Travel & Leisure Co.TNL
Travel & Leisure Co. Stock Compensation Disclosure
Stock-Based Compensation
The Company has a stock-based compensation plan available to grant RSUs, PSUs, stock-settled appreciation rights, NQs, and other stock-based awards to key employees, non-employee directors, advisors, and consultants.
Under the Amended and Restated 2006 Equity Incentive Plan, a maximum of 15.7 million shares of common stock may be awarded. As of December 31, 2025, based on number of awards granted at target performance levels, 9.4 million shares remained available.
Incentive Equity Awards Granted by the Company
During the year ended December 31, 2025, the Company granted incentive equity awards to key employees and senior officers of $43 million in the form of RSUs and $10 million in the form of PSUs, based on target performance. Of these awards, the majority of RSUs will vest ratably over a period of four years and the PSUs will cliff vest on the third
anniversary of the grant date, contingent upon the Company achieving certain performance metrics, with a maximum vesting of 200%.
During the year ended December 31, 2024, the Company granted incentive equity awards of $34 million in the form of RSUs and $10 million in the form of PSUs. During 2023 the Company granted incentive equity awards of $35 million in the form of RSUs and $21 million in the form of PSUs.
The activity related to incentive equity awards granted by the Company to key employees and senior officers for the year ended December 31, 2025, consisted of the following (in millions, except grant prices):
| Balance as of December 31, 2024 | Granted | Performance Adjustment (a) | Vested/Exercised (b) | Cancelled / Forfeited (c) | Balance as of December 31, 2025 | ||||||||||||||||||||||||||||||||||||
| RSUs | |||||||||||||||||||||||||||||||||||||||||
| Number of RSUs | 1.6 | 0.8 | — | (0.6) | (0.1) | 1.7 | (d) | ||||||||||||||||||||||||||||||||||
| Weighted average grant price | $ | 45.99 | $ | 55.58 | $ | — | $ | 47.84 | $ | 47.60 | $ | 49.64 | |||||||||||||||||||||||||||||
| PSUs | |||||||||||||||||||||||||||||||||||||||||
| Number of PSUs | 0.9 | 0.2 | 0.1 | (0.3) | — | 0.9 | (e) | ||||||||||||||||||||||||||||||||||
| Weighted average grant price | $ | 45.17 | $ | 54.46 | $ | 52.87 | $ | 52.87 | $ | — | $ | 46.08 | |||||||||||||||||||||||||||||
| NQs | |||||||||||||||||||||||||||||||||||||||||
| Number of NQs | 1.4 | — | — | (0.5) | — | 0.9 | (f) | ||||||||||||||||||||||||||||||||||
| Weighted average grant price | $ | 43.40 | $ | — | $ | — | $ | 42.50 | $ | — | $ | 43.97 | |||||||||||||||||||||||||||||
(a)Represents additional shares awarded as the Company exceeded target performance metrics at the end of the associated performance period.
(b)Upon exercise of NQs and vesting of RSUs and PSUs, the Company issues new shares to participants.
(c)The Company recognizes cancellations and forfeitures as they occur.
(d)Aggregate unrecognized compensation expense related to RSUs was $55 million as of December 31, 2025, which is expected to be recognized over a weighted average period of 2.5 years.
(e)The aggregate unrecognized compensation expense related to PSUs that are probable of vesting was $13 million as of December 31, 2025, which is expected to be recognized over a weighted average period of 1.8 years. The maximum amount of compensation expense associated with PSUs that are not probable of vesting could range up to $2 million which would be recognized over a weighted average period of 0.2 years.
(f)There were 0.9 million NQs which were exercisable as of December 31, 2025. These exercisable NQs will expire over a weighted average period of 4.1 years and carry a weighted average grant date fair value of $9.08. There was no unrecognized compensation expense for NQs as of December 31, 2025.
The Company did not grant any stock options during the years 2025, 2024, or 2023. The fair value of stock options granted by the Company prior to 2023 were estimated on the date of grant using the Black-Scholes option-pricing model with the relevant weighted average assumptions. Expected volatility was based on both historical and implied volatilities of the Company’s stock and the stock of comparable companies over the estimated expected life for options. The expected life represented the period of time these awards were expected to be outstanding. The risk-free interest rate was based on yields on U.S. Treasury strips with a maturity similar to the estimated expected life of the options. The projected dividend yield was based on the Company’s anticipated annual dividend divided by the price of the Company’s stock on the date of the grant.
The Company received $24 million, $6 million, and less than $1 million from option exercises during 2025, 2024, and 2023. The total intrinsic value of options exercised was $10 million, $1 million, and less than $1 million during 2025, 2024, and 2023. The vest date fair value of shares that vested were $53 million, $35 million, and $37 million during 2025, 2024, and 2023.
Stock-Based Compensation Expense
The Company recorded stock-based compensation expense of $57 million, $41 million, and $38 million during 2025, 2024, and 2023, related to the incentive equity awards granted to key employees, senior officers, and non-employee directors. During 2024 and 2023 such stock-based compensation expense includes $1 million and $2 million which has been
classified within Restructuring on the Consolidated Statements of Income. The Company recognized $17 million, $11 million, and $9 million of tax benefits associated with stock-based compensation during 2025, 2024, and 2023.
The Company paid $14 million, $9 million, and $10 million of taxes for the net share settlement of incentive equity awards that vested during 2025, 2024, and 2023. Such amounts are included within Financing activities on the Consolidated Statements of Cash Flows.
Employee Stock Purchase Plan
The Company has an employee stock purchase plan which allows eligible employees to purchase common shares of Company stock through payroll deductions at a 10% discount off the fair market value at the grant date. The Company issued 0.2 million shares under this plan during each of 2025, 2024, and 2023 and recognized $1 million of compensation expense for each of these issuances. The value of shares issued under this plan was $10 million, $9 million, and $10 million during 2025, 2024, and 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
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.