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Stock Incentive Plans
 9 Months Ended
Sep. 30, 2025
Share-Based Payment Arrangement [Abstract]  
Stock Incentive Plans Stock Incentive Plans
In March 2022, our Board of Directors approved the 2022 Long-Term Incentive Plan ("2022 Plan"), which initially authorized up to 10,000,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board. Awards granted after March 28, 2022 are issued out of the 2022 Plan, while awards granted under the 2016 Long-Term Incentive Plan continue to vest and options expire ten years from the date of grant. Our non-employee directors, officers and key employees are eligible to participate in the 2022 Plan, which allows for the issuance of, among other things, stock options, stock appreciation rights, restricted stock units, deferred stock units, performance units and dividend equivalent rights. Vesting periods for options, deferred stock units and restricted stock units generally range from three to five years. Options expire ten years from the date of grant. In April 2025, our Board of Directors adopted, subject to shareholder approval obtained in May 2025, an amendment to the 2022 Plan (the “Amended and Restated Plan”), primarily to increase the aggregate number of shares of common stock authorized for issuance by 10,000,000 shares, bringing the total of shares authorized under the plan to 20,000,000 shares. Stock-based compensation expense totaled $15,586,000 and $48,348,000 for the three and nine months, respectively, ended September 30, 2025, and $39,910,000 and $62,308,000 for the same respective periods in 2024.
During December 2021 and January 2022, we granted special non-recurring performance-based stock option and restricted stock awards to executives and key employees. During the quarter ended September 30, 2024, we determined that the performance goals were probable of being achieved, resulting in a cumulative catch up of stock compensation expense of $29,838,000 recognized in general and administrative expenses in the Consolidated Statements of Comprehensive Income.
October 2025 Approval of Ten Year Executive Continuity and Alignment Program
On October 26, 2025, our Board of Directors adopted the Ten Year Executive Continuity and Alignment Program (the “10 Year Program”). The Program is part of a broader reconfiguration of our executive compensation program, which includes new equity-based incentive awards and changes to our existing executive compensation programs and is intended to be the primary executive compensation program for our executive leadership team for the next decade. Under the 10 Year Program, an award of LTIP Units of Welltower OP, to each of our named executive officers (the "Executives" and such awards, the “Executive LTIP Unit Awards”) has been approved by our Board of Directors as described in more detail in item 5.02 of our Current Report on Form 8-K filed on October 27, 2025.
The Executive LTIP Unit Awards will be subject to restrictions on redemption and transferability, certain punitive repurchase mechanisms and to clawback in certain circumstances. The Executive LTIP Unit Awards, except in the case of termination of employment under certain circumstances or a Change in Corporate Control (generally, as defined in the Amended and Restated Plan), will not be redeemable for shares of Welltower common stock until October 31, 2030 at the earliest, at which point they will become redeemable in substantially equal monthly installments through September 30, 2035. One-half of the Executive LTIP Unit Awards (the “Performance-Based LTIP Units”) will be subject to forfeiture if certain predetermined performance milestones are not achieved over a five-year performance period commencing on October 6, 2025 and ending on October 5, 2030 (the “Performance Period”). One-half of the Executive LTIP Unit Awards are not subject to achievement of predetermined performance milestones (the “Time-Based LTIP Units”). None of the Executive LTIP Unit Awards will be subject to any service-based vesting conditions.
Upon an Executive's resignation other than due to a Qualifying Termination (as defined in the Executive LTIP Unit Awards), (i) any portion of the Executive LTIP Unit Award that is not then redeemable will be subject to an automatic delay of the Executive’s right to redeem the Executive LTIP Unit Award for shares of Welltower common stock and restrictions with respect to future distributions thereon until (a) for Mr. Mitra, October 30, 2040 (i.e., 15 years following the grant date), and (b) for all other Executives, October 30, 2045 (i.e., 20 years following the grant date) (as applicable, the “Extended Redemption Date”), and (ii) if the resignation occurs prior to the end of the Performance Period, Mr. Mitra’s Time-Based LTIP Units and all associated distributions will be subject to clawback, unless Welltower’s total shareholder return (“TSR”) is positive as of the end of the Performance Period. In addition, upon the Executive’s resignation other than due to a Qualifying Termination, we will have the discretionary right, during the applicable period commencing on the later of the date of resignation or the second calendar day following the six month anniversary of the grant and ending on the Extended Redemption Date, to repurchase all or any portion of the Executive LTIP Unit Award that is not then redeemable at its fair market value at the time that we exercise the repurchase right, which may include discounts for lack of transferability through the applicable Extended Redemption Date, lack of marketability due to the delay in redemption rights, time value of money and minority interest.
One-half of the Performance-Based LTIP Units will become eligible to be earned subject to Welltower’s TSR relative to the TSR of each of the FTSE NAREIT Healthcare Index, the MSCI US REIT Index and the S&P 500 Index (in each case, removing Welltower from each index in calculating each index return) equally weighted, over the Performance Period. One-half of the Performance-Based LTIP Units will become eligible to be earned subject to Welltower’s achievement of certain market capitalization milestones over any 60 consecutive calendar-day period during years four and five of the Performance Period; provided, however, for purposes of determining the number of shares used for determining achievement of the market capitalization milestone, new share issuances under our ATM Program will be limited, with the intention that at least 50% of any increase in daily market capitalization that counts toward achievement of the milestones is attributable to share price appreciation, and in all cases no portion of the market capitalization linked Performance-Based LTIP Unit award will be earned if Welltower does not achieve a positive TSR as of the end of the five-year Performance Period.
The Executive LTIP Unit Awards are expected to be classified as equity awards under ASC 718. The Executive LTIP Unit Awards are fully vested on the date of grant for accounting purposes but the awards remain subject to redemption restrictions to the extent time-based requirements have not been met and to market conditions being achieved with respect to Performance-Based LTIP Units. We intend to measure the grant date fair value for multiple potential outcomes, with each potential outcome considering the market conditions applicable to the award as well as other characteristics such as redemption restrictions, discounts for lack of marketability and liquidity risk. Our preliminary estimate of the fair value of the Executive LTIP Unit Awards, assuming the probable expected outcome of all time-based requirements being met, is approximately $1.3 billion, of which we expect to recognize approximately $1.0 billion of expense in 2025, inclusive of the estimated value of the amounts vested on the grant date.
Additionally, in connection with the adoption of the 10 Year Program, our Board of Directors approved a global amendment to the 2024-2026 LTIP plan and the 2025-2027 LTIP plan (collectively the “LTIPs”) previously granted to the Executives under the Amended and Restated Plan, waiving the continued service-based vesting conditions with respect to all performance based grants under such LTIPs, effective as of October 30, 2025. Except as expressly provided by such amendment, all equity or equity-based awards held by the Executives and outstanding as of October 30, 2025, remain in effect in accordance with their
terms, including the performance conditions and market conditions associated with such awards. We expect to recognize $51 million of incremental expense in the fourth quarter in conjunction with such amendment.