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EQUITY-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
EQUITY-BASED COMPENSATION
10. EQUITY-BASED COMPENSATION
The Company has a FTAI Aviation Ltd. 2025 Omnibus Incentive Plan (the “Incentive Plan”) which provides for the ability to award equity compensation awards in the form of stock options to eligible employees, consultants, directors, and other individuals who provide services to the Company, each as determined by the Compensation Committee of the Board of Directors.
As of December 31, 2025, the Incentive Plan provides for the issuance of up to 5.7 million shares. Equity-based compensation expense is reported within cost of sales and operating expenses.
Unvested equity-based awards are subject to forfeiture. The Company’s accounting policy is to record the impact of forfeitures when they occur.
Stock Options
In 2025, the Company did not issue any options to employees.
During the year ended December 31, 2024, in connection with the Company’s equity offerings (see Note 14 for details), the Company granted options to the Former Manager related to ordinary shares. The fair value of these options were recorded as an increase in equity with an offsetting reduction of capital proceeds received.
Additionally, the Company granted options to select employees related to 60,000 ordinary shares at an exercise price of $79.13, which had a grant date fair value of $2.1 million. The assumptions used in valuing the options were: a 4.52% risk-free rate, a 1.50% dividend yield, a 43.00% volatility and a 6.8 year term.
The following table presents information related to the options granted related to the Company’s shares:
Year Ended December 31,
20242023
Number of options60,000248,947
Fair value ($ millions)$2.1$2.1
Ranges
Expected volatility
The expected share volatility is based on an assessment of the volatility of the Company’s publicly traded ordinary shares
43.00 %-43.00 %37.88 %-37.88 %
Risk free interest rateThe risk-free rate is determined using the implied yield currently available on U.S. government bonds with a term consistent with the expected term on the date of grant.4.52 %-4.52 %3.47 %-3.47 %
Expected dividend yieldThe expected dividend yield is based on management’s current expected dividend rate.1.50 %-1.50 %6.26 %-6.26 %
Expected termExpected term used represents the period of time the options granted are expected to be outstanding.6.8 years10.0 years
Restricted Shares
During the year ended December 31, 2025, the Company issued the following restricted shares of the Company to select employees and officers of the Company:
In February 2025, the Company issued restricted shares to select officers and employees of the Company with a grant date fair value of $5.5 million, vesting over 3.0 years.
In November 2025, the Company issued restricted shares to select employees of the Company with a grant date fair value of $0.3 million, vesting over 4.0 years.
Additionally, the Company issued restricted shares to the directors of the Company with a grant date fair value of $0.8 million. These awards vest on the earlier of (i) the one-year anniversary of the grant date (May 29, 2026) or (ii) the date of the Company’s next annual general meeting of shareholders occurring after the grant date.
During the year ended December 31, 2024, the Company issued the following restricted shares of the Company to select employees and officers of the Company:
In May 2024, the Company issued restricted shares to (i) select officers with a grant date fair value of $5.5 million, vesting over 3.0 years and (ii) select employees with a grant date fair value of $5.7 million, vesting over 4.0 years.
In September 2024, the Company issued restricted shares to select employees with a grant date fair value of $0.8 million, vesting over 3.0 years.
All awards are subject to continued employment, with compensation expense recognized ratably over the vesting periods. The fair value was based on the closing price of the Company’s ordinary shares on the respective grant dates. The unrecognized compensation expense of restricted shares is expected to be recognized over a weighted-average period of 1.7 years.
Performance Shares
During the year ended December 31, 2025, the Company issued performance shares to select officers and employees of the Company with a grant date fair value of $4.4 million, vesting over a 3 year performance period based on the achievement of relative total shareholder return (50%) and cumulative diluted EPS (50%).
In November 2024, the Company granted up to 1,000,000 shares of performance shares to certain employees of the Company for which the ultimate number of units that will vest are determined based on the achievement of market conditions at the end of the stated performance period. The awards which are to be earned is based on the “Performance Level” of the Company’s Compound Annualized Total Shareholder Return (“CAGR”) for the Performance Period. The Performance Period is measured from November 5, 2024 through November 5, 2027. The number of shares earned could range from 0% to a maximum of 100%. The Earned Units from the Performance-based Awards become exercisable in three equal installments over a two-year period beginning with the completion of the Performance Period. The three equal installments of Earned Units vest on (i) November 5, 2027, (ii) November 5, 2028, and (iii) November 5, 2029. Compensation expense for the units is based on the estimated value of the awards on the grant date, and is recognized over the period from the grant date through the expected vest dates of each vesting condition.
The grant date fair value was $48.1 million and was determined using the Monte Carlo simulation, assuming a Geometric Brownian Motion (GBM) to model various simulation paths, which relies on highly subjective assumptions, including simulated share prices and simulated vesting percentages to simulate payoff paths. Key assumptions in this method include the historical and implied equity volatility, an implied volatility weight, and the risk-free rate of returns. The valuation model assumes dividends are immediately reinvested.
As of December 31, 2025, there was $36.8 million in unrecognized compensation cost related to unvested performance shares. This cost is expected to be recognized over a weighted-average period of 2.8 years.
The Consolidated Statements of Operations includes the following expense related to the Company’s equity-based compensation arrangements which are recorded in Operating expenses:
December 31,Remaining Expense To Be Recognized, If All Vesting Conditions Are MetWeighted Average Remaining Contractual Term
(in years)
202520242023
Stock options$508 $296 $— $1,270 7.7 years
Restricted shares7,448 3,756 1,638 14,012 1.7 years
Performance shares13,777 1,954 — 36,752 2.8 years
Total$21,733 $6,006 $1,638 $52,034 
The tables below provide details on the Company’s stock options, performance shares, and restricted shares:
Stock OptionsPerformance SharesRestricted Shares
OptionsWeighted Average Exercise/Issuance PriceSharesWeighted Average Grant date fair valueSharesWeighted Average Issuance Price
Outstanding as of December 31, 2024
112,343 $52.70 1,000,000 $48.11 481,138 $41.90 
Granted— — 28,441 153.80 51,898 128.98 
Less: exercised / vested10,000 14.77 — — 23,712 88.54 
Less: forfeited and canceled— — — — — — 
Outstanding as of December 31, 2025
102,343 1,028,441 509,324 
                                                                
Stock OptionsPerformance SharesRestricted Shares
As of December 31, 2025:
Weighted average exercise / issuance price (per share)$56.37 $51.03 $48.60 
Aggregate intrinsic value (in thousands)14,377 N/A24,753 
Weighted average remaining contractual term (in years)7.72.81.7