In March 2021, our Board of Directors adopted, and in May 2021, stockholders approved, the Realty Income 2021 Incentive Award Plan (the "2021 Plan") which replaced the Realty Income 2012 Incentive Award Plan (the "2012 Plan"). The 2021 Plan provides for the award to our directors, employees, and consultants of up to 8.9 million shares.

In connection with our merger with VEREIT in 2021, shares which remained available for issuance under the VEREIT, Inc. 2021 Equity Incentive Plan immediately prior to the closing of the merger (as adjusted by the Exchange Ratio) may be used for awards under the 2021 Plan and will not reduce the shares authorized for grant under the 2021 Plan, to the extent that awards using such shares (i) are permitted without stockholder approval under applicable stock exchange rules, (ii) are made only to VEREIT service providers or individuals who become Realty Income service providers following the date of the consummation of the merger, and (iii) are only granted under the 2021 Plan during the period commencing on the date of the consummation of the merger and ending on June 2, 2031. As a result, 6.2 million additional shares were available for issuance under the 2021 Plan.

The amount of share-based compensation costs recognized in 'General and administrative' in our consolidated statements of income and comprehensive income was $32.7 million, $26.2 million, and $21.6 million during the years ended December 31, 2024, 2023, and 2022, respectively.

In connection with the Merger, each outstanding Spirit restricted stock award and performance share award was cancelled and converted into Realty Income common stock, using the Exchange Ratio in accordance with the Merger Agreement. The issuance is excluded from the sections below, as the awards were not granted under the 2021 Plan. The aggregate fair value of fully vested Spirit awards converted into Realty Income common stock was $66.5 million, of which i.) $41.7 million related to pre-combination services and is included in the consideration transferred in the Merger and ii.) $24.8 million of expense was recognized at the date of acquisition in merger, transaction, and other costs, net related to the value attributable to post-combination services. For more details, please see note 2, Merger with Spirit Realty Capital, Inc.


	2024			2023			2022
	Number of shares	Weighted average price (1)		Number of shares	Weighted average price (1)		Number of shares	Weighted average price (1)
Outstanding nonvested shares, beginning of year	347,051	$	67.89	242,660	$	67.12	212,630	$	65.20
Shares granted	346,321	$	52.66	222,511	$	65.40	156,274	$	67.37
Shares vested	(151,977)	$	56.45	(110,634)	$	61.28	(118,160)	$	63.95
Shares forfeited	(27,096)	$	58.08	(7,486)	$	66.91	(8,084)	$	67.78
Outstanding nonvested shares, end of each period	514,299	$	61.54	347,051	$	67.89	242,660	$	67.12

For each of the years ended December 31, 2024, 2023, and 2022, we granted 40,000 shares of restricted stock to the independent members of our Board of Directors in connection with our annual awards in May of each year. The vesting period of these shares is up to three years, based on each director's years of service, and is subject to the director's continued service through each applicable vesting date. In addition, in February 2024, we granted 4,000 shares of restricted stock to a new member of our Board of Directors, which vest in equal parts over a three-year period. In connection with shares granted in each respective year, 16,000, 20,000, and 20,000 shares vested immediately and 28,000, 20,000, and 20,000 shares vest in equal parts over a three-year service period.

As of December 31, 2024, the remaining unamortized share-based compensation expense related to restricted stock totaled $19.7 million, which is being amortized on a straight-line basis over the service period of each applicable award. The expense amortization period for restricted stock is the lesser of the four-year service period or the period over which the awardee reaches the qualifying retirement age. For employees who have already met the qualifying retirement age, restricted stock is fully expensed at the grant date. The amount of share-based compensation is based on the fair value of the stock at the grant date. We define the grant date as the date the recipient and Realty Income have a mutual understanding of the key terms and conditions of the award, and the recipient of the grant begins to benefit from, or be adversely affected by, subsequent changes in the price of the shares.


	2024			2023			2022
	Number of restricted stock units	Weighted average price (1)		Number of restricted stock units	Weighted average price (1)		Number of restricted stock units	Weighted average price (1)
Outstanding nonvested shares, beginning of year	42,612	$	65.62	58,513	$	67.91	67,367	$	69.69
Shares granted	30,538	$	52.72	15,065	$	66.41	24,820	$	66.82
Shares vested	(22,640)	$	58.31	(29,492)	$	70.30	(26,917)	$	70.55
Shares forfeited	(11,979)	$	56.76	(1,474)	$	71.02	(6,757)	$	71.14
Outstanding nonvested shares, end of each period	38,531	$	62.45	42,612	$	65.62	58,513	$	67.91

As of December 31, 2024, the remaining share-based compensation expense related to the restricted stock units totaled $1.4 million and is being recognized on a straight-line basis over the service period. The amount of share-based compensation for the restricted stock units is based on the fair value of our common stock at the grant date. The expense amortization period for restricted stock units is the lesser of the four-year service period or the period over which the awardee reaches the qualifying retirement age. For employees who have already met the qualifying retirement age, restricted stock units are fully expensed at the grant date.

During 2024, 2023, and 2022, we granted annual performance share awards, as well as dividend equivalent rights, to our executive officers. The number of performance shares that vest for each of the three years is based on the achievement of the following performance goals:


	Weighting for year granted
Annual Performance Awards Metrics	2024		2023		2022
Total shareholder return (“TSR”) ranking relative to MSCI US REIT Index	50	%	55	%	55	%

Dividend per share growth rate	25	%	20	%	20	%
Net Debt-to-Pro Forma Adjusted EBITDAre Ratio	25	%	25	%	25	%

The annual performance shares vest 50% as of the date of which the plan administrator determines the achievement of the applicable goals during the applicable three-year performance period and the remaining 50% on January 1 of the following year, subject to continued service.


	2024			2023			2022
	Number of performance shares	Weighted average price (1)		Number of performance shares	Weighted average price (1)		Number of performance shares	Weighted average price (1)
Outstanding nonvested shares, beginning of year	561,769	$	72.64	470,880	$	73.37	388,139	$	68.09
Shares granted	309,363	$	55.25	215,040	$	73.32	174,940	$	77.73
Shares vested	(186,193)	$	57.16	(124,151)	$	76.59	(74,247)	$	59.62
Shares forfeited	—	$	—	—	$	—	(17,952)	$	58.59
Outstanding nonvested shares, end of each period	684,939	$	68.99	561,769	$	72.64	470,880	$	73.37