TWFG, Inc.TWFG

TWFG, Inc. Stock Compensation Disclosure

10-KFiled Mar 10, 20263 min read
STOCK-BASED COMPENSATION
2024 Omnibus Incentive Plan
On July 17, 2024, the Company adopted the 2024 Incentive Plan for its directors, officers, employees, consultants and advisors. The 2024 Incentive Plan authorizes the granting of stock options, restricted stock, RSUs, stock appreciation rights, and other stock-based awards. The Company has reserved 4,346,667 shares of Class A Common Stock for issuance under the 2024 Incentive Plan, with an option to increase the reserve annually pursuant to the terms of the 2024 Incentive Plan. During the year ended December 31, 2025, the Company granted 52,079 RSUs under the 2024 Incentive Plan and 39,143 PSUs under the 2024 Incentive Plan, and 3,928,788 shares of Class A Common Stock remain available for future grant. No other award types have been issued under the 2024 Incentive Plan to date.
The fair value of the restricted stock units under the 2024 Incentive Plan for awards granted at the time of the Company’s IPO were granted at the IPO price of $17.00 per share.
Stock-Based Compensation Expense
Stock-based compensation expense recorded in Salaries and employee benefits for the years ended December 31, 2025 and 2024 was $4.6 million and $2.2 million, respectively. There was no equity or equity-based compensation plan maintained by the Company prior to its IPO on July 19, 2024. See Note 1 Organization and Basis of Presentation for more information about the IPO.
Stock-Based Awards
RSUs
The Company withholds and sells shares of Class A Common Stock associated with net settlements to cover tax withholding obligations upon the vesting of RSUs for certain employees under its 2024 Incentive Plan. During the year ended December 31, 2025, 285,192 RSUs vested and the Company withheld 91,640 RSUs for $3.1 million, resulting in the net issuance of 193,552 shares of Class A Common Stock. The vesting of RSUs is shown net of this withholding on the Consolidated Statements of Changes in Redeemable Noncontrolling Interest and Stockholders’/Members’ Equity and Consolidated Statements of Cash Flows.
Stock-based awards granted in the period include RSUs with service-based vesting conditions. Outstanding RSUs and related activity for the years ended December 31, 2025 and 2024 were as follows:
Number of AwardsWeighted-Average Grant Date
Fair Value
Unvested balance - December 31, 2023— $— 
Granted429,190 $17.00 
Forfeited(9,255)$17.00 
Unvested balance - December 31, 2024419,935 $17.00 
Granted52,079 $30.88 
Vested(285,192)$17.00 
Forfeited(1,638)$17.00 
Unvested balance - December 31, 2025185,184 $20.90 
PSUs
Outstanding PSUs and related activity for the year ended December 31, 2025 were as follows:
Number of AwardsWeighted-Average Grant Date
Fair Value
Unvested balance - December 31, 2024— $— 
Granted39,143 $30.87 
Unvested balance - December 31, 202539,143 $30.87 
Summary of Unamortized Compensation Expense
For the year December 31, 2025, the Company estimated there to be $3.1 million of unamortized compensation expense related to all non-vested stock-based compensation arrangements granted under the Company’s stock-based compensation plans, based upon current projections of grants measured against performance criteria. This expense is expected to be recognized over a weighted-average period of 1.5 years.

Historical Timeline

Fiscal YearFiled
2025Mar 10, 2026Showing above
2024Mar 27, 2025

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&ELeasesSegmentsDebtCommitmentsNew Standards