Share-Based Compensation

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

(12) Share-Based Compensation

Overview

CVR Energy has a Long-Term Incentive Plan (the “CVR Energy LTIP”) that permits the granting of restricted stock, restricted stock units, options, stock appreciation rights, dividend equivalent rights, performance awards, and share awards to the employees, officers, and directors of the Company and its subsidiaries. The Company had 5.6 million shares available for future grants under the CVR Energy LTIP at December 31, 2024.

CVR Partners had a Long-Term Incentive Plan (“CVR Partners LTIP”) which permitted the granting of options, unit appreciation rights, distribution equivalent rights; restricted and phantom units, and other unit-based unit-based awards to the employees, officers, consultants and directors of CVR Partners and its subsidiaries, which expired by its terms in 2021. However, CVR Partners may grant long-term cash awards in connection with (and not under) the CVR Partners LTIP to directors, officers, employees, employee candidates, consultants, or advisors of CVR Partners, its subsidiaries, or its parent.

Incentive and Phantom Unit Awards

The Company has issued long-term incentive unit awards under the CVR Energy LTIP, which represent the right to receive, upon vesting, at the Compensation Committee’s election (i) one share of CVR Energy common stock together with the per share value of all dividends declared and paid on CVR Energy common stock, from the grant date through the vesting date, or (ii) a cash payment equal to the average fair market value of one share of CVR Energy common stock calculated in accordance with the award agreement, plus the per share value of all dividends declared and paid on CVR Energy common stock from the grant date through the vesting date, both subject to the terms of the applicable award agreement (“CVI LTIP Awards”).

The Company and CVR Partners have also issued long-term, cash incentive or phantom unit awards in connection with (but not under) the CVR Energy LTIP and CVR Partners LTIP, as applicable (collectively, the “Cash Share-Based Awards” and together with the CVI LTIP Awards, “Share-Based Awards”). These Cash Share-Based Awards represent the right to receive, upon vesting, a cash payment equal to (i) the average fair market value of one share of CVR Energy common stock or CVR Partners common units, as applicable, calculated in accordance with the award agreement, plus (ii) the per share value of all dividends or distributions declared and paid on CVR Energy common stock or CVR Partners common units, as applicable, from the grant date through the vesting date, subject to the terms of the applicable award agreement.

The Share-Based Awards are generally graded-vesting awards, which vest over three years with one-third of the award vesting each year provided the grantee remains employed by the Company or its subsidiaries on the applicable vesting date. Compensation expense is recognized ratably, based on service provided to the Company and its subsidiaries, with the amount recognized fluctuating as a result of the Share-Based Awards being remeasured to fair value at the end of each reporting period due to their liability-award classification.

A summary of activity for the Company’s Share-Based Awards for the year ended December 31, 2024 is presented below:


	Shares or Units (1)	Weighted-Average Grant-Date Fair Value (per share or unit)		Aggregate Intrinsic Value (in millions)








Non-vested at December 31, 2023	1,438,905	$	30.67	$	47
Granted (2)	1,288,232	22.61
Vested	(685,779)	28.05
Forfeited	(94,088)	30.91
Non-vested at December 31, 2024	1,947,270	$	26.25	$	43

(1)Includes all units outstanding under Share-Based Awards.

(2)Includes 1,218,813 units granted under the CVR Energy LTIP with a weighted-average grant-date fair value of $19.88. The remainder of the outstanding and unvested units, as well as the vested and forfeited awards, were issued as Cash Share-Based Awards in connection with (and not under) the CVR Energy LTIP and CVR Partners LTIP.

Performance Unit Awards

A performance award agreement effective November 1, 2017, as amended (the “CEO Performance Award”), represents our Chief Executive Officer’s right to receive upon vesting, a cash payment equal to $10 million if the average closing price of CVR Energy’s common stock over the 30-day trading period from January 6, 2025 through February 20, 2025 is equal to or greater than $60 per share (subject to any equitable adjustments required to account for splits, dividends, combinations, acquisitions, dispositions, recapitalizations, and the like). The Performance Cycle (as such term is defined in the CEO Performance Award) ended on December 31, 2024, and the measurement period thereunder will expire on February 20, 2025, after which the CEO Performance Award will no longer be in effect. At this time, it is not probable that the condition under the CEO Performance Award will be achieved or that any amounts will be paid thereunder. Under the CEO Performance Award, as of December 31, 2024 and 2023, the Company had no outstanding liability.

Compensation Expense

A summary of total share-based compensation expense and unrecognized compensation expense related to the Share-Based Awards and the CEO Performance Award during the years ended December 31, 2024, 2023, and 2022 is presented below:


	Expenses						Unrecognized Expense
	For the year ended December 31,						At December 31, 2024
(in millions)	2024		2023		2022		Amount		Weighted-Average Remaining Years
Share-Based Awards:
Incentive Units (1)	$	10	$	28	$	45	$	30	1.8
CVR Partners - Phantom Units (2)	5		6		26		6		1.8

Performance Unit Awards:
CEO Performance Award (3)	—		—		—		10		0.1


Total share-based compensation expense	$	15	$	34	$	71	$	46

(1)Includes expense associated with incentive units granted as Cash Share-Based Awards and CVI LTIP Awards by CVR Energy.

(2)Comprised of expense associated with the phantom units granted as Cash Share-Based Awards by CVR Partners.

(3)All expenses, recognized and unrecognized, related to the CEO Performance Award are contingent upon whether the performance parameters are probable of being met. If the performance parameters are not met, no expense will be recognized.

The total tax benefit recognized during the years ended December 31, 2024, 2023, and 2022 related to compensation expense was $4 million, $9 million, and $19 million, respectively. As of December 31, 2024 and 2023, the Company had a liability of $10 million and $16 million, respectively, for cash settled non-vested Share-Based Awards and associated dividend and distribution equivalent rights. For the years ended December 31, 2024, 2023, and 2022, the Company paid cash of $21 million, $54 million, and $58 million, respectively, to settle liability-classified awards upon vesting.

Other Benefit Plans

The Company sponsors and administers two defined-contribution 401(k) plans, the CVR Energy 401(k) Plan and the CVR Energy 401(k) Plan for Represented Employees (collectively, the “Plans”), in which the Company’s employees may participate. Participants in the Plans may elect to contribute a designated percentage of their eligible compensation in accordance with the Plans, subject to statutory limits. The Company provides a matching contribution of 100% of the first 6% of eligible compensation contributed by participants. Participants in the Plans are immediately vested in their individual contributions. The Plans provide for a three-year vesting schedule for the Company’s matching contributions and contain a provision to count service with predecessor organizations. The Company had contributions under the Plans of $13 million, $12 million, and $11 million for the years ended December 31, 2024, 2023, and 2022, respectively.