SunCoke Energy, Inc.SXC
SunCoke Energy, Inc. Stock Compensation Disclosure
16. Share-Based Compensation
Equity Classified Awards.
On May 12, 2022, the Company adopted the SunCoke Energy, Inc. Omnibus Long-Term Incentive Plan (the
“Omnibus Plan”). The Omnibus Plan provides for the grant of equity-based awards including stock options and share units, or restricted stock, to the Company’s Board of Directors and certain employees selected for participation in the plan. The total number of shares of common stock authorized for issuance under the Omnibus Plan consists of (i) 2,700,000 new shares, (ii) 2,434,445 shares of common stock reserved for issuance primarily under the previous SunCoke Energy, Inc. Long-Term Performance Enhancement Plan (“SunCoke LTPEP”), which all equity based awards were issued under prior to the effective date of May 12, 2022, and (iii) any shares of common stock subject to awards granted under the SunCoke LTPEP that were outstanding on the effective date and that, on or after such date, are not issued or delivered to a participant. As of the effective date, new awards will no longer be granted under the SunCoke LTPEP. Awards previously granted under the SunCoke LTPEP, and described in further detail below, were not modified or impacted by the adoption of the Omnibus Plan.
Stock Options
Stock options granted by the Company vest in three equal annual installments beginning one year from the date of grant, and expire ten years from the date of grant. The Company calculates the value of each employee stock option, estimated on the date of grant, using the Black-Scholes option pricing model. There were no stock options granted by the Company during the years ended December 31, 2025, 2024 and 2023.
The following table summarizes information with respect to common stock option awards outstanding as of December 31, 2025 and stock option activity during the fiscal year then ended:
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (Dollars in millions) | ||||||||||||||||||||
| Outstanding and Exercisable December 31, 2024 | 592,786 | $ | 14.45 | 1.1 | $ | 0.2 | |||||||||||||||||
| Expired | (448,887) | 15.96 | |||||||||||||||||||||
| Outstanding and Exercisable December 31, 2025 | 143,899 | $ | 9.73 | 2.4 | $ | — | |||||||||||||||||
Intrinsic value for stock options is defined as the difference between the current market value of our common stock and the exercise price of the stock options. Total intrinsic value of stock options exercised in 2025, 2024 and 2023 was zero, $0.5 million, and $0.1 million, respectively.
Restricted Stock Units Settled in Shares
The Company issues restricted stock units (“RSUs”) to be settled in shares of the Company's common stock to certain employees and members of the Board of Directors. The Company granted the following RSUs during the years ended December 31, 2025, 2024 and 2023:
| Number of RSUs | Weighted Average Grant-Date Fair Value per Unit | Grant Date Fair Value | |||||||||||||||
| (Dollars in millions) | |||||||||||||||||
| 2025 grants | $ | 364,753 | 8.79 | $ | 3.2 | ||||||||||||
| 2024 grants | $ | 268,565 | 10.86 | $ | 2.9 | ||||||||||||
| 2023 grants | $ | 352,646 | 8.97 | $ | 3.2 | ||||||||||||
The RSUs granted to employees vest and become payable in three annual installments beginning one year from the date of grant. RSUs granted to the Company's Board of Directors vest upon grant, but are issued upon termination of board service.
The following table summarizes information with respect to RSUs outstanding as of December 31, 2025 and RSU activity during the fiscal year then ended:
| Number of RSUs | Weighted Average Grant- Date Fair Value per Unit | ||||||||||
| Nonvested at December 31, 2024 | 663,173 | $ | 9.40 | ||||||||
| Granted | 364,753 | $ | 8.79 | ||||||||
| Vested | (268,882) | $ | 9.06 | ||||||||
| Nonvested at December 31, 2025 | 759,044 | $ | 9.23 | ||||||||
Total grant date fair value of RSUs vested was $2.4 million, $2.5 million and $2.1 million during 2025, 2024 and 2023, respectively.
Performance Share Units
The Company grants performance share units (“PSUs”), which represent the right to receive shares of the Company's common stock, contingent upon the attainment of Company performance and market goals and continued employment.
The Company granted the following PSUs during the years ended December 31, 2025, 2024 and 2023:
| Number of PSUs | Weighted Average Grant Date Fair Value per Unit | Grant Date Fair Value | |||||||||||||||
| (Dollars in millions) | |||||||||||||||||
2025 grant(1) | 112,856 | $ | 9.22 | $ | 1.0 | ||||||||||||
2024 grant(1) | 162,510 | $ | 10.96 | $ | 1.8 | ||||||||||||
2023 grant(1) | 147,232 | $ | 9.84 | $ | 1.4 | ||||||||||||
(1)The service period for the 2025, 2024, and 2023 PSUs ends on December 31, 2027, 2026 and 2025, and the awards will vest during the first quarter of 2028, 2027 and 2026, respectively. The service period for certain retirement eligible participants is accelerated.
The PSU grants were split 50/50 between the Company's three-year cumulative Adjusted EBITDA performance measure and the Company's three-year average pre-tax return on capital (“ROIC”) performance measure for its coke and industrial services businesses and unallocated corporate expenses. The number of PSUs ultimately awarded will be determined by the Adjusted EBITDA and ROIC performance versus targets and the Company's three-year total shareholder return (“TSR”) as compared to the TSR of the companies making up the NASDAQ U.S. Benchmark Iron & Steel Index (“TSR Modifier”). The TSR Modifier can impact the payout (between 80 percent and 120 percent of the 2025, 2024 and 2023 awards) of the Company's final performance measure results. The 2025, 2024 and 2023 awards may vest between 25 percent and 240 percent of the original units granted. The fair value of the PSUs granted is based on the closing price of our common stock on the date of grant as well as a Monte Carlo simulation for the valuation of the TSR Modifier.
The following table summarizes information with respect to unearned PSUs outstanding as of December 31, 2025 and PSU activity during the fiscal year then ended:
| Number of PSUs | Weighted Average Grant Date Fair Value per Unit | ||||||||||
| Nonvested at December 31, 2024 | 464,602 | $ | 9.94 | ||||||||
| Granted | 112,856 | $ | 9.22 | ||||||||
| Performance adjustments | 202,249 | $ | 8.40 | ||||||||
| Vested | (357,109) | $ | 8.40 | ||||||||
| Nonvested at December 31, 2025 | 422,598 | $ | 10.32 | ||||||||
Liability Classified Awards
Restricted Stock Units Settled in Cash
During the years ended December 31, 2025, 2024 and 2023, the Company issued 168,933, 165,384 and 216,547 restricted stock units to be settled in cash (“Cash RSUs”), respectively, which vest in three annual installments beginning one year from the grant date. The weighted average grant date fair value of the Cash RSUs granted during the years ended December 31, 2025, 2024 and 2023, was $9.11, $10.96 and $9.24, respectively, and was based on the closing price of our common stock on the day of grant. The Cash RSU liability at December 31, 2025 was adjusted based on the closing price of our common stock on December 31, 2025 of $7.20 per share. The Cash RSU liability was $1.5 million and $2.6 million at December 31, 2025 and 2024, respectively.
Cash Incentive Award
As of May 12, 2022, the Company grants performance-based, cash settled awards to eligible participants under the Omnibus Plan. All awards vest immediately upon a change in control and a qualifying termination of employment as defined by the Omnibus Plan. The cash incentive award liability is included in accrued liabilities and other deferred credits and liabilities on the Consolidated Balance Sheets. As of the effective date, new awards will no longer be granted under the SunCoke Energy, Inc. Long-Term Cash Incentive Plan (“SunCoke LTCIP”). The awards previously granted under the SunCoke LTCIP were not modified or impacted by the adoption of the Omnibus Plan.
The Company issued a grant date fair value award of $1.9 million, $2.6 million and $2.2 million during the years ended December 31, 2025, 2024 and 2023, respectively, for which the service periods end on December 31, 2027, 2026 and 2025, respectively, and the awards will vests during the first quarter of 2028, 2027 and 2026, respectively. The service period
for certain retiree eligible participants is accelerated. The 2025, 2024 and 2023 awards are split 50/50 between the Adjusted EBITDA and ROIC metrics, consistent with the PSU awards, but is not impacted by the TSR modifier. The 2025, 2024 and 2023 awards may vest between 25 percent and 200 percent of the original units granted.
The cash incentive award liability at December 31, 2025 was adjusted based on the Company's three-year cumulative Adjusted EBITDA and the Company's three-year adjusted average pre-tax return on capital for its coke and industrial services businesses and unallocated corporate expenses. The cash incentive award liability was $3.3 million and $6.8 million at December 31, 2025 and 2024, respectively.
Summary of Share-Based Compensation Expense
Below is a summary of the compensation expense, unrecognized compensation costs, the period for which the unrecognized compensation cost is expected to be recognized over for each award:
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
Compensation Expense(1) | Net of tax | Unrecognized Compensation Cost | Weighted Average Remaining Recognition Period | ||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | (Dollars in millions) | (Years) | |||||||||||||||||||||||||||||||||||||||||||||
| Equity Awards: | |||||||||||||||||||||||||||||||||||||||||||||||
| RSUs | $ | 2.3 | $ | 2.5 | $ | 2.9 | $ | 1.7 | $ | 1.9 | $ | 2.3 | $ | 2.1 | 1.7 | ||||||||||||||||||||||||||||||||
| PSUs | — | 1.4 | 1.9 | — | 1.1 | 1.4 | $ | 0.7 | 1.9 | ||||||||||||||||||||||||||||||||||||||
| Total equity awards | $ | 2.3 | $ | 3.9 | $ | 4.8 | $ | 1.7 | $ | 3.0 | $ | 3.7 | |||||||||||||||||||||||||||||||||||
| Liability Awards: | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash RSUs | $ | 0.7 | $ | 1.9 | $ | 2.6 | $ | 0.5 | $ | 1.4 | $ | 2.0 | $ | 0.7 | 1.7 | ||||||||||||||||||||||||||||||||
| Cash incentive award | 0.3 | 2.1 | 2.7 | 0.2 | 1.6 | 2.0 | $ | 1.3 | 1.7 | ||||||||||||||||||||||||||||||||||||||
| Total liability awards | $ | 1.0 | $ | 4.0 | $ | 5.3 | $ | 0.7 | $ | 3.0 | $ | 4.0 | |||||||||||||||||||||||||||||||||||
(1)Compensation expense is recognized by the Company in selling, general and administrative expenses on the Consolidated Statements of Operations.
The Company issued $0.1 million, $0.1 million, and $0.3 million of share-based compensation to the Company's Board of Directors in addition to RSUs included in the table above during the years ended December 31, 2025, 2024 and 2023, respectively.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.