Stock-based Compensation and Other Compensation

3 Months Ended

Mar. 31, 2026

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation and Other Compensation

Stock-based Compensation

On May 3, 2023, the Class A common stockholders of the Company approved the Air Lease Corporation 2023 Equity Incentive Plan (the “2023 Plan”). As of March 31, 2026, the number of shares of Class A Common Stock available for new award grants under the 2023 Plan was approximately 3,278,351. The Company has issued restricted stock units (“RSUs”) with four different vesting criteria: those RSUs that vest based on the attainment of book-value goals, those RSUs that vest based on the attainment of total shareholder return (“TSR”) goals (collectively, the “Performance-based RSU”), time-based RSUs that vest ratably over a time period of three years and RSUs that cliff vest at the end of a one-year or two-year period (collectively, the “Time-based RSUs”).

The Company recorded $5.1 million and $17.6 million of stock-based compensation expense related to RSUs for the three months ended March 31, 2026 and 2025, respectively.

Stock-based compensation cost for RSUs is measured at the grant date based on fair value and recognized over the vesting period. The fair value of time-based and book value RSUs is determined based on the closing market price of the Company’s Class A common stock on the date of grant, while the fair value of RSUs that vest based on the attainment of TSR goals is determined at the grant date using a Monte Carlo simulation model. Included in the Monte Carlo simulation model were certain assumptions regarding a number of highly complex and subjective variables, such as expected volatility, risk-free interest rate and expected dividends. To appropriately value the award, the risk-free interest rate is estimated for the time period from the valuation date until the vesting date and the historical volatilities were estimated based on a historical timeframe equal to the time from the valuation date until the end date of the performance period.

During the three months ended March 31, 2026, the Company issued 146,329 RSUs of which 41,212 were TSR RSUs and 105,117 were book value RSUs related to outstanding awards granted in 2023 for which the performance period ended December 31, 2025 based on the actual performance vesting achieved. The following table summarizes the activities for the Company’s unvested RSUs for the three months ended March 31, 2026:


	Unvested Restricted Stock Units
	Number of Shares	Weighted-Average Grant-Date Fair Value
Unvested at December 31, 2025	1,373,662	$	45.62
Granted	146,329	$	46.22
Vested (1)	(628,526)	$	44.47
Forfeited/canceled	—	$	—
Unvested at March 31, 2026	891,465	$	46.53
Expected to vest after March 31, 2026(2)	1,085,795	$	44.61


(1) During the three months ended March 31, 2026, 304,008 performance-based RSUs and 324,518 time-based RSUs vested.
(2) Expected to vest amounts for book value based RSUs reflect probability weighted vesting estimates, net of forfeitures, while expected to vest amounts for TSR based RSUs reflect target awards outstanding, adjusted only for forfeitures, as the market condition is incorporated into grant date fair value and not subsequently reassessed.

As of March 31, 2026, there was $18.9 million of unrecognized compensation expense related to unvested stock-based payments granted to employees. Total unrecognized compensation expense will be recognized over a weighted-average remaining period of 1.52 years.

In connection with the Merger, each Time-based RSU was converted into the contingent right to receive an amount in cash equal to the Merger Consideration. Each Performance-based RSU was converted into a contingent right to receive an amount in cash equal to the product of the Merger Consideration multiplied by the number of shares issuable based upon the greater of the target level of performance and the actual level of performance calculated as of the latest practicable date prior to the Merger. Each converted RSU is subject to the same vesting terms and conditions immediately prior to the Merger, except that Performance-based RSUs are no longer subject to any performance-based conditions.

Other Compensation

For the three months ended March 31, 2025, the Company recorded a $9.2 million payroll expense accrual resulting from the retirement of its former Chairman from his executive role, which will be payable in substantially equal installments in accordance with the Company’s normal payroll practices through May 2027. The additional payroll expense was included in selling, general and administrative expenses in the Company’s Consolidated Statements of Income, while the liability is included in Accrued interest and other payables on the Company’s Consolidated Balance Sheets.