US Foods Holding Corp.USFD
US Foods Holding Corp. Stock Compensation Disclosure
SHARE-BASED COMPENSATION
Our long-term incentive plans provide for the grant of various forms of share-based awards to our directors, officers and other eligible employees.
In addition, the Company sponsors an employee stock purchase plan to provide eligible employees with the opportunity to acquire shares of our common stock at a discount of 15% of the fair market value of the common stock on the date of purchase, and as such, the plan is considered compensatory for federal income tax purposes. The Company recorded $5 million, $5 million and $4 million of share-based compensation expense for fiscal years 2025, 2024 and 2023, respectively, associated with the employee stock purchase plan.
Stock Options—Certain directors, executive officers and other eligible employees have been granted time-based stock options (the “Time-Based Options”) and performance-based options (the “Performance Options” and, together with the Time-Based Options, the “Options”) to purchase shares of our common stock. There were no options granted in fiscal years 2025, 2024 or 2023.
The Time-Based Options generally vest and become exercisable ratably over a three-year period from the date of the grant. Share-based compensation expense related to the Time-Based Options was zero, $1 million and $3 million for fiscal years 2025, 2024 and 2023, respectively.
The Performance Options generally vest and become exercisable ratably over a period of three years, from the date of the grant, provided that the Company achieves a predetermined financial performance condition established by the Compensation and Human Capital Committee of our Board of Directors for the respective award tranche. As all Performance Options granted have fully vested, no share-based compensation expense was recorded in fiscal year 2025, 2024 and 2023 related to the Performance Options.
The Options are nonqualified, with exercise prices equal to the estimated fair value of a share of common stock as of the date of the grant. Exercise prices range from $13.29 to $38.12 per share and generally have a 10-year life. The fair value of each Option is estimated as of the date of grant using a Black-Scholes option-pricing model.
The summary of Options outstanding and changes during fiscal year 2025 are presented below:
| Time Options | Performance Options | Total Options | Weighted- Average Fair Value | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Years | ||||||||||||||||||||||||||||||
| Outstanding as of December 28, 2024 | 1,643,562 | 79,828 | 1,723,390 | $ | 9.58 | $ | 25.52 | ||||||||||||||||||||||||||||
Granted | — | — | — | $ | — | $ | — | ||||||||||||||||||||||||||||
Exercised | (353,980) | (64,245) | (418,225) | $ | 8.31 | $ | 22.32 | ||||||||||||||||||||||||||||
Forfeited | (242) | (90) | (332) | $ | 8.27 | $ | 14.58 | ||||||||||||||||||||||||||||
| Outstanding as of December 27, 2025 | 1,289,340 | 15,493 | 1,304,833 | $ | 9.99 | $ | 26.55 | 3.6 | |||||||||||||||||||||||||||
| Vested and exercisable as of December 27, 2025 | 1,289,340 | 15,493 | 1,304,833 | $ | 9.99 | $ | 26.55 | 3.6 | |||||||||||||||||||||||||||
During fiscal years 2025, 2024 and 2023, Options were exercised with total intrinsic values of $22 million, $24 million and $22 million, respectively, representing the excess of fair value over the exercise price.
There was no unrecognized compensation expense related to unvested Options expected to vest as of December 27, 2025.
Restricted Stock Units—Certain directors, executive officers and other eligible employees have been granted time-based restricted stock units (the “Time-Based RSUs”), performance-based restricted stock units (the “Performance RSUs”) and market performance-based restricted stock units (the “Market Performance RSUs” and collectively with the Time-Based RSUs and Performance RSUs, the “RSUs”).
The Time-Based RSUs generally vest ratably over three years, starting on the anniversary date of the grant. For fiscal years 2025, 2024 and 2023, the Company recognized $43 million, $37 million and $35 million, respectively, in share-based compensation expense related to the Time-Based RSUs.
The Performance RSUs generally vest over a three-year period, as and to the extent predetermined performance conditions are met. The fair value of each share underlying the Performance RSUs is measured at the fair market value of our common stock on the date of grant and recognized over the vesting period for the portion of the award that is expected to vest. Compensation expense for the Performance RSUs is remeasured as of the end of each reporting period, based on management’s evaluation of whether it is probable that the performance conditions will be met. The Company recognized $20 million, $20 million and $11 million of share-based compensation expense in fiscal years 2025, 2024 and 2023, respectively, for the Performance RSUs.
During fiscal years 2021 and 2023, the Company granted Market Performance RSUs to certain executive officers and other eligible employees. These Market Performance RSUs awards generally vest at the end of a four-year performance period contingent on our achievement of certain total shareholder return performance (“TSR”) targets during the performance period. There were no Market Performance RSUs awards granted in 2022 or 2024.
During fiscal year 2025, the Company granted Market Performance RSUs that include both performance and market conditions (Stock Price Appreciation Growth) which vest at the end of a three-year performance period. The grant date fair value for all the Market Performance RSUs was estimated using a Monte-Carlo simulation. The Company recognized $15 million share-based compensation expense for 2025, de minimis expense in fiscal year 2024 and $2 million of expense in fiscal year 2023 for the Market Performance RSUs.
A summary of RSUs outstanding and changes during fiscal year 2025 is presented below.
| Time-Based RSUs | Performance RSUs | Market Performance RSUs | Total RSUs | Weighted- Average Fair Value | |||||||||||||||||||||||||
| Unvested as of December 28, 2024 | 1,845,908 | 1,210,968 | 310,884 | 3,367,760 | $ | 42.94 | |||||||||||||||||||||||
| Granted | 876,996 | 158,056 | 445,493 | 1,480,545 | $ | 84.58 | |||||||||||||||||||||||
| Vested | (870,075) | (428,025) | (290,233) | (1,588,333) | $ | 39.50 | |||||||||||||||||||||||
| Forfeited | (152,308) | (60,361) | (22,493) | (235,162) | $ | 60.91 | |||||||||||||||||||||||
| Unvested as of December 27, 2025 | 1,700,521 | 880,638 | 443,651 | 3,024,810 | $ | 60.22 | |||||||||||||||||||||||
The weighted-average grant date fair values for the RSUs granted in fiscal years 2025, 2024 and 2023 was $84.58, $54.03 and $35.71, respectively.
As of December 27, 2025, there was $101 million of unrecognized compensation cost related to the RSUs that is expected to be recognized over a weighted-average period of two years.
Total compensation expense related to share-based arrangements was $83 million, $63 million and $56 million for fiscal years 2025, 2024 and 2023, respectively, and is reflected in distribution, selling and administrative costs in the Company’s Consolidated Statements of Comprehensive Income. The total income tax benefit associated with share-based compensation recorded in the Company’s Consolidated Statements of Comprehensive Income was $17 million, $13 million and $12 million for fiscal years 2025, 2024 and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 17, 2022 | |
| 2021 | Feb 16, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 14, 2019 | |
| 2017 | Feb 27, 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.