UPBOUND GROUP, INC.UPBD
UPBOUND GROUP, INC. Stock Compensation Disclosure
Stock-Based Compensation
We maintain long-term incentive plans for the benefit of certain employees and directors. Our current and former plans consist of the 2021 Long-Term Incentive Plan (the “2021 Plan”), the 2016 Long-Term Incentive Plan (the “2016 Plan”), the 2006 Long-Term Incentive Plan (the “2006 Plan”), and the 2006 Equity Incentive Plan (the “Equity Incentive Plan”), which are collectively referred to as the “Plans.” All Plans prior to the 2021 Plan were previously expired upon approval of the superseding Plan, and any shares available for grant under the respective plans were canceled at the time of expiration.
On June 8, 2021, at the 2021 Annual Meeting of Stockholders, the stockholders approved the 2021 Plan. The 2021 Plan authorizes the issuance of a total of 5,000,000 shares of common stock. Any shares of common stock granted in connection with 2021 Plan awards will be counted against this limit as one share. No shares of common stock will be deemed to have been issued if (1) such shares covered by the unexercised portion of an option that terminates, expires, or is cancelled or settled in cash or (2) such shares are forfeited or subject to awards that are forfeited, canceled, terminated or settled in cash. In any calendar year, (1) no employee will be granted options and/or stock appreciation rights for more than 800,000 shares of common stock; (2) no employee will be granted performance-based equity awards under the 2021 Plan (other than options and stock appreciation rights), covering more than 800,000 shares of common stock. On June 6, 2023, at the 2023 Annual Meeting of Stockholders, our stockholders approved an amendment to the 2021 plan (the “Amended 2021 Plan”). The Amended 2021 Plan authorized the issuance of an additional 4,287,000 shares of common stock for a total of 9,287,000 shares of common stock. Excluding the increase in shares of common stock issuable pursuant to the Amended 2021 Plan, the terms of the Amended 2021 Plan are substantially identical to those of the 2021 Plan. As of December 31, 2025 and 2024, there were 2,420,939 and 2,072,822 shares allocated to equity awards outstanding in the Amended 2021 Plan, respectively.
Under the previously expired 2016 Plan, there were 424,205 and 539,203 shares, respectively, allocated to equity awards outstanding as of December 31, 2025 and 2024, respectively, in the 2016 Plan. The 2016 Plan expired on June 8, 2021 upon approval of the 2021 Plan.
Under the previously expired 2006 Plan and Equity Incentive Plan (formerly known as the Rent-Way, Inc. 2006 Equity Incentive Plan) there were 500 and 15,291 shares as of December 31, 2025 and 2024, respectively, allocated to outstanding equity awards under the 2006 Plan, and 0 and 8,500 shares as of December 31, 2025 and 2024, respectively, allocated to outstanding equity awards under the Equity Incentive Plan. The 2006 Plan and Equity Incentive Plan previously expired in 2016. Outstanding equity awards under these plans represent vested options that will expire at various times through 2026, unless exercised or canceled prior to the expiration date.
Options granted to our employees generally become exercisable over a period of 1 to 4 years from the date of grant and may be exercised up to a maximum of 10 years from the date of grant. Options granted to directors are immediately exercisable.
We grant time-vesting restricted stock units to certain employees that vest ratably over a three-year service period. We recognize expense for these awards using the straight-line method over the requisite service period based on the number of awards expected to vest. We also grant performance-based restricted stock units that vest between 0% and 200% based on our stock price performance relative to a market index using a total shareholder return formula established at the date of grant for the subsequent three-year period. We record expense for these awards over the requisite service period, net of the expected forfeiture rate, because the employee must maintain employment to vest in the award.
Stock-based compensation expense for the years ended December 31, 2025, 2024 and 2023 is as follows:
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Stock options | $ | 19 | $ | 340 | $ | 900 | |||||||||||
Restricted share units(1)(2)(3) | 45,349 | 35,734 | 161,216 | ||||||||||||||
| Total stock-based compensation expense | 45,368 | 36,074 | 162,116 | ||||||||||||||
| Tax benefit recognized in the Consolidated Statements of Operations | 4,992 | 5,483 | 5,168 | ||||||||||||||
| Stock-based compensation expense, net of tax | $ | 40,376 | $ | 30,591 | $ | 156,948 | |||||||||||
(1) Includes expense of $20.0 million recognized for the year ended December 31, 2025 in stock compensation expense related to 1,313,331 common shares issued to the former owners of Brigit as part of the Closing Stock Consideration subject to restricted stock agreements as described in Note B, and recorded to Other gains and charges in our Consolidated Statements of Operations. Shares issued as part of the Closing Stock Consideration for the acquisition of Brigit were not issued under the authorization of the 2021 Plan or any prior approved long-term incentive plan described above. See Note N for additional information.
(2) Includes expense of $4.9 million and $137.5 million for the years ended December 31, 2024 and 2023, respectively, in stock compensation expense related to 8,096,595 common shares issued to the former owners of Acima, as part of the Closing Stock Consideration subject to restricted stock agreements, and recorded to Other gains and charges in our Consolidated Statements of Operations. Shares issued as part of the Closing Stock Consideration for the acquisition of Acima Holdings were not issued under the authorization of the 2021 Plan or any prior approved long-term incentive plan described above. See Note N for additional information.
(3) Includes expense of $1.6 million and $5.1 million for the years ended December 31, 2025 and 2024, respectively, in stock compensation expense related to accelerated stock compensation due to the letter agreement entered into with the Company's former Chief Executive Officer and recorded to Other gains and charges in our Consolidated Statements of Operations. See Note N for additional information.
We issue new shares of stock to satisfy option exercises and the vesting of restricted stock units.
Information with respect to stock option activity related to the Plans for the year ended December 31, 2025 follows:
| Equity Awards Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Balance outstanding at January 1, 2025 | 562,994 | $ | 21.54 | ||||||||||||||||||||
Granted(1) | — | — | |||||||||||||||||||||
| Exercised | (113,604) | 10.78 | |||||||||||||||||||||
| Forfeited | (24,685) | 32.33 | |||||||||||||||||||||
Balance outstanding at December 31, 2025 | 424,705 | $ | 23.79 | 3.63 | $ | 592 | |||||||||||||||||
Exercisable at December 31, 2025 | 424,705 | $ | 23.79 | 3.63 | $ | 592 | |||||||||||||||||
(1) There were no options granted in 2025, 2024 or 2023.
The intrinsic value of options exercised during the years ended December 31, 2025, 2024, and 2023 was $1.4 million, $0.6 million, and $1.5 million, respectively, resulting in tax benefits of $0.5 million, $0.2 million, and $0.5 million, respectively, which are reflected as an outflow from operating activities and an inflow from financing activities in the Consolidated Statements of Cash Flows.
Information with respect to non-vested restricted stock unit activity follows:
| Restricted Awards Outstanding | Weighted Average Grant Date Fair Value | ||||||||||
Balance outstanding at January 1, 2025 | 2,072,822 | $ | 30.91 | ||||||||
Granted(1) | 3,000,791 | 27.76 | |||||||||
Vested(2) | (878,816) | 26.17 | |||||||||
| Forfeited | (591,860) | 27.63 | |||||||||
Balance outstanding at December 31, 2025 | 3,602,937 | $ | 29.98 | ||||||||
(1) Includes 1,313,331 shares issued during 2025 as part of the Closing Stock Consideration for the acquisition of Brigit, as described above.
(2) Includes 131,333 shares vested during 2025 as part of the Closing Stock Consideration for the acquisition of Brigit, as described above.
Restricted stock units are valued using the closing price reported by the Nasdaq Stock Market on the trading day immediately preceding the day of the grant. Unrecognized compensation expense for unvested restricted stock units at December 31, 2025, including unrecognized compensation for Closing Stock Consideration for the acquisition of Brigit, as described above, was approximately $35.2 million expected to be recognized over a weighted average period of 1.54 years.
Performance-based restricted stock units are valued by a third-party valuation firm using Monte Carlo simulations. Unrecognized compensation expense for unvested performance-based restricted stock units at December 31, 2025, was approximately $16.6 million expected to be recognized over a weighted average period of 1.79 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
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.