VISTEON CORPVC
VISTEON CORP Stock Compensation Disclosure
Stock-Based Compensation
At the Company’s annual meeting of shareholders in June 2020, the shareholders approved the Visteon Corporation 2020 Incentive Plan (the “2020 Incentive Plan”), replacing the 2010 stock incentive plan and providing for an additional grant of up to 1.5 million shares. During the year ended December 31, 2024, the Company registered to provide an additional 1.3 million shares to the 2020 Incentive Plan. Pursuant to the 2020 Incentive Plan, the Company may grant shares of common stock for restricted stock awards (“RSAs”), restricted stock units (“RSUs”), non-qualified stock options ("Stock Options"), stock appreciation rights (“SARs”), performance-based share units ("PSUs"), and other stock-based awards. The Company's stock-based compensation instruments are accounted for as equity awards or liability awards based on settlement intention as follows:
•For equity settled stock-based compensation instruments, compensation cost is measured based on grant date fair value of the award and is recognized over the applicable service period. For equity settled stock-based compensation instruments, the delivery of Company shares may be on a gross settlement basis or a net settlement basis. The Company's policy is to deliver such shares using treasury shares or issuing new shares.
•Cash settled stock-based compensation instruments are subject to liability accounting. At the end of each reporting period, the vested portion of the obligation for cash settled stock-based compensation instruments is adjusted to fair value based on the period-ending market prices of the Company's common stock. Related compensation expense is recognized based on changes to the fair value over the applicable service period.
Generally, the Company's stock-based compensation instruments are subject to graded vesting and recognized on an accelerated basis. The settlement intention of the awards is at the discretion of the Organization and Compensation Committee of the Company's Board of Directors. These stock-based compensation awards generally provide for accelerated vesting upon a change-in-control, as defined in the 2020 Incentive Plan, which requires a double-trigger (which would require that the executive's employment terminate without "cause" or for "good reason" following a change in control). Accordingly, the Company may be required to accelerate recognition of related expenses in future periods in connection with the change-in-control events and subsequent changes in employee responsibilities, if any.
The total recognized and unrecognized stock-based compensation expense is as follows:
| Year Ended December 31, | Unrecognized Stock-Based Compensation Expense | ||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | December 31, 2025 | |||||||||||||||||||
| Performance based share units | $ | 14 | $ | 11 | $ | 9 | $ | 19 | |||||||||||||||
| Restricted stock units | 33 | 31 | 27 | 25 | |||||||||||||||||||
| Total stock-based compensation expense | $ | 47 | $ | 42 | $ | 36 | $ | 44 | |||||||||||||||
Performance Based Share Units
For the year ended 2025 the number of PSUs that will vest, ranging from 0% to 200% of the target award, is based on a combination of the Company's achievement of a pre-established relative total shareholder return goal compared to its peer group of companies and its average return on invested capital over a three-year period.
For the years ended 2023 and 2024 the number of PSUs that will vest, ranging from 0% to 200% of the target award, is based on the Company's achievement of a pre-established relative total shareholder return goal compared to its peer group of companies over a three-year period.
| A summary of PSU activity is provided below: | PSUs | Weighted Average Grant Date Fair Value | |||||||||
| (In thousands) | |||||||||||
Non-vested as of December 31, 2022 | 172 | $ | 128.28 | ||||||||
| Granted | 131 | 230.65 | |||||||||
| Vested | (137) | 84.52 | |||||||||
| Forfeited | (7) | 185.07 | |||||||||
Non-vested as of December 31, 2023 | 159 | 184.67 | |||||||||
| Granted | 98 | 140.39 | |||||||||
| Vested | (47) | 148.85 | |||||||||
| Forfeited | (2) | 175.48 | |||||||||
Non-vested as of December 31, 2024 | 208 | 171.36 | |||||||||
| Granted | 153 | 121.02 | |||||||||
| Vested | (53) | 162.71 | |||||||||
| Forfeited | (9) | 142.58 | |||||||||
Non-vested as of December 31, 2025 | 299 | $ | 148.05 | ||||||||
The grant date fair value for PSUs was determined using the Monte Carlo valuation model. Unrecognized compensation expense as of December 31, 2025 for PSUs to be settled in shares of the Company's common stock was $18 million and will be recognized over the remaining vesting period of approximately 1.6 years. The Company made cash settlement payments of less than $1 million for PSUs settled in cash during each of the years ended December 31, 2025, 2024, and 2023. Unrecognized compensation expense as of December 31, 2025 was less than $1 million for the non-vested portion of these awards and will be recognized over the remaining vesting period of approximately 1.9 years.
The Monte Carlo valuation model requires management to make various assumptions including the expected volatility, risk-free interest rate, and dividend yield. Volatility is based on the Company’s stock history using daily stock prices over a period commensurate with the expected life of the award. The risk-free rate was based on the U.S. Treasury yield curve in relation to the contractual life of the stock-based compensation instrument. The dividend yield was based on historical patterns and future expectations for Company dividends.
Weighted average assumptions used to estimate the fair value of PSUs granted during the years ended as of December 31, 2025 and 2024 are as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Expected volatility | 37.33 | % | 41.71 | % | |||||||
| Risk-free rate | 3.95 | % | 4.27 | % | |||||||
Restricted Stock Units
The grant date fair value of RSUs is measured as the market closing price of the Company's common stock on the date of grant. These awards generally vest in one-third increments on the grant date anniversary over a three-year vesting period.
| Share-Settled RSUs for the Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Granted | 425,000 | 309,000 | 221,000 | ||||||||||||||
| Weighted average grant date fair value | $87.34 | $110.33 | $159.95 | ||||||||||||||
Unrecognized compensation expense as of December 31, 2025 was $23 million for non-vested share-settled RSUs and will be recognized over the remaining vesting period of approximately 1.3 years.
| Cash-Settled RSUs for the Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Granted | 32,000 | 23,000 | 15,000 | ||||||||||||||
| Weighted average grant date fair value | $95.52 | $89.54 | $125.30 | ||||||||||||||
The Company made cash settlement payments of $1 million during the years ended December 31, 2025, 2024, and 2023. Unrecognized compensation expense as of December 31, 2025 was $2 million for non-vested cash settled RSUs and will be recognized on a weighted average basis over the remaining vesting period of approximately 1.5 years.
A summary of RSU activity is provided below:
| RSUs | Weighted Average Grant Date Fair Value | ||||||||||
| (In thousands) | |||||||||||
Unissued shares as of December 31, 2022 | 355 | $ | 113.41 | ||||||||
Granted | 236 | 157.81 | |||||||||
Vested | (161) | 107.89 | |||||||||
Forfeited | (45) | 136.95 | |||||||||
Unissued shares as of December 31, 2023 | 385 | 139.35 | |||||||||
| Granted | 331 | 108.92 | |||||||||
Vested | (178) | 134.06 | |||||||||
Forfeited | (45) | 126.62 | |||||||||
Unissued shares as of December 31, 2024 | 493 | 121.26 | |||||||||
| Granted | 442 | 87.91 | |||||||||
| Vested | (224) | 123.08 | |||||||||
| Forfeited | (54) | 102.31 | |||||||||
Unissued shares as of December 31, 2025 | 657 | $ | 99.74 | ||||||||
Beginning in the third quarter 2020, non-employee director RSU awards were granted under the terms and conditions of the 2020 Incentive Plan, and these awards vest approximately one year from the date of grant. Activity related to non-employee director grants under the 2020 Incentive Plan is included in RSU table above.
Additionally, as of December 31, 2025, the Company has approximately 98,000 outstanding RSU's awarded at a weighted average grant date fair value of $97.11 under the Non-Employee Director Stock Unit Plan which vest within one year or less but are not settled until the participant terminates board service. Total RSU's outstanding as of December 31, 2025 is approximately 755,000 inclusive of the table above.
Stock Options and Stock Appreciation Rights
Stock Options and SARs are recorded with an exercise price equal to the average of the high and low market price of the Company's common stock on the date of grant. The grant date fair value of these awards is measured using the Black-Scholes option pricing model. Stock Options and SARs generally vest in one-third increments on the grant date anniversary over a three-year vesting period and have an expiration date 7 or 10 years from the date of grant.
The Company received payments of $3 million, less than $1 million, and $6 million related to the exercise of Stock Options with total intrinsic value of options exercised of $1 million, less than $1 million, and $4 million during the years ended December 31, 2025, 2024, and 2023, respectively. There is no remaining unrecognized compensation expense for Stock Options as of December 31, 2025.
The Black-Scholes option pricing model requires management to make various assumptions including the expected term, risk-free interest rate, dividend yield, and expected volatility. The expected term represents the period of time that granted awards are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term, and anticipated employee exercise patterns. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of the stock-based compensation instrument. The dividend yield is based on historical patterns and future expectations for Company dividends. Volatility is based on the Company’s stock history using daily stock prices over a period commensurate with the expected life of the award.
No stock options or SARs were granted in 2025, 2024 or 2023. There are no SARs outstanding as of the years ended December 31, 2025, 2024 or 2023.
A summary of Stock Options activity is provided below:
| Stock Options | Weighted Average Exercise Price | ||||||||||
| (In thousands) | |||||||||||
| December 31, 2022 | 261 | $ | 87.62 | ||||||||
Exercised | (71) | 91.44 | |||||||||
| December 31, 2023 | 190 | 86.21 | |||||||||
Exercised | (2) | 66.98 | |||||||||
| December 31, 2024 | 188 | 86.42 | |||||||||
| Exercised | (36) | 72.52 | |||||||||
| Cancelled | (48) | 124.34 | |||||||||
| December 31, 2025 | 104 | $ | 73.63 | ||||||||
Exercisable at December 31, 2025 | 104 | $ | 73.63 | ||||||||
| Stock Options | ||||||||||||||||||||
| Exercise Price | Number Outstanding | Weighted Average Remaining Life | Weighted Average Exercise Price | |||||||||||||||||
| (In thousands) | (In years) | |||||||||||||||||||
$60.01 - $80.00 | 55 | 1.3 | $ | 66.98 | ||||||||||||||||
$80.01 - $100.00 | 49 | 0.3 | $ | 80.97 | ||||||||||||||||
| 104 | ||||||||||||||||||||
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.