 2015 Equity Incentive Plan | 156,851 | $ | 132.33 | (1) | Time Based | |||||||||||||||||||||||||
| 2025 | Executive Officers | 2015 Equity Incentive Plan | 119,041 | $ | 128.70 | (1) | Time Based | |||||||||||||||||||||||||
| 2025 | Executive Officers | 2015 Equity Incentive Plan | 114,626 | $ | 106.41 | (2) | Market Condition | |||||||||||||||||||||||||
| 2025 | Directors | 2004 Non-Employee Director Option Plan | 14,000 | $ | 122.78 | (1) | Time Based | |||||||||||||||||||||||||
| 2024 | Key Employees | 2015 Equity Incentive Plan | 230,040 | $ | 131.10 | (1) | Time Based | |||||||||||||||||||||||||
| 2024 | Executive Officers | 2015 Equity Incentive Plan | 51,800 | $ | 131.99 | (1) | Time Based | |||||||||||||||||||||||||
| 2024 | Executive Officers | 2015 Equity Incentive Plan | 41,400 | $ | 98.14 | (2) | Market Condition | |||||||||||||||||||||||||
| 2024 | Directors | 2004 Non-Employee Director Option Plan | 20,000 | $ | 129.47 | (1) | Time Based | |||||||||||||||||||||||||
(1)Represents the weighted average fair value per share of the closing price of our common stock on the dates the shares were awarded.
(2)Represents the weighted average fair value per share of the Monte Carlo simulation fair value price of our market condition awards on the dates the shares were awarded.
In October 2025, we appointed Charles D. Young as our new CEO. Pursuant to Mr. Young's appointment, we issued 58,754 shares of restricted common stock, 31,128 of which will vest in equal annual installments over four years, and 27,626 are subject to performance vesting after three years based on certain market performance criteria. We also issued 7,782 shares of common stock that vested on October 1, 2025 as an inducement to Mr. Young's employment with the Company.
Share-based compensation for performance-based RSAs with market conditions is measured based on shares expected to vest using a Monte Carlo simulation to determine fair value. The following table summarizes the weighted average assumptions utilized to calculate the grant date fair value of these awards during the periods presented:
| Grant Year | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk-free interest rate | 3.5% - 4.0% | 4.4 | % | 4.5 | % | ||||||||||||
| Dividend yield | 2.8% - 3.2% | 2.9 | % | 2.4 | % | ||||||||||||
| Volatility | 24.8% - 26.6% | 25.9 | % | 28.1 | % | ||||||||||||
| Expected term (in years) | 2.25 - 3 | 3 | 3 | ||||||||||||||
The following table summarizes our restricted stock activity for the years ended December 31, 2025, 2024, and 2023 (in millions, except share and per share data):
| Number of Shares | Weighted Average Grant Date Fair Value | Fair Value of Shares Vested | |||||||||||||||
| Unvested restricted shares at January 1, 2023 | 854,767 | $ | 144.19 | ||||||||||||||
| Granted | 381,858 | $ | 132.73 | ||||||||||||||
| Vested | (243,776) | $ | 139.03 | $ | 33.9 | ||||||||||||
| Forfeited | (55,198) | $ | 153.68 | ||||||||||||||
| Unvested restricted shares at December 31, 2023 | 937,651 | $ | 140.30 | ||||||||||||||
| Granted | 343,240 | $ | 127.17 | ||||||||||||||
| Vested | (222,842) | $ | 150.36 | $ | 33.5 | ||||||||||||
| Forfeited | (148,161) | $ | 109.12 | ||||||||||||||
| Unvested restricted shares at December 31, 2024 | 909,888 | $ | 137.39 | ||||||||||||||
| Granted | 404,518 | $ | 123.36 | ||||||||||||||
| Vested | (251,061) | $ | 147.01 | $ | 36.9 | ||||||||||||
| Forfeited | (260,036) | $ | 134.47 | ||||||||||||||
| Unvested restricted shares at December 31, 2025 | 803,309 | $ | 128.91 | ||||||||||||||
During the years ended December 31, 2025, 2024, and 2023 we recognized total share-based compensation expense from continuing operations of $39.6 million, $31.7 million, and $32.6 million, respectively, within General and administrative expense on the Consolidated Statements of Operations.
The remaining unrecognized share-based compensation cost, net related to our unvested restricted shares, which includes estimated forfeitures, as of December 31, 2025 was approximately $70.7 million and is expected to be recognized over a weighted average period of 1.7 years. Forfeitures are estimated at the grant date and are included monthly within compensation cost. The following table summarizes our expected share-based compensation cost, net related to our unvested restricted shares, in millions:
| 2026 | 2027 | 2028 | Thereafter | ||||||||||||||||||||
| Expected share-based compensation costs, net | $ | 28.3 | $ | 21.4 | $ | 11.4 | $ | 9.6 | |||||||||||||||
Modifications
During the year ended December 31, 2025, we modified certain unvested RSAs to accelerate the vesting terms such that the respective awards vested in connection with the termination or retirement of the eligible grantees ("accelerated vestings"). We accounted for the accelerated vestings as modifications under ASC 718, "Compensation-Stock Compensation," and recognized compensation expense based on the incremental fair value of the modified awards. Accordingly, we recognized accelerated share-based compensation expense of $7.7 million within General and administrative expense related to 48,134 time based restricted shares and 21,000 performance-based restricted shares previously subject to a market condition.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 18, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 23, 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.