AT&T INC.T

AT&T INC. Stock Compensation Disclosure

10-KFiled Feb 9, 20263 min read
NOTE 15. SHARE-BASED COMPENSATION

Under our various share-based compensation plans, senior and other management employees and nonemployee directors have received performance stock units and other nonvested stock units.

As of December 31, 2025, we were authorized to issue up to approximately 41 million shares of common stock (including shares that may be issued upon exercise of outstanding options or upon vesting of performance stock units or other nonvested stock units) pursuant to these various plans:
•Performance stock units, which are nonvested stock units, which are valued based upon the market price of our common stock at the date of grant and performance expectations. These distribute in the form of AT&T common stock and cash at the end of a three-year period, subject to the achievement of certain performance goals. We treat the cash-settled portion of these awards as a liability.
•Restricted stock and restricted stock units are valued at the market price of our common stock at the date of grant and do not have any performance conditions. Restricted stock predominantly vests over a three- to ten-year period and restricted stock units predominantly vest over a three-year period.

We account for our share-based compensation arrangements based on the fair value of the awards on their respective grant date, which may affect our ability to fully realize the value shown on our consolidated balance sheets of deferred tax assets associated with compensation expense. We record a valuation allowance when our future taxable income is not expected to be sufficient to recover the asset. Accordingly, there can be no assurance that the current stock price of our common shares will rise to levels sufficient to realize the entire tax benefit currently reflected on our consolidated balance sheets. However, to the extent we generate excess tax benefits (i.e., those additional tax benefits in excess of the deferred taxes associated with compensation expense previously recognized) the potential future impact on income would be reduced.

Our consolidated statements of income include the share-based compensation cost recognized for the plans described above as “Selling, general and administrative” expense. Those expenses, as well as the associated tax benefits, are reflected in the table below:
202520242023
Performance stock units$152 $127 $79 
Restricted stock and stock units384 378 400 
Total$536 $505 $479 
Income tax benefit$130 $123 $118 

A summary of the status of our nonvested stock units as of December 31, 2025, and changes during the year then ended is presented as follows (shares in millions):

Nonvested Stock Units
Shares		Weighted-Average Grant-
Date Fair Value
Nonvested at January 1, 2025
37 $19.88 
Granted18 26.04 
Vested(22)20.87 
Forfeited(4)21.13 
Nonvested at December 31, 2025
29 $22.74 
As of December 31, 2025, there was $584 of total unrecognized compensation cost related to nonvested share-based compensation arrangements outstanding. That cost is expected to be recognized over a weighted-average period of 1.89 years. The total fair value of shares vested during the year was $464 for 2025, compared to $452 for 2024 and $592 for 2023.

Historical Timeline

Fiscal YearFiled
2025Feb 9, 2026Showing above
2024Feb 12, 2025
2023Feb 23, 2024
2022Feb 13, 2023
2021Feb 16, 2022
2020Feb 25, 2021
2019Feb 20, 2020
2018Feb 20, 2019
2017Feb 20, 2018
2016Feb 17, 2017
2015Feb 18, 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.

Other Available Disclosures

Income TaxesRevenueEarnings Per ShareFair ValuePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsNew StandardsPay vs PerformanceNEO Compensation Adjustments