Share-Based and Other Compensation |
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| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based and Other Compensation | Share-Based and Other Compensation Share-Based Incentive Compensation Plan As of December 31, 2025, we maintained one share-based incentive compensation plan, the Kilroy Realty 2006 Incentive Award Plan, as amended (the “2006 Plan”). The Company has a currently effective registration statement registering 12.6 million shares of our common stock for possible issuance under our 2006 Plan. As of December 31, 2025, approximately 1.8 million shares were available for grant under the 2006 Plan. The calculation of shares available for grant is presented after taking into account a reserve to cover the vesting and payment of 2006 Plan awards that were outstanding on that date, including performance-based vesting awards at (i) levels actually achieved for the performance conditions (as defined below) for which the performance period has been completed, and (ii) at maximum levels for the performance conditions (as defined below) for which the performance period has not been completed. The Executive Compensation Committee of the Company’s Board of Directors (the “Executive Compensation Committee”) may grant the following share-based awards to eligible individuals, as provided under the 2006 Plan: incentive stock options, nonqualified stock options, restricted stock (nonvested shares), stock appreciation rights, performance shares, performance stock units, dividend equivalents, stock payments, deferred stock, restricted stock units, profit interest units, performance bonus awards, performance-based awards, and other incentive awards. For each award granted under our share-based incentive compensation programs, the Operating Partnership simultaneously issues to the Company a number of common units equal to the number of shares of common stock ultimately paid by the Company in respect of such awards. The Executive Compensation Committee generally grants RSU awards to certain officers of the Company under the 2006 Plan annually in the first quarter. A portion of these awards are subject to service and/or performance vesting conditions (“Performance-Based RSUs”) and the remainder are subject to only service vesting conditions (“Time-Based RSUs”). 2025, 2024, and 2023 Annual Performance-Based RSU Grants During each of the three years in the period ended December 31, 2025, the Executive Compensation Committee granted Performance-Based RSUs to certain officers of the Company under the 2006 Plan. The Performance-Based RSUs have a three-year performance measurement period. A target number of Performance-Based RSUs were awarded, and the final number of Performance-Based RSUs that vest (which may be more or less than the target number) will be based upon (i) during the first calendar year of the respective awards’ three-year performance measurement period, the achievement of a pre-set FFO per share goal that applies to 100% of the Performance-Based RSUs awarded (the “FFO Performance Condition”), and (ii) a performance measure that applies to 50% of the award based upon the Company’s average net debt to EBITDAre ratio for the three year performance period (the “Net Debt to EBITDAre Ratio Performance Condition”), and a market measure that applies to the other 50% of the award based upon the relative ranking of the Company’s total stockholder return for the three year performance period compared to the total stockholder returns of an established comparison group of companies over the same period (the “TSR Condition”). The Performance-Based RSUs are also subject to a three-year service vesting provision (the “Service Vesting Condition”) and are scheduled to cliff vest on the date the final vesting percentage is determined following the end of the three-year performance measurement period under the awards. The number of Performance-Based RSUs ultimately earned could fluctuate from the target number of Performance-Based RSUs granted based upon the levels of achievement for the above performance conditions. The estimate of the number of Performance-Based RSUs earned is evaluated quarterly during the performance period based on our estimate for each of the performance conditions relative to the applicable goals. Compensation expense for the Performance-Based RSU grants is recognized on a straight-line basis over the requisite service period for each participant, which is generally the three-year service period. Each Performance-Based RSU represents the right to receive one share of our common stock in the future, subject to, and as modified by, the Company’s level of achievement of the applicable performance conditions. The fair values for the awards subject to the TSR Condition were calculated using a Monte Carlo simulation pricing model based on the assumptions in the table below. The determination of the fair values of the Performance-Based RSUs take into consideration the likelihood of achievement of the TSR Condition and the share price on the grant date. The following table summarizes the estimated number of RSUs earned for the 2025 and 2024 Performance- Based RSUs and the actual number of RSUs earned for the 2023 Performance-Based RSUs and the assumptions utilized in the Monte Carlo simulation pricing models:
_____________________ (1)Estimated RSUs earned for the 2025 and 2024 Performance-Based RSUs are based on the actual achievement of the applicable FFO Performance Condition and estimated achievement of the Net Debt to EBITDA Ratio Performance Condition and the TSR Condition. The 2023 Performance-Based RSUs earned are based on actual achievement of the FFO Performance Condition, the Net Debt to EBITDA Ratio Performance Condition, and the TSR Condition upon completion of the performance measurement period at December 31, 2025. Summary of Performance-Based RSUs A summary of our Performance-Based RSUs activity from January 1, 2025 through December 31, 2025 is presented below:
____________________ (1)Effective 2025, management updated the presentation of the opening balance to reflect the performance adjustment related to Net Debt to EBITDA Ratio Performance Condition and the TSR Condition. (2)Represents performance adjustments above target based on the actual achievement for 2023 awards and estimated achievement for 2024 and 2025 awards. (3)Represents the issuance of dividend equivalents earned on the underlying RSUs. The dividend equivalents vest based on terms specified under the related RSU award agreements. (4)Outstanding nonvested RSUs as of December 31, 2025 represent the actual achievement of the 2023 Performance-Based RSUs and the estimated achievement of 2024 and 2025 Performance-Based RSUs as of December 31, 2025. Dividend equivalents earned will vest along with the underlying award and are also subject to changes based on the number of RSUs ultimately earned for each underlying award. A summary of our Performance-Based RSUs activity for the years ended December 31, 2025, 2024, and 2023 is presented below:
2025, 2024, and 2023 Time-Based RSU Grants During each of the three years in the period ended December 31, 2025, the Executive Compensation Committee granted Time-Based RSUs to certain officers of the Company under the 2006 Plan. The Time-Based RSUs are generally scheduled to vest in three equal annual installments. Compensation expense for the Time-Based RSUs is recognized on a straight-line basis over the requisite service period, which is generally the explicit service period. Each Time-Based RSU represents the right to receive one share of our common stock in the future, subject to continued employment through the applicable vesting date. Summary of Time-Based RSUs A summary of our Time-Based RSUs activity from January 1, 2025 through December 31, 2025 is presented below:
____________________ (1)Represents the issuance of dividend equivalents earned on the underlying RSUs. The dividend equivalents vest based on terms specified under the related RSU award agreements. A summary of our Time-Based RSUs activity for the years ended December 31, 2025, 2024, and 2023 is presented below:
(1) Total fair value of RSUs vested was calculated based on the quoted closing share price of the Company’s common stock on the NYSE on the day of vesting. Excludes the issuance of dividend equivalents earned on the underlying RSUs. The dividend equivalents vest based on terms specified under the related RSU award agreement. Share-Based Compensation Cost The total compensation cost for all share-based compensation programs was $24.0 million, $24.4 million, and $43.7 million for the years ended December 31, 2025, 2024, and 2023, respectively. Share-based compensation costs for the year ended December 31, 2023 includes $27.3 million of accelerated share-based compensation costs for our former CEO and former President. Of the total share-based compensation costs, $4.9 million, $6.8 million, and $6.9 million was capitalized as part of real estate assets for the years ended December 31, 2025, 2024, and 2023, respectively. As of December 31, 2025, there was approximately $26.5 million of total unrecognized compensation cost related to nonvested incentive awards granted under share-based compensation arrangements and outstanding as of December 31, 2025. Such amount is based in part upon the estimated future outcome of the performance metrics as of December 31, 2025, and the actual compensation cost ultimately recognized could increase or decrease from this estimate based upon actual performance results. These costs are expected to be recognized over a weighted-average period of 1.7 years.
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