WILLIAMS COMPANIES, INC.WMB

WILLIAMS COMPANIES, INC. Stock Compensation Disclosure

10-KFiled Feb 24, 20262 min read
Note 15 – Equity-Based Compensation
Williams’ Plan Information
The Williams Companies, Inc. 2007 Incentive Plan (the Plan) provides common-stock-based awards to both employees and nonmanagement directors. To date, 50 million new shares have been authorized for making awards under the Plan. The Plan permits the granting of various types of awards including, but not limited to, restricted stock units and stock options. At December 31, 2025, 13 million shares of common stock were reserved for issuance pursuant to existing and future stock awards, of which 7 million shares were available for future grants. At December 31, 2025, Williams had 0.3 million stock options that were both outstanding and exercisable.
Additionally, approximately 0.5 million shares were available for purchase at December 31, 2025 under Williams’ Employee Stock Purchase Plan.
Williams recognizes compensation expense on employee stock-based awards on a straight-line basis; forfeitures are recognized when they occur. Operating and maintenance expenses and General and administrative expenses include equity-based compensation expense in 2025, 2024, and 2023 of $93 million, $99 million, and $77 million, respectively. Income tax benefit recognized related to the stock-based compensation expense in 2025, 2024, and 2023 was $22 million, $24 million, and $19 million, respectively. Measured but unrecognized stock-based compensation expense at December 31, 2025, was $78 million, all of which related to restricted stock units. These amounts are expected to be recognized over a weighted-average period of 1.8 years.
Nonvested Restricted Stock Units
At December 31, 2025 and 2024, Williams had restricted stock units outstanding, including performance-based shares, of 5.1 million shares and 6.4 million shares, respectively. Restricted stock units generally vest after three years. Performance-based grants may vest at a range from zero percent to 200 percent of the original shares granted based on performance against a target. At December 31, 2025, there were 1.6 million performance-based shares outstanding.

Historical Timeline

Fiscal YearFiled
2025Feb 24, 2026Showing above
2021Feb 28, 2022

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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