ZIPRECRUITER, INC.ZIP
ZIPRECRUITER, INC. Stock Compensation Disclosure
Stock-Based Compensation
Total stock-based compensation expense is recorded in the Consolidated Statements of Operations as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cost of revenue | $ | 425 | $ | 611 | $ | 660 | |||||||||||
| Sales and marketing | 7,974 | 10,647 | 12,537 | ||||||||||||||
| Research and development | 22,715 | 33,604 | 35,352 | ||||||||||||||
| General and administrative | 16,532 | 19,591 | 35,686 | ||||||||||||||
| Total stock-based compensation | $ | 47,646 | $ | 64,453 | $ | 84,235 | |||||||||||
2012 and 2014 Equity Incentive Plans
Prior to adoption of the 2021 Equity Incentive Plan (the “2021 Plan”), the Company granted awards under the 2012 Equity Incentive Plan (the “2012 Plan”) or the 2014 Equity Incentive Plan (the “2014 Plan”, and together with the “2012 Plan”, the “Prior Plans”). All awards currently are granted from the 2021 Plan. However, the Prior Plans continue to govern the terms and conditions of the outstanding awards previously granted under the 2012 Plan and the 2014 Plan.
The Prior Plans permitted the grant of incentive stock options to employees and the grant of non-qualified stock options, restricted stock, restricted stock awards, RSUs, stock appreciation rights, performance units and performance shares to the Company’s employees, directors and consultants at the sole discretion of the board of directors. The Prior Plans also allowed for the administrator of the plan to include terms in an award agreement that the option holder may exercise in whole or part of the option prior to the full vesting of those options.
In connection with the Direct Listing, all outstanding options to purchase common stock issued pursuant to the Prior Plans became options to purchase an equivalent number of shares of Class B common stock and all outstanding RSUs issued pursuant to the Prior Plans became RSUs for an equivalent number of shares of Class B common stock.
2021 Equity Incentive Plan
In April 2021, the Company adopted the 2021 Plan, which became effective on May 14, 2021 in connection with the Direct Listing. The 2021 Plan permits the grant of incentive stock options to employees and the grant of non-qualified stock options, restricted stock, restricted stock awards, RSUs, stock appreciation rights, performance units, performance shares and stock bonus awards to the Company’s employees, directors, and consultants. Under the 2021 Plan, 10.7 million shares of Class A common stock were initially reserved for issuance. The number of shares initially reserved for issuance pursuant to awards under the 2021 Plan will be increased by (i) (a) any reserved shares not issued or subject to outstanding awards granted under the Prior Plans that cease to be subject to such awards by forfeiture or otherwise after the effective date, (b) shares issued under the Prior Plans before or after the effective date pursuant to the exercise of stock options that are, after the effective date, forfeited, (c) shares issued under the Prior Plans that are repurchased by the Company at the original purchase price or are otherwise forfeited, and (d) shares that are subject to stock options or other awards under the Prior Plans that are used to pay the exercise price of a stock option or withheld to satisfy the tax withholding obligations related to any award and (ii) an annual increase on January 1st of each year beginning in 2022 through 2031, by the lesser of (a) 5% of the number of shares of all classes of the Company’s common stock issued and outstanding on December 31 immediately prior to the date of increase or (b) such number of shares determined by the board of directors. Under the 2021 Plan, as of December 31, 2025, 36.3 million shares of Class A common stock were authorized, of which 18.8 million shares of Class A common stock were available for future issuance.
2021 Employee Stock Purchase Plan
In August 2021, the Company launched the ESPP. The ESPP provides for concurrent six-month offering and purchase periods beginning February 15 and August 15 of each year. The Company has initially reserved 1.3 million shares of its Class A common stock for issuance and sale under the ESPP. On January 1 of each of year, 2022 through 2031, the aggregate number of shares of Class A common stock reserved for issuance under the ESPP shall be increased automatically by the number of shares equal to 1% of the total number of outstanding shares of Class A common stock and shares of preferred stock of the Company (on an as converted to common stock basis) on the immediately preceding December 31; provided that the board of directors or compensation committee may in its sole discretion reduce the amount of the increase in any particular year. As of December 31, 2025, 4.5 million shares of Class A common stock were authorized of which 3.0 million shares of Class A common stock were available for future issuance.
The ESPP allows eligible employees the option to purchase shares of the Company's Class A common stock at a 15% discount through payroll deductions of their eligible compensation, subject to certain plan limitations. On each purchase date, eligible employees can purchase the Company’s Class A common stock at a price per share equal to 85% of the lesser of the fair value of the Company’s Class A common stock on (i) the offering date or (ii) the purchase date. The offering date is the first day of any concurrent offering and purchase period, and the purchase date is the last day of any concurrent offering and purchase period.
In January 2025, the compensation committee of the Company’s board of directors approved the suspension of the Company’s ESPP following the completion of the purchase of shares of its common stock for the offering period that ended February 14, 2025. As such, because there was no ongoing offering and purchase period as of December 31, 2025, there was no unrecognized stock-based compensation expense and the Company did not record any liability related to accumulated payroll deductions under the ESPP.
During the year ended December 31, 2025, 0.3 million shares of Class A common stock were purchased under the ESPP for an aggregate amount of $1.7 million. During the year ended December 31, 2024, 0.4 million shares of Class A common stock were purchased under the ESPP for an aggregate amount of $3.6 million. During the year ended December 31, 2023, 0.4 million shares of Class A common stock were purchased under the ESPP for an aggregate amount of $6.4 million. For the ESPP, the Company recorded stock-based compensation expense of $0.2 million, $1.4 million, and $2.1 million during the years ended December 31, 2025, 2024, and 2023, respectively.
Stock Options
Under the Prior Plans and the 2021 Plan (collectively, the “Plans”), options must be granted with exercise prices not less than the fair value of the underlying common stock on the date of grant. Options granted generally vest over periods of up to four years and expire ten years from the grant date. In 2019, the Company amended the terms and conditions of the Israeli Sub-Plan of the 2014 Plan. The Israeli Sub-Plan amendment allows the Company to grant options to Israeli employees or Israeli non-employees
with exercise prices less than the fair value of the underlying common stock on the date of grant. The Company’s policy is to issue new shares of common stock upon the exercise of stock options.
A summary of the Company’s stock option activity under Plans for the year ended December 31, 2025 is as follows (in thousands, except weighted average information):
| Number of Options Outstanding | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding at December 31, 2024 | 4,093 | $ | 2.37 | 2.6 | $ | 19,945 | |||||||||||||||||
| Granted | — | — | |||||||||||||||||||||
| Exercised | (2,645) | 1.13 | |||||||||||||||||||||
| Forfeited/Canceled | (190) | 5.36 | |||||||||||||||||||||
Outstanding at December 31, 2025 | 1,258 | $ | 4.51 | 2.3 | $ | 472 | |||||||||||||||||
Exercisable at December 31, 2025 | 1,258 | $ | 4.51 | 2.3 | $ | 472 | |||||||||||||||||
No stock options were granted by the Company during the years ended December 31, 2025, 2024, and 2023. The total intrinsic value of options exercised in 2025, 2024, and 2023 was $11.6 million, $7.9 million, and $22.2 million, respectively. This intrinsic value represents the difference between the fair value of the Company’s common stock on the date of exercise and the exercise price of each option. During the year ended December 31, 2025, the tax benefit realized from stock option exercises was approximately $0.1 million.
During the years ended December 31, 2025, 2024, and 2023, the Company recorded stock-based compensation expense for stock option awards of $0.1 million, $0.7 million, and $1.1 million, respectively, under the Plans. As of December 31, 2025, the Company has no remaining unvested stock options and no remaining stock-based compensation expense for its stock options.
Restricted Stock Units
The Company has granted RSUs to certain employees and directors of the Company. RSUs granted are subject to time-based service conditions and generally vest over a period of four years from the grant date. For all RSUs, excluding the CEO Performance Award discussed below, the Company recorded stock-based compensation expense of $47.3 million, $62.4 million, and $67.7 million during the years ended December 31, 2025, 2024, and 2023, respectively.
On April 19, 2021, the Company granted the CEO Performance Award, which provided for a grant of 1.4 million RSUs. The CEO Performance Award consisted of five vesting tranches with a vesting schedule based on achieving stock price targets ranging from $67.61 per share to $157.75 per share, which is calculated as the volume-weighted average over a 30-day trading window following the first day
the Company becomes a publicly traded company, as well as satisfying certain minimum service requirements of to five years. The award would expire ten years after the grant date.
| Tranche | Number of RSUs Eligible to Vest | Company Stock Price Target | Minimum Service Period (in years) | ||||||||
| 1 | 279,600 | $67.61 | 1 | ||||||||
| 2 | 279,600 | $82.63 | 2 | ||||||||
| 3 | 279,600 | $102.66 | 3 | ||||||||
| 4 | 279,600 | $127.70 | 4 | ||||||||
| 5 | 279,600 | $157.75 | 5 | ||||||||
The Company estimated the grant date fair value of this award using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation. A Monte Carlo simulation model also was used to estimate a derived service period for each of the five vesting tranches, which is the measure of the expected time to achieve each of the stock price targets. The various assumptions used in the Monte Carlo simulation included an expected dividend yield of zero, expected term of ten years, estimated volatility of 59%, and a risk-free interest rate of 1.6%. Using these inputs, the weighted average grant date fair value was estimated to be $16.34 per share, the weighted average derived service period of each tranche was estimated to be 4.1 years and ranged from 3.2 to 5.0 years, and the aggregate stock-based compensation expense was estimated to be $22.8 million over the derived service period of each tranche using a graded attribution method.
On December 21, 2023, the Company entered into the Cancellation Agreement with the CEO, which provided for the cancellation of the 1.4 million market-based RSUs included in the CEO Performance Award. As of the date of the Cancellation Agreement, none of the stock price targets set forth in the CEO Performance Award had been met so that all of the RSUs were unvested. The cancellation resulted in an acceleration of unrecognized stock-based compensation expense from future periods into the fourth quarter of 2023. Accordingly, a $7.5 million one-time non-cash expense was recorded in the year ended December 31, 2023 in general and administrative expenses within the Company’s Consolidated Statements of Operations. During the year ended December 31, 2023, the Company recorded stock-based compensation expense of $13.3 million related to the CEO Performance Award.
A summary of the Company’s RSU activity for the year ended December 31, 2025 is as follows (in thousands, except weighted average information):
| Number of Shares | Weighted Average Grant Date Fair Value Per Share | ||||||||||
Unvested at December 31, 2024 | 7,014 | $ | 14.85 | ||||||||
| Granted | 4,581 | 5.46 | |||||||||
| Vested | (3,664) | 13.61 | |||||||||
| Forfeited/Canceled | (1,374) | 13.62 | |||||||||
Unvested at December 31, 2025 | 6,557 | $ | 9.23 | ||||||||
The weighted-average grant date fair value per share of RSUs granted for the years ended December 31, 2025, 2024, and 2023 were $5.46, $11.41, and $20.03, respectively. The total fair value of RSUs vested during the years ended December 31, 2025, 2024, and 2023 was $19.7 million, $36.3 million, and $47.1 million, respectively.
As of December 31, 2025, total unrecognized stock-based compensation expense for unvested RSUs was $57.9 million, which is expected to be recognized over a weighted average period of 1.2 years. The Company had no outstanding performance-based RSUs as of December 31, 2025.
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.