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Stock Plans | 3 Months Ended
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Mar. 31, 2025
Stock Plans [Abstract] |
Stock Plans | (12) Stock Plans: Frontier Communications Parent, Inc. has one active long-term incentive plan, under which grants are made and awards remain outstanding: the 2024 Management Incentive Plan (the “2024 Incentive Plan”). The plan was approved by shareholders at the Annual Meeting on May 15, 2024, with 8,765,000 shares available for awards. The 2024 Incentive Plan permits stock-based awards to be made to employees, directors, or consultants of the Company or its affiliates, as determined by the Compensation and Human Capital Committee of the Board. Available shares under the previous plan of 1,151,334 were rolled into the new 2024 plan for a total of 9,916,334 shares reserved for issuance. Equity awards have been issued in the form of time-based restricted stock units (RSUs) and performance-based stock units (PSUs). As of March 31, 2025, there were 8,142,808 shares available to grant. Restricted Stock Units The following summary presents information regarding unvested restricted stock under the 2024 Incentive Plan:
|  |  |  | Weighted |  |  |  |
|  |  |  | Average |  |  |
|  | Number of |  | Grant Date |  | Aggregate |
|  | Shares |  | Fair Value |  | Fair Value |
|  | (in thousands) |  | (per share) |  | (in millions) |
Balance at January 1, 2025 |  | 2,058 |  | $ | 24.45 |  | $ | 71 |
Restricted stock units granted |  | 811 |  | $ | 35.85 |  | $ | 29 |
Restricted stock units vested |  | (628) |  | $ | 25.04 |  | $ | (22) |
Restricted stock units forfeited |  | (21) |  | $ | 23.52 |  |  |  |
Balance at March 31, 2025 |  | 2,220 |  | $ | 28.46 |  | $ | 80 |
For purposes of determining compensation expense, the fair value of each restricted stock grant is estimated based on the closing price of our common stock on the date of grant. The non-vested restricted stock units granted in 2023, 2024 and 2025 generally vest, and are expensed, on a ratable basis over three years from the grant date of the award. Total remaining unrecognized compensation cost associated with unvested restricted stock awards that is deferred at March 31, 2025 was $54 million and the weighted average vesting period over which this cost is expected to be recognized is approximately 2 years. None of the restricted stock awards may be sold, assigned, pledged, or otherwise transferred, voluntarily or involuntarily, by the employees until the restrictions lapse, subject to limited exceptions. The restrictions are time-based. Compensation expense, recognized in “Selling, general, and administrative expenses”, of $8 million and $10 million for the three-month periods ended March 31, 2025, and 2024, respectively, has been recorded in connection with restricted stock. Performance Stock Units We currently have outstanding performance stock units (“PSU”) that were granted in 2023, 2024 and 2025. Under these awards, a target number of PSUs are granted to each participant with respect to a three-year performance period (“The Measurement Period”). For the 2025 PSU awards, for example, the Measurement Period is from January 1, 2025, through December 31, 2027. The performance metrics under the 2025 PSU awards consist of (1) Adjusted Fiber EBITDA and (2) Fiber Revenue. Each performance metric is evenly weighted at 50% and the goals for both metrics have been fully set for the full Measurement Period. The performance metrics under the 2024 PSU awards consist of (1) Adjusted Fiber EBITDA, (2) Fiber Revenue and (3) Relative Total Shareholder Return (“TSR”). Relative TSR is based on our total return to stockholders over the Measurement Period relative to the S&P 400 Mid Cap Index. Each performance metric is weighted 33.3% and the goals for each of the three metrics have been fully set for the full Measurement Period. The performance metrics under the 2022 and 2023 PSU awards are (1) Adjusted Fiber EBITDA, (2) Fiber Locations Constructed and (3) Expansion Fiber Penetration with an overall relative TSR modifier. Each performance metric is weighted 33.3% and goals for each metric have been set for the full Measurement Period. Achievement of the metrics for outstanding PSUs will be measured separately, and the number of awards earned will be determined based on actual performance relative to the targets of each performance metric. Achievement is measured on a cumulative basis for each performance metric individually at the end of the three-year Measurement Period with a TSR modifier for the 2023 plan. The payout of the 2023, 2024 and 2025 PSUs can range from 0% to a maximum award payout of 200% of the target units. The 2022 PSU awards paid out at 133.7% of target on February 28, 2025. The number of PSUs earned at the end of the Measurement Period may be more or less than the number of target PSUs granted as a result of performance. An executive must maintain a satisfactory performance rating during the Measurement Period and, except for limited circumstances, must be employed by Frontier on the determination date in order for the award to vest. The Compensation and Human Capital Committee will determine the number of shares earned for the Measurement Period in the first quarter of the year following the end of the Measurement Period. PSU awards, to the extent earned, will be paid out in the form of common stock on a one-for-one basis. Under ASC 718, Stock Based Compensation Expense, a grant date, and the fair value of a performance award are determined once the targets are finalized. For the 2023, 2024 and 2025 PSU awards, targets for all of the metrics have been fully set for each performance period and the related expense will be amortized over the appropriate performance period. The following summary presents information regarding performance shares and changes during the period with regard to performance shares awarded under the 2024 Incentive Plan:
|  |  |  |  | Weighted |  |
|  |  |  |  | Average |  |
|  | Number of |  |  | Award Date |  |
|  | Shares |  |  | Fair Value |  |
|  | (in thousands) |  |  | (per share) (1) |  |
Balance at January 1, 2025 |  | 1,552 |  | $ | 24.58 |  |
Target performance shares awarded, net |  | 625 |  | $ | 35.45 |  |
Target performance shares vested or converted |  | (95) |  | $ | 25.54 |  |
Balance at March 31, 2025 |  | 2,082 |  | $ | 27.80 |  |
(1) Represents the weighted average of the closing price of our stock on the date of the awards. |  |
For purposes of determining compensation expense, the fair value of each performance share grant is estimated based on the closing price of a share of our common stock on the date of the grant, adjusted to reflect the fair value of the relative TSR metric for the 2024 grant and TSR modifier for previous years. For both the three months ended March 31, 2025, and 2024, we recognized net compensation expense, reflected in “Selling, general, and administrative expenses,” of $7 million, and $16 million, respectively, related to PSU awards. Converted PSUs In 2024, approximately 501,000 PSUs of our CFO’s 2023-2025 PSUs converted into performance-based restricted stock subject to identical performance and service vesting conditions. There was no impact to the historical accounting treatment for these PSUs. Non-Employee Directors Compensation expense related to the board of directors, recognized in “Selling, general, and administrative expenses”, was less than $1 million for both the three months ended March 31, 2025 and 2024. Treatment of RSUs and PSUs under Merger Agreement See Note 2 – Merger Agreement, for a discussion of the treatment of RSU and PSU awards under the Merger Agreement.

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