Warner Bros. Discovery, Inc.WBD
Warner Bros. Discovery, Inc. Stock Compensation Disclosure
SHARE-BASED COMPENSATION
The Company has various incentive plans under which PRSUs, RSUs, and stock options have been issued. Upon exercise or vesting of stock awards, the Company issues new shares from its existing authorized but unissued shares. As of December 31, 2025, there were 136 million shares of common stock in reserves that were available for future issuance under the incentive plans.
Share-Based Compensation Expense
The table below presents the components of share-based compensation expense (in millions).
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| PRSUs | $ | 239 | $ | 89 | $ | 65 | ||||||||||||||
| RSUs | 457 | 415 | 375 | |||||||||||||||||
| Stock options | 73 | 53 | 60 | |||||||||||||||||
| Total share-based compensation expense | $ | 769 | $ | 557 | $ | 500 | ||||||||||||||
| Tax benefit recognized | $ | 115 | $ | 96 | $ | 97 | ||||||||||||||
Liability-classified share-based compensation awards include certain PRSUs. The Company recorded total liabilities for cash-settled and other liability-classified share-based compensation awards of $190 million and $66 million as of December 31, 2025 and 2024, respectively. The current portion of the liability for cash-settled and other liability-classified awards was $108 million and $27 million as of December 31, 2025 and 2024, respectively.
Share-Based Award Activity
PRSUs
The table below presents PRSU activity (in millions, except years and weighted-average grant date fair value).
| PRSUs | Weighted- Average Grant Date Fair Value | Weighted-Average Remaining Contractual Term (years) | Aggregate Fair Value | |||||||||||||||||||||||
| Outstanding as of December 31, 2024 | 9.8 | $ | 11.20 | 1.2 | $ | 104 | ||||||||||||||||||||
| Granted | 4.8 | $ | 11.79 | |||||||||||||||||||||||
| Performance adjustments | 2.6 | $ | 8.64 | |||||||||||||||||||||||
| Converted | (4.3) | $ | 9.57 | $ | 48 | |||||||||||||||||||||
| Forfeited | (0.1) | $ | 10.06 | |||||||||||||||||||||||
| Outstanding as of December 31, 2025 | 12.8 | $ | 11.87 | 1.0 | $ | 370 | ||||||||||||||||||||
| Vested and expected to vest as of December 31, 2025 | 12.8 | $ | 11.87 | 1.0 | $ | 370 | ||||||||||||||||||||
| Convertible as of December 31, 2025 | 2.5 | $ | 11.05 | 0.0 | $ | 72 | ||||||||||||||||||||
As of December 31, 2025, there was $73 million of unrecognized compensation cost related to PRSUs.
RSUs
The table below presents RSU activity (in millions, except years and weighted-average grant date fair value).
RSUs | Weighted- Average Grant Date Fair Value | Weighted-Average Remaining Contractual Term (years) | Aggregate Fair Value | |||||||||||||||||||||||
| Outstanding as of December 31, 2024 | 78.8 | $ | 11.41 | 1.6 | $ | 835 | ||||||||||||||||||||
| Granted | 43.0 | $ | 11.13 | |||||||||||||||||||||||
| Vested | (31.5) | $ | 12.69 | $ | 388 | |||||||||||||||||||||
| Forfeited | (6.1) | $ | 10.42 | |||||||||||||||||||||||
| Outstanding as of December 31, 2025 | 84.2 | $ | 10.81 | 1.2 | $ | 2,432 | ||||||||||||||||||||
| Vested and expected to vest as of December 31, 2025 | 84.2 | $ | 10.81 | 1.2 | $ | 2,432 | ||||||||||||||||||||
As of December 31, 2025, there was $457 million of unrecognized compensation cost related to RSUs, of which $11 million is related to cash settled RSUs. Stock settled RSUs are expected to be recognized over a weighted-average period of 1.2 years, and cash settled RSUs are expected to be recognized over a weighted-average period of 1.0 years.
Stock Options
The table below presents stock option activity (in millions, except years and weighted-average exercise price).
| Stock Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (years) | Aggregate Intrinsic Value | |||||||||||||||||||||||
| Outstanding as of December 31, 2024 | 36.0 | $ | 30.90 | 2.7 | $ | 8 | ||||||||||||||||||||
| Granted | 25.1 | $ | 10.31 | |||||||||||||||||||||||
| Exercised | (2.1) | $ | 13.96 | $ | 12 | |||||||||||||||||||||
| Forfeited | (12.9) | $ | 30.02 | |||||||||||||||||||||||
| Outstanding as of December 31, 2025 | 46.1 | $ | 20.68 | 4.8 | $ | 551 | ||||||||||||||||||||
| Vested and expected to vest as of December 31, 2025 | 46.1 | $ | 20.68 | 4.8 | $ | 551 | ||||||||||||||||||||
| Exercisable as of December 31, 2025 | 8.5 | $ | 33.92 | 2.6 | $ | 25 | ||||||||||||||||||||
The Company received cash payments from the exercise of stock options totaling $30 million, $0 million, and $0 million during 2025, 2024 and 2023, respectively. As of December 31, 2025, there was $139 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 2.4 years.
The fair value of stock options is estimated using the Black-Scholes option-pricing model or a Monte Carlo Simulation. The weighted-average assumptions used to determine the fair value of stock options as of the date of grant during 2025, 2024 and 2023 were as follows.
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Black-Scholes option-pricing model | ||||||||||||||||||||
| Risk-free interest rate | 3.97 | % | 4.19 | % | 4.35 | % | ||||||||||||||
| Expected term (years) | 5.0 | 4.7 | 4.5 | |||||||||||||||||
| Expected volatility | 54.49 | % | 54.37 | % | 54.80 | % | ||||||||||||||
| Monte Carlo simulation | ||||||||||||||||||||
| Risk-free interest rate | 4.11 | % | N/A | N/A | ||||||||||||||||
Expected term (years) (1) | 5.0 | N/A | N/A | |||||||||||||||||
| Expected volatility | 55.34 | % | N/A | N/A | ||||||||||||||||
(1) The expected term represents the period from the grant date through the performance period.
The weighted-average grant date fair value of options granted during 2025, 2024 and 2023 was $5.29, $4.30 and $7.43, respectively, per option. The total intrinsic value of options exercised during 2025, 2024 and 2023 was $12 million, $0 million, and $0 million, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 22, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Mar 1, 2019 | |
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.