TRINET GROUP, INC.TNET
TRINET GROUP, INC. Stock Compensation Disclosure
STOCK BASED COMPENSATION
Equity Based Incentive Plans
Our 2019 Equity Incentive Plan and as amended and restated (the 2019 Plan), approved in May 2019, provides for the grant of stock awards, including stock options, RSUs, RSAs, and other stock awards. There were approximately 4 million shares available for grant under the 2019 Plan as of December 31, 2025.
The 2009 Equity Incentive Plan (the 2009 Plan), was replaced by the 2019 Plan, except that any outstanding awards granted under the 2009 Plan remain in effect pursuant to their terms.
Restricted Stock Units (RSUs)
Time-based RSUs generally vest over a four-year term. Performance-based RSUs are subject to vesting requirements and are earned, in part, based on certain financial performance metrics as defined in the grant notice. Actual number of shares earned under performance-based RSUs may range from 0% to 200% of the target award. Performance-based awards granted in 2025, 2024 and 2023 are earned based on a single-year performance period subject to subsequent multi-year time-based vesting with 50% of the shares earned vesting in one year after the performance period and the remaining shares in the year after. RSUs are generally forfeited if the participant terminates service prior to vesting. The fair value of our RSUs is equal to the fair value of our common stock on the grant date.
The following tables summarize RSU activity for the year ended December 31, 2025:
Time-based RSUs
| Total Number of Shares | Weighted-Average Grant Date Fair Value | |||||||
| Nonvested at December 31, 2024 | 1,100,001 | $ | 97.21 | |||||
| Granted | 813,443 | 75.21 | ||||||
| Vested | (600,037) | 90.35 | ||||||
| Forfeited | (185,756) | 78.26 | ||||||
| Nonvested at December 31, 2025 | 1,127,651 | $ | 86.55 | |||||
| Year Ended December 31, | |||||||||||
| Additional Disclosures for equity-based plans | 2025 | 2024 | 2023 | ||||||||
| Total grant date fair value of shares granted (in millions) | $ | 61 | $ | 72 | $ | 60 | |||||
| Total grant date fair value of shares vested (in millions) | $ | 54 | $ | 54 | $ | 47 | |||||
| Shares withheld to settle payroll tax liabilities related to vesting of shares held by employees | 203,701 | 216,523 | 213,569 | ||||||||
Performance-based RSUs
| Total Number Shares | Weighted-Average Grant Date Fair Value | |||||||
| Nonvested at December 31, 2024 | 179,907 | $ | 106.50 | |||||
Granted (1) | 74,840 | 76.69 | ||||||
| Vested | (52,365) | 91.60 | ||||||
| Forfeited | (23,526) | 78.65 | ||||||
| Nonvested at December 31, 2025 | 178,856 | $ | 80.78 | |||||
(1) Amount includes a reduction of 88,647 shares related to the finalization of the performance achievement levels for previously issued grants.
| Year Ended December 31, | |||||||||||
| Additional Disclosures for equity-based plans | 2025 | 2024 | 2023 | ||||||||
Total grant date fair value of shares granted (in millions) (1) | $ | 13 | $ | 17 | $ | 14 | |||||
| Total grant date fair value of shares vested (in millions) | $ | 5 | $ | 11 | $ | 14 | |||||
| Shares withheld to settle payroll tax liabilities related to vesting of shares held by employees | 22,994 | 64,290 | 74,923 | ||||||||
(1) Amount includes fair value of finalized additional grant related to the most recently ended performance period.
Employee Stock Purchase Plan
Our 2014 ESPP offers eligible employees an option to purchase shares of our common stock through payroll deductions. The purchase price is equal to the lesser of 85% of the fair market value of our common stock on the offering date or 85% of the fair market value of our common stock on the applicable purchase date. Offering periods are approximately six months in duration and will end on or about May 15 and November 15 of each year. The plan is considered to be a compensatory plan. As of December 31, 2025, approximately 6 million shares were reserved for future issuances under the ESPP.
In applying the Black Scholes option valuation model for the ESPP options, we use the following assumptions:
| Year Ended December 31, | |||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||
| Expected Term (in Years) | 0.5 | 0.5 | 0.5 | ||||||||
| Expected Volatility | 37 - 40% | 28-37% | 29-35% | ||||||||
| Risk-Free Interest Rate | 3.8-4.4% | 4.4-5.4% | 5.3-5.4% | ||||||||
| Expected Dividend Yield | 2 | % | 1 | % | 0 | % | |||||
| Shares Issued under ESPP | 180,024 | 148,157 | 175,446 | ||||||||
Stock Options
Stock options are granted to eligible employees at exercise prices equal to the fair market value of our common stock on the dates of grant. Stock options generally have a maximum contractual term of 10 years. Stock options vest after 3 years, and are generally forfeited if the employee terminates service prior to vesting.
The following table summarizes stock option activity for the year ended December 31, 2025:
| Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in millions) | |||||||||||
| Balance at December 31, 2024 | — | $ | — | — | $ | — | ||||||||
| Granted | 270,144 | 76.69 | 9.22 | — | ||||||||||
| Forfeited | (7,899) | 76.69 | — | — | ||||||||||
Balance at December 31, 2025 | 262,245 | $ | 76.69 | 9.22 | $ | — | ||||||||
| Exercisable at December 31, 2025 | — | $ | — | — | $ | — | ||||||||
| Vested and expected to vest at December 31, 2025 | 262,245 | $ | 76.69 | 9.22 | $ | — | ||||||||
We estimated the fair value of stock options using the Black-Scholes option-pricing model. Because we do not have significant exercise history in granting stock options, we estimate the expected term using the simplified method. We estimate expected volatility using the daily historical trading data of our common shares. The table below summarizes the assumptions used.
The fair value of stock options is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
| Stock Option Assumptions | ||||||||||||||
| Expected Term (in Years) | Expected Volatility | Risk-Free Interest Rate | Expected Dividend Yield | |||||||||||
December 31, 2025 | 6.5 | 41.2 | % | 4.09 | % | 1.43 | % | |||||||
| Additional Disclosures for Stock Options (in millions) | December 31, 2025 | ||||
| Weighted-average grant date fair value of stock options | $ | 31.65 | |||
| Total fair value of options granted | $ | 9 | |||
Stock Based Compensation
Stock based compensation expense is measured based on the fair value of the stock award on the grant date and recognized over the requisite service period for each separately vesting portion of the stock award. Stock based compensation expense and other disclosures for stock based awards made to our employees pursuant to the equity plans were as follows:
| Year Ended December 31, | |||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||
| Cost of providing services | $ | 15 | $ | 16 | $ | 14 | |||||
| Sales and marketing | 11 | 12 | 8 | ||||||||
| General and administrative | 33 | 31 | 33 | ||||||||
| Systems development and programming costs | 6 | 6 | 4 | ||||||||
| Total stock based compensation expense | $ | 65 | $ | 65 | $ | 59 | |||||
| Total stock based compensation capitalized | $ | 3 | $ | 3 | $ | 3 | |||||
| Income tax benefit related to stock based compensation expense | $ | 14 | $ | 14 | $ | 13 | |||||
| Tax benefit realized | $ | 10 | $ | 15 | $ | 19 | |||||
The table below summarizes unrecognized compensation expense for the year ended December 31, 2025 associated with the following:
| Amount (in millions) | Weighted-Average Period (in Years) | |||||||
| Nonvested stock options | $ | 6 | 2.22 | |||||
| Nonvested time based RSUs | 90 | 2.49 | ||||||
| Nonvested performance based RSUs | 11 | 1.91 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2021 | Feb 14, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 13, 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.