Note 17. Share-Based Compensation (Notes)

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

17. Share-Based Compensation

The following table presents share-based compensation expense recognized in our consolidated statements of operations for the years ended December 31, 2025, 2024, and 2023 (in thousands):


	2025		2024		2023
Cost of sales	$	2,649	$	3,923	$	4,798
Selling, general and administrative	13,685		20,696		25,217
Research and development	2,888		3,502		4,133
Production start-up	1		(17)		71
Total share-based compensation expense	$	19,223	$	28,104	$	34,219

As of December 31, 2025, we had $22.1 million of unrecognized share-based compensation expense related to unvested restricted stock and performance units, which we expect to recognize over a weighted-average period of approximately 1.4 years. During the years ended December 31, 2025, 2024, and 2023, we recognized an income tax benefit in our consolidated statements of operations of $9.6 million, $12.2 million, and $19.3 million, respectively, related to share-based compensation expense, including excess tax benefits. We authorize our transfer agent to issue

new shares, net of shares withheld for taxes as appropriate, for the vesting of restricted stock and performance units or grants of unrestricted stock.

Share-Based Compensation Plans

During the year ended December 31, 2020, we adopted our 2020 Omnibus Plan, under which directors, officers, employees, and consultants of First Solar, Inc. (including any of its affiliates) are eligible to participate in various forms of share-based compensation. The 2020 Omnibus Plan is administered by the compensation committee (or any other committee designated by our board of directors), which is authorized to, among other things, determine the recipients of grants, the exercise price, and the vesting schedule of any awards made under the 2020 Omnibus Plan. Our board of directors may amend, modify, or terminate the 2020 Omnibus Plan without the approval of our stockholders, except for amendments that would increase the maximum number of shares of our common stock available for awards under the 2020 Omnibus Plan, increase the maximum number of shares of our common stock that may be delivered by incentive stock options, or modify the requirements for participation in the 2020 Omnibus Plan.

The 2020 Omnibus Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares, restricted stock units, performance units, cash incentive awards, performance compensation awards, and other equity-based and equity-related awards. The shares underlying any forfeited, expired, terminated, or canceled awards become available for new award grants. We may not grant awards under the 2020 Omnibus Plan after 2030, which is the tenth anniversary of the 2020 Omnibus Plan’s approval by our stockholders. As of December 31, 2025, we had 6,241,836 shares available for future issuance under the 2020 Omnibus Plan.

Restricted Stock and Performance Units

We issue shares to the holders of restricted stock units on the date the restricted units vest. The majority of shares issued are net of applicable withholding taxes, which we pay on behalf of our associates. As a result, the actual number of shares issued will generally be less than the number of restricted stock units granted. Prior to vesting, restricted stock units do not have dividend equivalent rights or voting rights, and the shares underlying the restricted stock units are not considered issued and outstanding.

In March 2020, May 2021, and March 2022, the compensation committee of our board of directors approved grants of performance units for key executive officers to be earned over multi-year performance periods, which ended in December 2022, December 2023, and December 2024, respectively. Vesting of the 2020, 2021, and 2022 grants of performance units was contingent upon the specific attainment targets of each grant, which targets included metrics such as contracted revenue, module wattage, return on capital, cost per watt, incremental average selling price, and operating income metrics. In March 2023, the compensation committee certified the achievement of the vesting conditions applicable to the 2020 grants, which approximated the target level of performance. In February 2024, the compensation committee certified the achievement of the vesting conditions applicable to the 2021 grants, which approximated the maximum level of performance. In February 2025, the compensation committee certified the achievement of the vesting conditions applicable to the 2022 grants, which approximated the maximum level of performance. Accordingly, each participant received one share of common stock for each vested performance unit granted, net of any tax withholdings.

In March 2023, the compensation committee approved additional grants of performance units for key executive officers to be earned over a multi-year performance period, which ended in December 2025. Vesting of the 2023 grants of performance units is contingent upon the relative attainment of target contracted revenue, production, and operating margin metrics, to be certified by the compensation committee in 2026.

In March 2024 and May 2025, the compensation committee approved additional grants of performance units for key executive officers; such grants are expected to be earned over a multi-year performance period ending in December 2026 and December 2027, respectively. Vesting of the 2024 and 2025 grants of performance units is contingent upon the specific attainment targets of each grant, which targets include metrics such as contracted revenue, production, incremental average selling price, operating margin, and technology development.

Vesting of performance units is also contingent upon the employment of program participants through the applicable vesting dates, with limited exceptions in case of death, disability, a qualifying retirement, or a change-in-control of First Solar. Outstanding performance units are included in the computation of diluted net income per share based on the number of shares that would be issuable if the end of the reporting period were the end of the contingency period.

The following is a summary of our restricted stock unit activity, including performance unit activity, for the year ended December 31, 2025:


	Number of Shares	Weighted-Average Grant-Date Fair Value
Unvested restricted stock units at December 31, 2024	814,338	$	132.00
Restricted stock units granted (1)	233,750	135.49
Restricted stock units vested	(340,563)	91.59
Restricted stock units forfeited	(76,504)	131.25
Unvested restricted stock units at December 31, 2025	631,021	$	155.19

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(1)Restricted stock units granted include the maximum amount of performance units available for issuance under our long-term incentive program for key executive officers and associates. The actual number of shares to be issued will depend on the relative attainment of the performance metrics described above.

We estimate the fair value of our restricted stock unit awards based on our stock price on the grant date. For the years ended December 31, 2024 and 2023, the weighted-average grant-date fair value for restricted stock units granted in such years was $158.63 and $210.45, respectively. The total fair value of restricted stock units vested during 2025, 2024, and 2023 was $31.2 million, $25.0 million, and $20.0 million, respectively.

Unrestricted Stock

During the years ended December 31, 2025, 2024, and 2023, we awarded 9,096, 9,645, and 11,246, respectively, of fully vested, unrestricted shares of our common stock, excluding amounts withheld for taxes, to the chair and independent members of our board of directors. Accordingly, we recognized $1.6 million, $1.9 million, and $2.1 million of share-based compensation expense for these awards during the years ended December 31, 2025, 2024, and 2023, respectively.