Xencor IncXNCR
Xencor Inc Stock Compensation Disclosure
Stock-Based Compensation
In June 2023, the Company’s Board of Directors (the “Board”) and stockholders approved the 2023 Equity Incentive Plan (the “2023 Plan”), which became effective on June 14, 2023, and replaced the 2013 Equity Incentive Plan (the “2013 Plan”). No additional awards may be granted under the 2013 Plan.
The 2023 Plan reserves 3,000,000 shares of common stock, plus any remaining shares available under the 2013 Plan as of the effective date. In addition, shares subject to outstanding awards under the 2013 Plan that expire, are forfeited, or otherwise terminate without being issued after June 14, 2023, will be added to the 2023 Plan share reserve. The 2023 Plan does not include an automatic annual share increase (an evergreen provision). On June 12, 2025, the Company’s stockholders approved the amendment and restatement of the 2023 Plan to increase the number of authorized shares reserved for issuance thereunder by 3,000,000 shares. As of December 31, 2025, the total number of shares of common stock reserved for issuance under the 2023 Plan is 19,878,573.
In addition, the Company’s Board and stockholders approved the ESPP, which became effective on December 5, 2013. As of December 31, 2025, the total number of shares of common stock available for issuance under the ESPP is 817,666.
The following table presents a summary of awards outstanding:
As of December 31, 2025 | |||||||||||||||||
| 2013 Plan | 2023 Plan | Total | |||||||||||||||
| Stock options | 8,625,426 | 4,331,166 | 12,956,592 | ||||||||||||||
| RSUs | 215,336 | 1,766,009 | 1,981,345 | ||||||||||||||
| 8,840,762 | 6,097,175 | 14,937,937 | |||||||||||||||
The following table summarizes stock-based compensation expenses included in operating expenses:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| General and administrative | $ | 18,257 | $ | 23,326 | $ | 19,239 | |||||||||||
| Research and development | 24,970 | 29,955 | 34,516 | ||||||||||||||
| $ | 43,227 | $ | 53,281 | $ | 53,755 | ||||||||||||
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Stock options | $ | 22,768 | $ | 31,147 | $ | 29,345 | |||||||||||
| RSUs | 19,594 | 21,276 | 23,167 | ||||||||||||||
| ESPP | 865 | 858 | 1,243 | ||||||||||||||
| $ | 43,227 | $ | 53,281 | $ | 53,755 | ||||||||||||
Stock Option Awards
The following table presents a summary of the stock option activity for the year ended December 31, 2025:
| Number of Shares Subject to Outstanding Options | Weighted Average Exercise Price (per share) | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding at December 31, 2024 | 12,370,081 | $ | 28.59 | 5.9 | $ | 10,386 | |||||||||||||||||
| Granted | 2,116,680 | 12.99 | |||||||||||||||||||||
| Exercised | (644,705) | 13.44 | |||||||||||||||||||||
| Forfeited | (885,464) | 26.61 | |||||||||||||||||||||
| Outstanding at December 31, 2025 | 12,956,592 | $ | 26.93 | 5.6 | $ | 5,156 | |||||||||||||||||
| Exercisable at December 31, 2025 | 9,324,358 | $ | 30.14 | 4.5 | $ | 867 | |||||||||||||||||
The aggregate intrinsic values represent the amount by which the market price of the underlying stock exceeds the exercise price of the option. The total intrinsic value of the options exercised during the years ended December 31, 2025, 2024, and 2023 were $2.0 million, $3.8 million, and $4.8 million, respectively.
As of December 31, 2025, the unrecognized compensation expense for all outstanding unvested stock options in the amount of $31.8 million will be recognized in the Company’s results of operations over a weighted average period of 2.2 years.
The per share weighted average grant date fair values of the stock options granted are $7.10, $12.06, and $15.98 for the years ended December 31, 2025, 2024 and 2023, respectively. The following table provides the weighted-average assumptions used in the calculation of grant date per share fair values of these stock options based on the Black-Scholes option pricing model:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Expected term (in years) (1) | 6.4 | 6.4 | 6.1 | ||||||||||||||
Expected volatility (2) | 51.2 | % | 50.2 | % | 50.5 | % | |||||||||||
Risk-free interest rate (3) | 4.1 | % | 4.2 | % | 4.2 | % | |||||||||||
Expected dividend yield (4) | — | % | — | % | — | % | |||||||||||
| Underlying stock price | $ | 12.99 | $ | 22.31 | $ | 30.02 | |||||||||||
(1) The computation of expected term was determined based on the option holders’ past exercise patterns.
(2) Volatility is estimated based on volatility average of the Company’s common stock price.
(3) The risk-free interest rate is based on that of the U.S. Treasury yields with equivalent terms in effect at the time of the grant.
(4) The dividend yield is zero as the Company currently does not pay a dividend.
Restricted Stock Units (“RSUs”)
The following table summarizes the activity of the Company’s RSUs:
| Restricted Stock Units | Weighted Average Grant Date Fair Value (Per unit) | ||||||||||
| Outstanding as of December 31, 2024 | 1,783,795 | $ | 25.52 | ||||||||
| Granted | 1,204,787 | 13.23 | |||||||||
| Vested | (843,722) | 26.53 | |||||||||
| Forfeited | (163,515) | 19.46 | |||||||||
Outstanding as of December 31, 2025 | 1,981,345 | $ | 18.01 | ||||||||
The fair value of RSUs was determined based on the closing price of the Company’s common stock on the grant date.
As of December 31, 2025, there was $20.0 million of total unrecognized compensation cost related to RSUs that is expected to be recognized over a weighted-average period of 1.8 years.
Employee Stock Purchase Plan
The following table provides the assumptions used in the calculation of grant date fair values of these shares issued under the Company’s ESPP based on the Black-Scholes option pricing model:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Expected term (in years) (1) | 0.5 - 2.0 | 0.5 - 2.0 | 0.5 - 2.0 | ||||||||||||||
Expected volatility (2) | 42.97% - 73.25% | 42.97% - 54.62% | 38.24% - 55.72% | ||||||||||||||
Risk-free interest rate (3) | 4.22% - 5.40% | 4.22% - 5.40% | 0.13% - 5.39% | ||||||||||||||
Expected dividend yield (4) | — | % | — | % | — | % | |||||||||||
(1) The computation of expected term was determined based on the option holders’ past exercise patterns.
(2) Volatility is estimated based on volatility average of the Company’s common stock price.
(3) The risk-free interest rate is based on that of the U.S. Treasury yields with equivalent terms in effect at the time of the grant.
(4) The dividend yield is zero as the Company currently does not pay a dividend.
As of December 31, 2025, there was no unrecognized pre-tax compensation expense related to outstanding shares issued under the Company’s ESPP.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 27, 2023 | |
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.