LTIP and Profit Sharing

Prior to April 28, 2026, certain awards (the “Profits Interest Awards”) entitled certain profit-sharing partners to a portion of the net profits earned by PSGP and PSPG. Profits Interest Awards did not represent a substantive class of equity under ASC 718, Compensation (“ASC 718”) and were accounted for as cash-based profit-sharing arrangements. As such, amounts distributed or allocated to profit-sharing partners were included in profit-sharing partner compensation in the Consolidated Statements of Operations.

Prior to April 28, 2026, awards under the Long-Term Incentive Plan (“LTIP” and the “LTIP Awards”) entitled certain other profit-sharing partners (the “LTIP Partners”) to cash distributions of management fee-based and performance-based net profits pursuant to the terms of their respective agreements and granted them a reduced percentage of their Profits Interest Awards upon retirement under certain circumstances as described in the LTIP. Generally, LTIP Partners’ LTIP Awards vested after 10 years of tenure as a profit-sharing partner. Each LTIP Partner held LTIP Awards in PSGP and PSPG in the same percentages.

The LTIP Awards were treated as a separate class of profits interests from the Profits Interest Awards. The LTIP Awards were accounted for based on their substance. Portions of the LTIP Awards where rights to distributions of profits were based fully on the discretion of Mr. Ackman, or any successor thereof, were in substance a profit-sharing arrangement and were therefore recorded within profit-sharing partner compensation. Other portions of the LTIP Awards, when fully vested, entitled LTIP Partners upon retirement to a distribution equal to the percentage outlined in each of their agreements in perpetuity (the “permanent profits-interests”) and represented a substantive class of equity. The fair value of such permanent profits-interests was recognized on a straight-line basis over a service period of up to 10 years. The amortization of these awards was included in profit-sharing partner compensation in the Consolidated Statements of Operations.

All cash distributions resulting from PSPG’s Profits Interest Awards and the non-permanent portion of PSPG’s LTIP Awards (collectively, the “non-permanent profits-interests”) were recorded in profit-sharing partner compensation. The portion of cash distributions resulting from permanent profits-interests were recorded as capital distributions.

On April 28, 2026, in connection with the Combined Transaction, additional permanent profits-interests with a grant-date fair value of $60,966,153 were granted to certain LTIP Partners. No other grants of permanent profits-interests were made for the three and six months ended June 30, 2026 and 2025.

During the three and six months ended June 30, 2026, $567,551 and $752,958 (2025: $361,881 and $719,785) of permanent profits-interests that were granted in prior years vested, and no permanent profits-interests were forfeited. No further permanent profits-interests remain unvested as of April 28, 2026.

On April 28, 2026, in connection with the Combined Offering, the Profits Interest Awards and non-permanent portion of the LTIP Awards were converted to M Units, as defined and described in “M Unit Awards.” The permanent profits-interests were converted to vested PS Inc. shares, a conversion which did not require the recognition of new grants per ASC 718.

M Unit Awards

In connection with the Combined Offering, on April 28, 2026, PS Inc. approved and PSPG granted 86,493,537 of redeemable interests in PSPG (“M Units”) to the Company’s founder and 97,796,162 to the Company’s partners. For our partners, M Units were issued in replacement of their non-permanent profits-interests; shares of the Company’s common stock were issued directly in return for partners’ permanent profits-interests. Upon vesting, M Units may be redeemed, subject to certain conditions, for a proportional number of outstanding shares of the Company’s common stock held by PSPG. Accordingly, the shares associated with M Units are not dilutive to PS Inc.’s 400 million shares of common stock outstanding.

The M Units held by the Company’s founder are fully vested upon issuance and not subject to vesting or forfeiture. The M Units held by each other recipient are subject to vesting and forfeiture over a requisite service period. The standard vesting schedule provides for vesting at December 31 of each year, with vesting of (i) 6.25% at each December 31 in years 1 to 4, (ii) 8.33% in years 5 to 7, and (iii) vesting 16.67% in years 8 to 10. If a recipient of M Units terminates as a result of death or disability, or is terminated without cause, such recipient shall be entitled to catch-up vesting as if their vesting schedule provided for annual vesting on a straight-line basis over 10 years (i.e., 10% each year end). One recipient has a condensed vesting schedule, which follows the aforementioned schedules except that it has a cliff vest of all unvested M Units in year 5. Subject to certain requirements, recipients will also receive prorated vesting for the elapsed portion of the year in which their applicable termination occurs. In addition, recipients of unvested M Units will be entitled to accelerated vesting of 100% of their unvested M Units in the event that PSPG is subject to a qualifying change in control, dissolution or liquidation.

Restricted Stock Units (“RSUs”)

In connection with the IPO, the Company established the Pershing Square Inc. 2026 Equity Incentive Plan (the “Equity Incentive Plan”) under which 20,000,000 shares of common stock were reserved in order to compensate and incentivize the Company’s employees and non-employee service providers. On April 28, 2026, the Company granted 2,816,800 RSUs (“IPO Awards”) to be accounted for under ASC 718. Each RSU entitles the holder to receive one share of the Company’s common stock upon vesting, subject to the holder’s continued service through the applicable vesting date. For employees subject to withholding tax, the Company will withhold a portion of their vested shares to cover the taxes owed and deliver only the remaining “net” shares to the holder (“net settlement”). The standard vesting schedule provides for vesting at December 31 of each year, with vesting of (i) 6.25% at each December 31 in years 1 to 4, (ii) 8.33% in years 5 to 7, and (iii) 16.67% in years 8 to 10. However, certain employees and non-employees achieve full vesting at December 31, 2026 or December 31, 2031.

From time to time after the IPO, the Company may also grant additional RSU awards under the Equity Incentive Plan. On June 4, 2026, HHH completed its acquisition of Vantage Group Holdings Ltd. In anticipation of this acquisition, Marc Grandisson, former CEO of Arch Capital Group Ltd., agreed to serve as a strategic adviser to PS Inc. and its affiliates, including PSCM, effective March 5, 2027. As compensation for these services, PS Inc. agreed to grant Mr. Grandisson 400,000 RSUs to be legally granted on April 1, 2027 (“Strategic Advisor Award”). These RSUs will vest over approximately a three year period, beginning on April 1, 2027 and ending on February 1, 2030. Under ASC 718, the grant date is deemed to be April 28, 2026. However, the Company will recognize the cost of the awards on a straight-line basis over the period in which Mr. Grandisson is providing services, corresponding to the legal vesting period.

As of June 30, 2026, the unrecognized compensation expense related to the M Units and RSU Awards is expected to be recognized over the weighted average remaining service period of 9.23 years and 8.15 years, respectively. No shares were withheld to satisfy employee tax obligations related to the RSUs during the three and six months ended June 30, 2026.