STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

All stock-based awards are subject to the terms of the CareTrust REIT, Inc. and CTR Partnership, L.P. Incentive Award Plan (the “Plan”). The Plan provides for the granting of stock-based compensation, including stock options, restricted stock, performance awards, restricted stock units, relative total stockholder return-based stock awards and other incentive awards to officers, employees and directors in connection with their employment with or services provided to the Company. Under the Plan, 5,000,000 shares have been authorized for awards.

Under the Plan and for the periods presented, restricted stock awards (“RSAs”) typically vest in equal annual installments over a three year period. The board of directors granted certain RSAs in 2025 (“2025 RSAs”) which vest in one installment over one year. RSAs granted to non-employee members of the board of directors (“Board Awards”) vest in full on the earlier to occur of the Company’s next Annual Meeting of Stockholders or one year. Performance stock awards (“PSAs”) granted were subject to both time and performance based conditions and vest over a one-to three year period for PSAs granted in 2021. The amount of such PSAs that ultimately vested was dependent on the Company’s Normalized Funds from Operations (“NFFO”) per share, as defined by the Compensation Committee, meeting or exceeding a specified per share amount for the applicable vesting period. Relative total shareholder return units (“TSR Units”) granted since 2021 are subject to both time and market based conditions and cliff vest after a three-year period. The amount of such market awards that will ultimately vest is dependent on the Company’s total shareholder return (“TSR”) performance relative to a custom TSR peer group consisting of other publicly traded healthcare REITs and will range from 0% to 200% of the TSR Units initially granted. The RSAs and Board Awards are valued on the date of grant based on the closing price of the Company’s common stock, while the TSR Units are valued on the date of grant using a Monte Carlo valuation model. The vesting of certain awards may accelerate, as defined in the grant agreement, upon retirement, a change in control or other events.

The following table summarizes the status of the restricted stock award activity for the year ended December 31, 2025:


	Shares	Weighted Average Share Price
Unvested balance at December 31, 2024	552,999	$	23.86
Granted:
RSAs	148,495	27.29

Board Awards	20,148	28.79
Vested	(167,663)	21.52

Unvested balance at December 31, 2025	553,979	$	25.67

As of December 31, 2025, the weighted-average remaining vesting period of such awards was 1.0 year.

The following table summarizes the Company’s RSA and Board Award grants during the year ended December 31, 2025 (dollars in thousands, except per share amounts):


	Grants					Vested
	Shares	Weighted Average Share Price		Grant Date Fair Value		Shares	Vest Date Fair Value
During year ended December 31, 2025(1)
RSAs	148,495	$	27.29	$	4,052	145,951	$	3,868

Board Awards	20,148	28.79		580		21,712	610

(1)The Compensation Committee granted annual awards for 2026 in January 2026.

The following table summarizes the Company’s RSA and Board Award grants during the years ended December 31, 2024 and 2023 (dollars in thousands, except per share amounts):


	Grants
	Shares	Weighted Average Share Price		Grant Date Fair Value
During year ended December 31, 2024(1)
RSAs	225,815	$	27.38	$	6,183
Board Awards	21,712	23.95		520

During year ended December 31, 2023(2)
RSAs	166,122	$	22.41	$	3,722

Board Awards	24,768	19.38		480

(1)The Compensation Committee granted annual awards for 2025 in December 2024.

(2)The Compensation Committee granted annual awards for 2024 in December 2023.

The fair value of the TSR Units is estimated on the date of the grant using a Monte Carlo valuation model. The risk-free rate is based on the U.S. Treasury yield curve in effect at the grant date for the expected performance period. Expected volatility is based on historical volatility for the most recent weighted average period ending on the grant date for the Company and the selected TSR peer group, and is calculated on a daily basis. The following table reflects the weighted-average key assumptions used in this valuation for awards granted during the years ended December 31, 2024 and 2023:


	For the Year Ended December 31, 2024			For the Year Ended December 31, 2023
Risk-free interest rate	4.30		%	4.08		%
Expected stock price volatility	24.45		%	26.44		%
Expected service period	3.03 years			3.04 years
Expected dividend yield (assuming full reinvestment)	—		%	—		%
Weighted average fair value per share at date of grant	$	34.10		$	27.41

The total fair value of the TSR Units granted during the years ended December 31, 2024 and 2023 was $4.9 million and $2.9 million, respectively.

The following table summarizes the stock-based compensation expense recognized (dollars in thousands):


	For the Year Ended December 31,
	2025		2024		2023
Stock-based compensation expense	$	11,896	$	6,130	$	5,153

As of December 31, 2025, there was $8.7 million of unamortized stock-based compensation expense related to the unvested RSAs, Board Awards, and TSR Units.