Note 13. Shareholders’ Equity

Share buyback programs

On March 31, 2021, as subsequently amended on June 16, 2022, the Board of Directors authorized the purchase of up to $200.0 million of the Company’s outstanding common stock through June 14, 2024 (the “2021 Buyback Authorization”). On June 13, 2024, the Board of Directors authorized a new share buyback authorization, that commenced on June 17, 2024, for the purchase of up to $200.0 million (the “2024 Buyback Authorization”) of the Company’s outstanding common stock which expired on June 17, 2026. Purchases could have been made in private transactions or on the open market, including pursuant to purchase plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934. We did not make any purchases under the 2024 Buyback Authorization.

Prior to its expiration, a total of 3,553,961 shares were purchased under the 2021 Buyback Program at a total cost of $134.6 million. All purchased shares were retired and are reflected as a reduction of common stock for the par value of shares, with the excess applied as a reduction to retained earnings. No further shares can be purchased under the 2021 Buyback Authorization. As of May 2, 2026, prior to its expiration, the dollar value of shares that remained available to be purchased by the Company under the 2024 Buyback Program was $200.0 million.

Dividends

The Company paid dividends totaling $8.3 million, $20.4 million, and $19.9 million in fiscal 2026, fiscal 2025, and fiscal 2024, respectively. Dividends paid in fiscal 2026 and fiscal 2025 include $0.5 million and $0.9 million, respectively, of dividend equivalent payments for restricted stock units that vested.

Accumulated other comprehensive income (loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. A summary of changes in accumulated other comprehensive income (loss), net of tax is shown below:

Stock-based compensation

The Company has granted stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance stock units (“PSUs”) and stock awards to employees and non-employee directors under the Methode Electronics, Inc. 2022 Omnibus Incentive Plan (“2022 Plan”), the Methode Electronics, Inc. 2014 Omnibus Incentive Plan (“2014 Plan”) and the Methode Electronics, Inc. 2010 Stock Plan (“2010 Plan”). The Company’s stockholders approved the 2022 Plan on September 14, 2022. The Company can no longer make grants under the 2014 Plan and 2010 Plan.

Subject to adjustment as provided in the 2022 Plan and the 2022 Plan’s share counting provisions, the number of shares of the Company’s common stock that are available for all awards under the 2022 Plan is 5,550,000, less one share for every one share of common stock subject to an option or SAR award granted after April 30, 2022 under the 2014 Plan and 2.28 shares for every one share that was subject to an award other than an option or SAR granted after April 30, 2022 under the 2014 Plan. As of May 2, 2026, there were approximately 0.9 million shares available for award under the 2022 Plan.

Stock-based compensation expense

All stock-based payments to employees and directors are recognized in selling and administrative expenses on the consolidated statements of operations. Awards subject to graded vesting are recognized using the accelerated recognition method over the requisite service period. The table below summarizes the stock-based compensation expense related to the equity awards:

Restricted stock awards (RSAs)

Prior to May 2, 2026, the Company had certain RSAs outstanding which were subject to the achievement of an EBITDA measure for fiscal 2025. The following table summarizes the RSA activity:

The EBITDA performance measure for fiscal 2025 was not met and the outstanding RSAs were cancelled in June 2025. No RSAs remain outstanding as of May 2, 2026.

Restricted stock units (RSUs)

RSUs granted vest over a pre-determined period of time, up to five years from the date of grant. The fair value of the RSUs granted are based on the closing stock price on the date of grant and earn dividend equivalents during the vesting periods, which are forfeitable if the RSUs don’t vest. The following table summarizes RSU activity:

In July 2024, 160,401 RSUs were awarded in exchange for cash bonuses earned by certain employees. These RSUs vested in March 2025. As the expense associated with the cash bonuses was previously recognized in fiscal 2024, there was no incremental expense to be recognized for these RSUs. The Company reclassified $2.1 million from accrued employee liabilities to additional paid-in capital on its consolidated balance sheets related to the conversion of the cash bonuses to RSUs.

As of May 3, 2025, there were 147,329 RSUs that vested for which shares were issued in the first quarter of fiscal 2026. As of May 2, 2026, unrecognized share-based compensation expense for RSUs was $4.5 million which will be recognized over a weighted-average amortization period of 1.4 years.

Performance stock units (PSUs)

In fiscal 2025, the Company granted 208,661 PSUs which will vest upon the achievement of a total stockholder return (“TSR”) measure based on the growth in the Company’s stock price over a three-year performance period that ends April 29, 2028. In fiscal 2026, the Company granted 835,479 PSUs. The number of shares to be issued may range from 0% to a maximum of 200% of the PSUs granted. The Company estimated the grant date fair value of the PSUs using the Monte Carlo simulation model, as the TSR metric and changes in stock price are considered market conditions under ASC 718. The following table provides a summary of the weighted-average assumptions for the PSUs granted:

The PSUs earn dividend equivalents during the vesting periods, which are forfeitable if the PSUs do not vest. As of May 2, 2026, unrecognized share-based compensation expense for the PSUs was $4.9 million, which is expected to be recognized over a weighted average period of approximately 1.9 years. The following table summarizes PSU activity:

Non-employee director stock awards

The Company previously granted stock awards to its non-employee directors as a component of their compensation. The stock awards vested immediately upon grant. Non-employee directors could have elected to defer receipt of their shares under the Company’s non-qualified deferred compensation plan. The following table summarizes awards granted to non-employee directors:

During the third quarter of fiscal year 2026, the Company terminated its deferred compensation plan and it is expected to be fully liquidated by January 2027.

Stock options