Tradeweb Markets Inc.TW
Tradeweb Markets Inc. Stock Compensation Disclosure
Stock-Based Compensation Plans
Under the Tradeweb Markets Inc. 2019 Omnibus Equity Incentive Plan, the Company is authorized to issue up to 8,841,864 new shares of Class A common stock to employees, officers and non-employee directors. Under this plan, the Company may grant awards in respect of shares of Class A common stock, including restricted stock units (“RSUs”) and RSAs with only time-based vesting conditions, performance-based restricted stock units with both time and performance-based vesting conditions, stock options and dividend equivalent rights. Stock options have a maximum contractual term of 10 years.
In connection with organizational changes, on June 17, 2024, the Company determined that the employment of Thomas Pluta, former President of the Company, would terminate effective September 30, 2024. As of June 17, 2024, there was approximately $4.4 million in total unamortized stock-based compensation associated with equity awards previously granted to Mr. Pluta that was accelerated and amortized into expense over a revised estimated service period ending on September 30, 2024. Of this amount, $1.7 million represented regularly scheduled amortization that would have been recognized from June 17, 2024 through September 30, 2024 if Mr. Pluta’s employment was not terminated and $2.7 million represented accelerated stock-based compensation expense.
PRSU
Performance-based restricted stock units that are promises to issue actual shares of Class A common stock based on the financial performance of the Company are referred to as “PRSUs.” PRSUs generally cliff vest on January 1 of the third calendar year from the calendar year of the date of grant and the number of shares a participant will receive upon vesting is determined by a performance modifier, which is adjusted as a result of the financial performance of the Company. For PRSU awards granted during 2024 and thereafter, the financial performance of the Company will be determined based on the compound annual growth rate over a three-year performance period beginning on January 1 in the year of grant. For PRSU awards granted during 2023, the financial performance of the Company was determined based on the financial performance of the Company in the grant year, and any earned awards that remain outstanding are subject to time-based vesting conditions. For all PRSU awards granted, the performance modifier can vary between 0% (minimum) and 250% (maximum) of the target (100%) award amount. Compensation expense for PRSUs that cliff vest is recognized on a straight-line basis over the vesting period for the entire award.
A summary of the Company’s outstanding PRSUs is presented below:
| PRSUs | Weighted Average Grant-Date Fair Value | |||||||||||||
| PRSUs outstanding at December 31, 2024 | 1,041,538 | $ | 80.03 | |||||||||||
| Granted | 147,733 | $ | 135.80 | |||||||||||
| Vested | (295,890) | $ | 83.74 | |||||||||||
| Performance adjustment | — | $ | — | |||||||||||
| Forfeited | (18,291) | $ | 91.29 | |||||||||||
| PRSUs outstanding at December 31, 2025 | 875,090 | $ | 87.96 | |||||||||||
The following table summarizes information about PRSU awards:
| Year Ended | ||||||||||||||||||||
| December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| PRSU compensation expense | $ | 37,665 | $ | 35,707 | $ | 26,506 | ||||||||||||||
| Income tax benefit | $ | (12,323) | $ | (9,960) | $ | (10,767) | ||||||||||||||
The weighted-average grant-date fair value of PRSUs granted during the years ended December 31, 2024 and 2023 was $104.66 and $69.56, respectively.
The total fair value of PRSUs vested during the years ended December 31, 2025, 2024 and 2023 was $38.9 million, $35.4 million and $46.2 million, respectively.
PSU
Performance-based restricted stock units that are promises to issue actual shares of Class A common stock based on market conditions are referred to as “PSUs.” PSUs cliff vest on January 1 of the third calendar year from the calendar year of the date of grant and the number of shares a participant will receive upon vesting is determined by a performance modifier, which is adjusted as a result of the Company’s total shareholder return over a three-year performance period. The performance modifier for PSUs can vary between 0% (minimum) and 250% (maximum) of the target (100%) award amount. The grant date fair value of the PSUs is recognized as compensation expense on a straight-line basis over the vesting period for the entire award, regardless of the number of shares received by the participant at vesting.
A summary of the Company’s outstanding PSUs is presented below:
| PSUs | Weighted Average Grant-Date Fair Value | |||||||||||||
| PSUs outstanding at December 31, 2024 | 312,058 | $ | 110.69 | |||||||||||
| Granted | 65,532 | $ | 216.02 | |||||||||||
| Vested | — | $ | — | |||||||||||
| Performance adjustment | 353,866 | $ | 98.33 | |||||||||||
| Forfeited | — | $ | — | |||||||||||
| PSUs outstanding at December 31, 2025 | 731,456 | $ | 114.15 | |||||||||||
The following table summarizes information about PSU awards:
| Year Ended | ||||||||||||||||||||
| December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| PSU compensation expense | $ | 15,374 | $ | 12,213 | $ | 7,043 | ||||||||||||||
| Income tax benefit | $ | (3,750) | $ | (2,999) | $ | (1,714) | ||||||||||||||
The weighted-average grant-date fair value of PSUs granted during the years ended December 31, 2024 and 2023 was $149.00 and $98.33, respectively.
There were no PSUs vested during the years ended December 31, 2024 and 2023.
The significant assumptions used to estimate the fair value of PSUs using the Monte Carlo simulation model were as follows:
| March 17, 2025 PSU Grant | March 15, 2024 PSU Grant | March 15, 2023 PSU Grant | ||||||||||||||||||
| Maturity (years) | 2.8 | 2.8 | 2.8 | |||||||||||||||||
| Annualized volatility | 25.04 | % | 26.63 | % | 28.81 | % | ||||||||||||||
| Risk-free interest rate | 3.95 | % | 4.44 | % | 3.77 | % | ||||||||||||||
Options
Prior to the IPO, the Company granted the Special Option Award to management and other employees and granted additional options subsequent to the IPO in July 2019 and December 2019, in each case under the Option Plan. Each option award was scheduled to vest one half based solely on the passage of time and one half only if the Company achieved certain performance targets. The options had a four-year graded vesting schedule, with accelerated vesting for the time-based Special Option Award options originally scheduled to vest in years and that were accelerated upon completion of the IPO. The option stock-based compensation expense recognition commenced upon the completion of the IPO during the second quarter of 2019 and were fully vested and fully expensed by the first quarter of 2024.
The Company can elect to net-settle exercised options by reducing the shares of Class A common stock to be issued upon such exercise by the number of shares of Class A common stock having a fair market value on the date of exercise equal to the aggregate option price and withholding taxes payable in respect of the number of options exercised. The Company may then pay these employee payroll taxes from the Company’s cash.
A summary of the Company’s outstanding options is presented below:
| Options | Weighted Average Grant-Date Fair Value | Weighted Average Exercise Price | ||||||||||||||||||
| Options outstanding at December 31, 2024 | 343,011 | $ | 1.93 | $ | 20.59 | |||||||||||||||
| Granted | — | $ | — | $ | — | |||||||||||||||
| Exercised | (12,000) | $ | 1.80 | $ | 20.59 | |||||||||||||||
| Forfeited | — | $ | — | $ | — | |||||||||||||||
| Expired | — | $ | — | $ | — | |||||||||||||||
| Options outstanding at December 31, 2025 | 331,011 | $ | 1.93 | $ | 20.59 | |||||||||||||||
All options outstanding as of December 31, 2025 were fully vested and exercisable.
The following table summarizes information about option awards:
| Year Ended | ||||||||||||||||||||
| December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Options compensation expense | $ | — | $ | 133 | $ | 1,264 | ||||||||||||||
| Income tax benefit | $ | (227) | $ | (11,984) | $ | (18,073) | ||||||||||||||
There were no options granted during the years ended December 31, 2024 and 2023.
The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $1.0 million, $53.3 million and $77.4 million, respectively.
The total intrinsic value of all options outstanding as of December 31, 2025 was $28.8 million. The weighted average remaining contractual life of all options outstanding as of December 31, 2025 was 2.8 years.
RSUs and RSAs
RSUs are promises to issue shares of Class A common stock at the end of a vesting period. RSAs are issued shares of restricted Class A common stock that are released to an employee at the end of a vesting period. RSUs granted to employees generally vest one-third each year over a three-year period. RSAs vest at the end of a two-year period. RSUs granted to non-employee directors generally vest after one year. The grant-date fair value of RSUs and RSAs is amortized into expense on a straight-line basis over the requisite service period for the entire award, with compensation cost recognized to date at least equal to the measured cost of vested tranches.
A summary of the Company’s outstanding RSUs and RSAs is presented below:
| RSUs and RSAs | Weighted Average Grant-Date Fair Value | |||||||||||||
RSUs and RSAs outstanding at December 31, 2024 (1) | 1,163,899 | $ | 90.21 | |||||||||||
| Granted | 397,771 | $ | 134.36 | |||||||||||
| Vested | (545,909) | $ | 86.36 | |||||||||||
| Forfeited | (10,275) | $ | 109.21 | |||||||||||
| RSUs and RSAs outstanding at December 31, 2025 | 1,005,486 | $ | 109.57 | |||||||||||
(1)In connection with the closing of the ICD Acquisition, on August 1, 2024, the Corporation issued and sold 41,705 RSAs with a grant date fair value of $111.68 per share. The RSAs issued will cliff vest at the end of a two-year service period. Of the $4.7 million in RSAs issued, $3.3 million was allocated to consideration transferred for the business combination, relating to the pre-combination service period completed before the acquisition date, and $1.3 million will be amortized into stock-based compensation expense over the two-year service period required subsequent to the acquisition date.
The following table summarizes information about RSU and RSA awards:
| Year Ended | ||||||||||||||||||||
| December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| RSU and RSA compensation expense | $ | 50,498 | $ | 41,596 | $ | 30,315 | ||||||||||||||
| Income tax benefit | $ | (18,546) | $ | (12,781) | $ | (7,952) | ||||||||||||||
The weighted-average grant-date fair value of RSUs and RSAs granted during the years ended December 31, 2024 and 2023 was $106.45 and $69.70, respectively.
The total fair value of RSUs vested during the years ended December 31, 2025, 2024 and 2023 was $76.8 million, $48.2 million and $30.7 million, respectively. There were no RSAs vested during the years ended December 31, 2025, 2024 and 2023.
Compensation Expense
The Company records stock-based compensation expense for employees and directors in the consolidated statements of income, as a component of employee compensation and benefits. A summary of the Company’s total stock-based compensation expense relating to its PRSUs, PSUs, RSUs, RSAs and options, including the accelerated stock-based compensation expense discussed above, is presented below:
| Year Ended | ||||||||||||||||||||
| December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Total stock-based compensation expense | $ | 103,537 | $ | 89,649 | $ | 65,128 | ||||||||||||||
The stock-based compensation expense above excludes $2.8 million, $2.3 million and $1.5 million of stock-based compensation expense capitalized to software development costs during the years ended December 31, 2025, 2024 and 2023, respectively.
As of December 31, 2025, total unrecognized compensation expense related to unvested stock-based compensation arrangements and the expected recognition period are as follows:
PRSUs | PSUs | RSUs and RSAs | ||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Total unrecognized compensation cost | $ | 40,595 | $ | 14,030 | $ | 58,105 | ||||||||||||||
| Weighted-average recognition period (in years) | 1.6 | 1.7 | 1.4 | |||||||||||||||||
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.