Keurig Dr Pepper Inc.
For the period ended Dec 31, 2025. Filed Feb 24, 2026.
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FY2025 · Filed Feb 24, 2026
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. Stock-Based Compensation
- Stock-Based Compensation
The components of stock-based compensation expense are presented below:
| For the Year Ended December 31, | |||
|---|---|---|---|
| (in millions) | 2025 | 2024 | 2023 |
| Total stock-based compensation expense | $97 | $98 | $116 |
| Income tax benefit | (18) | (16) | (19) |
| Stock-based compensation expense, net of tax | $79 | $82 | $97 |
DESCRIPTION OF STOCK-BASED COMPENSATION PLAN
The 2019 Incentive Plan, under which employees and non-employee directors can be granted stock options, stock appreciation rights, stock awards, RSUs, and PSUs, was adopted in 2019 and expires in 2029. This incentive plan provides for the issuance of up to an aggregate of 27,425,720 shares of our common stock in stock-based compensation awards.
RSUs generally vest on the following schedule:
| Period Granted | Vesting Terms |
|---|---|
| RSUs granted in 2020 through 2024 | 5-year term with graded vesting as follows: 0% in year 1, 0% in year 2, 60% in year 3, 20% in year 4, 20% in year 5 |
| RSUs granted in 2025 | 4-year term with ratable vesting |
However, from time to time, we grant RSUs outside of the normal grant cycle which have different terms and vesting conditions. For all RSU grants, we recognize the expense ratably over the vesting period.
RESTRICTED SHARE UNITS
The table below summarizes RSU activity:
| RSUs | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (in millions) | |
|---|---|---|---|---|
| Balance as of December 31, 2024 | 12,488,799 | $29.70 | 2.0 | $401 |
| Granted | 5,040,348 | 29.93 | ||
| Vested and released | (2,930,040) | 30.40 | 96 | |
| Forfeited | (1,478,270) | 29.84 | ||
| Balance as of December 31, 2025 | 13,120,837 | 29.62 | 1.8 | 368 |
The weighted average grant date fair value for RSUs granted for the years ended December 31, 2025, 2024, and 2023 was $29.93, $26.66, and $30.60, respectively. The aggregate fair value of the RSUs vested and released for the years ended December 31, 2025, 2024, and 2023 was $89 million, $165 million, and $134 million, respectively.
As of December 31, 2025, there was $187 million of unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted average period of 2.8 years.
PERFORMANCE SHARE UNITS
In March 2025, the Remuneration & Nomination Committee of the Board approved PSU grants. Each PSU represents the right to receive one share of our common stock. The PSUs vest 3 years from the grant date, to the extent that the performance metrics are achieved during a predetermined performance period. The performance metrics include net sales growth and adjusted diluted EPS growth, as defined in the respective grant agreement, and are measured on a constant currency basis. The payout percentage for all PSUs granted ranges from 0% to 200%. Beginning in 2025, the fair value of PSUs is determined based on the number of units granted and the grant date price of common stock.
The table below summarizes PSU activity:
| PSUs | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (in millions) | |
|---|---|---|---|---|
| Balance as of December 31, 2024 | — | $— | 0.0 | $— |
| Granted | 464,354 | 30.61 | ||
| Vested and released | — | — | — | |
| Forfeited or expired | (17,536) | 30.71 | ||
| Balance as of December 31, 2025 | 446,818 | 30.60 | 2.2 | 13 |
As of December 31, 2025, there was $10 million of unrecognized compensation cost related to unvested PSUs that is expected to be recognized over a weighted average period of 2.2 years.
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