VALERO ENERGY CORP/TXVLO

VALERO ENERGY CORP/TX Stock Compensation Disclosure

10-KFiled Feb 25, 20262 min read
14.    STOCK-BASED COMPENSATION

Overview
Our 2020 Omnibus Stock Incentive Plan (the 2020 OSIP) was approved by our stockholders on April 30, 2020. Under the 2020 OSIP, various stock and stock-based awards may be granted to employees, non-employee directors, and third-party service providers. The 2020 OSIP permits grants of (i) restricted stock and restricted stock units; (ii) stock options (including incentive and non-qualified stock options); (iii) stock appreciation rights; (iv) performance awards of cash, stock, or other securities; and (v) other stock-based awards (e.g., stock unit awards). Awards under the 2020 OSIP are granted at the discretion of our Board’s Human Resources and Compensation Committee (and, as applicable, approved by the independent directors) and may be subject to vesting or performance periods, performance goals, or other restrictions. As of December 31, 2025, 10,512,602 shares of our common stock remained available to be awarded under the 2020 OSIP.

The following table reflects activity related to our stock-based compensation arrangements (in millions):
Year Ended December 31,
202520242023
Stock-based compensation expense:
Restricted stock$73 $67 $69 
Performance awards44 33 38 
Total stock-based compensation expense$117 $100 $107 
Tax benefit recognized on stock-based compensation expense$16 $13 $14 
Tax benefit realized for tax deductions resulting from
exercises and vestings
— — 2 

Restricted Stock
Restricted stock is our most significant stock-based compensation arrangement. Employees, non-employee directors, and third-party service providers are eligible to receive restricted stock, which vests in accordance with individual written agreements between the participants and us, usually in equal annual installments over a period of three years beginning one year after the date of grant. The fair value of each share of restricted stock is equal to the market price of our common stock.
A summary of the status of our restricted stock awards is presented in the following table:





Number of
Shares
Weighted-
Average
Grant-Date
Fair Value
Per Share
Nonvested shares as of January 1, 2025795,220 $126.63 
Granted473,834 155.18 
Vested(527,122)128.53 
Forfeited(6,835)126.89 
Nonvested shares as of December 31, 2025735,097 143.67 

As of December 31, 2025, there was $54 million of unrecognized compensation cost related to outstanding unvested restricted stock awards, which is expected to be recognized over a weighted-average period of approximately two years.

The following table reflects activity related to our restricted stock:
Year Ended December 31,
202520242023
Weighted-average grant-date fair value per share of
restricted stock granted
$155.18 $131.68 $125.57 
Fair value of restricted stock vested (in millions)82 82 99 

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 26, 2025
2023Feb 22, 2024
2022Feb 23, 2023
2021Feb 22, 2022
2020Feb 23, 2021
2019Feb 26, 2020
2018Feb 28, 2019
2017Feb 28, 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.

Other Available Disclosures

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