UNIVERSAL ELECTRONICS INCUEIC
UNIVERSAL ELECTRONICS INC Stock Compensation Disclosure
Stock-Based Compensation
Stock-based compensation expense for each employee and director is presented in the same statement of operations caption as their cash compensation. Stock-based compensation expense by statement of operations caption and the related income tax benefit were as follows:
| Year Ended December 31, | |||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Cost of sales | $ | 55 | $ | 106 | $ | 125 | |||||||||||
| Research and development expenses | 567 | 769 | 1,098 | ||||||||||||||
| Selling, general and administrative expenses: | |||||||||||||||||
Employees | 3,402 | 5,379 | 6,980 | ||||||||||||||
Outside directors | 1,074 | 446 | 606 | ||||||||||||||
| Total employee and director stock-based compensation expense | $ | 5,098 | $ | 6,700 | $ | 8,809 | |||||||||||
| Income tax benefit | $ | 767 | $ | 1,026 | $ | 1,369 | |||||||||||
Restricted Stock
Non-vested restricted stock award activity was as follows:
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Shares (in 000's) | Weighted-Average Grant Date Fair Value | Shares (in 000's) | Weighted-Average Grant Date Fair Value | Shares (in 000's) | Weighted-Average Grant Date Fair Value | ||||||||||||||||||||||||||||||
| Non-vested at beginning of the year | 595 | $ | 13.07 | 486 | $ | 21.66 | 376 | $ | 36.82 | ||||||||||||||||||||||||||
| Granted | 367 | 6.73 | 391 | 10.55 | 340 | 14.15 | |||||||||||||||||||||||||||||
| Vested | (362) | 14.48 | (264) | 24.85 | (211) | 35.77 | |||||||||||||||||||||||||||||
| Forfeited | (106) | 9.04 | (18) | 17.40 | (19) | 17.72 | |||||||||||||||||||||||||||||
| Non-vested at end of the year | 494 | $ | 8.25 | 595 | $ | 13.07 | 486 | $ | 21.66 | ||||||||||||||||||||||||||
As of December 31, 2025, we expect to recognize $2.7 million of total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards over a weighted-average life of 1.5 years.
Performance Stock
Our performance stock awards (PSUs) vest subject to a service condition over a three-year period and stock price-based market conditions over a to five-year performance period. PSU awards are divided into three vesting tranches. Each tranche will vest upon the later of the service retention date as set forth in the agreement (provided the employee is continuously employed by the Company through such date) and the achievement of the applicable volume weighted average share price goal. In the event the applicable service condition is not met or the applicable performance goals are not achieved during the performance period, any unvested PSUs will be forfeited.
Non-vested performance stock award activity was as follows:
| 2025 | 2024 | ||||||||||||||||||||||
| Shares (in 000s) | Weighted-Average Grant Date Fair Value | Shares (in 000s) | Weighted-Average Grant Date Fair Value | ||||||||||||||||||||
| Non-vested at beginning of the year | 116 | $ | 4.72 | — | $ | — | |||||||||||||||||
| Granted | 744 | 1.87 | 116 | 4.72 | |||||||||||||||||||
| Vested | — | — | — | — | |||||||||||||||||||
| Forfeited | (116) | 2.84 | — | — | |||||||||||||||||||
| Non-vested at end of the year | 744 | $ | 2.16 | 116 | $ | 4.72 | |||||||||||||||||
The assumptions we utilized in the Monte Carlo simulation model and the resulting weighted average fair value of performance stock grants were the following:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Weighted average fair value of grants | 1.87 | $ | 4.72 | ||||||||
| Risk-free interest rate | 3.71 | % | 4.08 | % | |||||||
| Expected volatility | 55.86 | % | 57.00 | % | |||||||
| Expected life in years | 2.86 | 2.73 | |||||||||
As of December 31, 2025, we expect to recognize $1.1 million of total unrecognized pre-tax stock-based compensation expense related to non-vested performance stock awards over a weighted-average life of 2.4 years.
Stock Options
Stock option activity was as follows:
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Options (in 000's) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in 000's) | Number of Options (in 000's) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in 000's) | Number of Options (in 000's) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in 000's) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outstanding at beginning of the year | 779 | $ | 35.67 | 901 | $ | 38.78 | 782 | $ | 44.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Granted | 280 | 3.07 | — | — | 235 | 24.77 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercised | — | — | $ | — | — | — | $ | — | — | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forfeited/canceled/expired | (203) | 38.68 | (122) | 58.52 | (116) | 46.59 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at end of the year (1) | 856 | $ | 24.29 | 4.96 | $ | 150 | 779 | $ | 35.67 | 3.12 | $ | — | 901 | $ | 38.78 | 3.67 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Vested and expected to vest at the end of the year (1) | 856 | $ | 24.29 | 4.96 | $ | 150 | 779 | $ | 35.67 | 3.12 | $ | — | 901 | $ | 38.78 | 3.67 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercisable at the end of the year (1) | 576 | $ | 34.61 | 2.54 | $ | — | 673 | $ | 37.24 | 2.79 | $ | — | 620 | $ | 44.06 | 2.60 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)The aggregate intrinsic value represents the total pre-tax value (the difference between our closing stock price on the last trading day of 2025, 2024 and 2023 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on December 31, 2025, 2024 and 2023. This amount will change based on the fair market value of our stock.
The assumptions we utilized in the Black-Scholes option pricing model and the resulting weighted average fair value of stock option grants were the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Weighted average fair value of grants | $ | 1.60 | $ | — | $ | 10.83 | |||||||||||
| Risk-free interest rate | 3.72 | % | — | % | 3.86 | % | |||||||||||
| Expected volatility | 54.46 | % | — | % | 45.89 | % | |||||||||||
| Expected life in years | 5.27 | 0.00 | 4.70 | ||||||||||||||
Significant option groups outstanding at December 31, 2025 and the related weighted average exercise price and life information were as follows:
| Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||||
| Range of Exercise Prices | Number Outstanding (in 000's) | Weighted-Average Remaining Contractual Term (in years) | Weighted-Average Exercise Price | Number Exercisable (in 000's) | Weighted-Average Exercise Price | |||||||||||||||||||||||||||
$2.97 to $3.21 | 280 | 9.92 | $ | 3.07 | — | $ | — | |||||||||||||||||||||||||
$24.77 to $34.56 | 411 | 2.83 | 27.66 | 411 | 27.66 | |||||||||||||||||||||||||||
$46.17 to $59.43 | 165 | 2.24 | 51.93 | 165 | 51.93 | |||||||||||||||||||||||||||
| 856 | 4.96 | $ | 24.29 | 576 | $ | 34.61 | ||||||||||||||||||||||||||
As of December 31, 2025, we expect to recognize $0.5 million of total unrecognized pre-tax stock-based compensation expense related to non-vested stock options over a remaining weighted-average life of 2.8 years.
Stock Incentive Plans
Our active stock-based incentive plan was adopted in 2018 ("Stock Incentive Plan"). Under the Stock Incentive Plan, we may grant restricted stock units, performance stock units, stock options, stock appreciation rights, or any combination thereof for a period of ten years from the approval date of each respective plan, unless the plan is terminated by resolution of our Board. No stock appreciation rights have been awarded under our Stock Incentive Plan as of December 31, 2025. Only directors and employees meeting certain employment qualifications are eligible to receive stock-based awards.
The grant price of restricted stock and stock option awards granted under our Stock Incentive Plan is the average of the high and low trades of our stock on the grant date. We prohibit the re-pricing or backdating of stock options. Restricted stock awards vest in various proportions over a - to three-year time period. Our stock options become exercisable in various proportions over a three-year time frame. Stock options have a maximum ten-year term. Our performance stock awards vest in various proportions over a three to five-year term, subject to a service condition and stock price-based market conditions.
Detailed information regarding our active Stock Incentive Plans was as follows at December 31, 2025:
| Name | Approval Date | Total Shares Available for Grant Under the Plan | Remaining Shares Available for Grant Under the Plan | Outstanding Shares Granted Under the Plan | ||||||||||||||||||||||
Amended and Restated 2018 Equity and Incentive Compensation Plan (1) | 6/11/2024 | 3,391,794 | — | 2,094,545 | ||||||||||||||||||||||
| — | 2,094,545 | |||||||||||||||||||||||||
(1)The 2018 Equity and Incentive Compensation Plan, as amended on June 8, 2021, was amended and restated on June 11, 2024 to create the Amended and Restated 2018 Equity and Incentive Compensation Plan which added an additional 1,000,000 shares.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 11, 2025 | |
| 2023 | Mar 14, 2024 | |
| 2022 | Mar 8, 2023 | |
| 2021 | Mar 4, 2022 | |
| 2020 | Mar 5, 2021 | |
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.