PRICE T ROWE GROUP INCTROW

PRICE T ROWE GROUP INC Stock Compensation Disclosure

10-KFiled Feb 13, 20263 min read
LONG-TERM INCENTIVE COMPENSATION.
SHARES AUTHORIZED FOR STOCK-BASED COMPENSATION PROGRAMS.

At December 31, 2025, a total of 14,000,868 shares of unissued common stock were authorized for issuance under our stock-based compensation plans. Additionally, a total of 2,446,539 shares are authorized for issuance under a plan whereby substantially all employees may acquire common stock through payroll deductions at prevailing market prices.

STOCK OPTIONS.

The following table summarizes the status of, and changes in, our stock options during 2025.
OptionsWeighted-
average
exercise
price		Weighted-average
remaining
contractual
term in
years
Outstanding at December 31, 2024661,377 $73.76 
Exercised(642,149)$73.89 
Expired(1,560)$79.71 
Outstanding and exercisable at December 31, 202517,668 $68.49 0.6

There was no stock option-based compensation expense in 2025, 2024, or 2023.

The total intrinsic value of options exercised was $21.2 million in 2025, $27.7 million in 2024, and $30.6 million in 2023. At December 31, 2025, the aggregate intrinsic value of in-the-money options outstanding was $0.6 million.
RESTRICTED STOCK UNITS.

The following table summarizes the status of, and changes in, our nonvested restricted stock units during 2025. 
Restricted
stock
units		Weighted-
average
fair value
Nonvested at December 31, 20246,001,579 $124.73 
Time-based grants1,969,573 $104.97 
Performance-based grants93,062 $105.05 
Vested (value at vest date was $184.6 million)
(1,783,965)$134.70 
Forfeited(361,897)$125.45 
Nonvested at December 31, 20255,918,352 $114.80 

Nonvested at December 31, 2025 includes performance-based restricted stock units of 384,080. These nonvested performance-based restricted stock units include 33,422 units for which the performance period has lapsed, and the performance threshold has been met.

Compensation and related costs includes expenses for stock-based awards of $216.9 million in 2025, $247.3 million in 2024, and $265.6 million in 2023.

FUTURE STOCK-BASED COMPENSATION EXPENSE.

The following table presents the compensation expense to be recognized over the requisite service period of the stock-based awards outstanding at December 31, 2025. Estimated future compensation expense will change to reflect future grants of restricted stock awards and units, future option grants, changes in the probability of performance thresholds being met and adjustments for actual forfeitures.

(in millions)
First quarter 2026$53.4 
Second quarter 202649.0 
Third quarter 202643.3 
Fourth quarter 202637.6 
202781.2 
2028 through 203161.9 
Total$326.4 

RESTRICTED FUND UNITS.

We granted restricted fund units valued you at $102.2 million in December 2025 and $103.3 million in December 2024. Below is a roll forward of the restricted fund units liability, which is reported in deferred compensation liabilities on the consolidated balance sheet.

(in millions)20252024
Balance at beginning of year$14.7 $— 
Amortization of grant date value54.6 14.8 
Amortization of market appreciation (depreciation)7.9 (0.1)
Forfeitures(0.1)— 
Settlements(22.4)— 
Balance at end of year$54.7 $14.7 
The following table presents the compensation expense to be recognized over the requisite service period of the restricted fund units outstanding at December 31, 2025. Estimated future compensation expense will change to reflect future grants, changes in the market value of the restricted fund units, which is based on selected hypothetical investments and adjustments for actual forfeitures. The grants outstanding will vest by 2030.

(in millions)
First quarter 2026$19.3 
Second quarter 202618.4 
Third quarter 202617.8 
Fourth quarter 202614.4 
202735.4 
2028 through 203031.8 
Total$137.1 

Historical Timeline

Fiscal YearFiled
2025Feb 13, 2026Showing above
2024Feb 14, 2025
2023Feb 16, 2024
2022Feb 15, 2023
2021Feb 24, 2022
2020Feb 11, 2021
2019Feb 13, 2020
2017Feb 16, 2018

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.

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