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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2021
Stock-Based Compensation [Abstract] |
Stock-Based Compensation | 8. Stock-Based Compensation Pursuant to the 2011 Incentive Plan, we grant stock options, SOSARs, restricted stock units (“RSUs”), or performance and/or market based restricted stock units (“PSUs”) to employees and non-employee directors. We issue shares of common stock upon the exercise of SOSARs and the vesting of RSUs and PSUs. Under the 2011 Incentive Plan, 6,830 shares of common stock have been authorized and reserved for issuance to eligible participants, of which 2,141 shares were authorized for issuance but not issued or subject to outstanding awards as of December 31, 2021. For purposes of calculating the available shares remaining, each share issuable pursuant to outstanding full value awards, such as RSUs and PSUs, counts as two shares, and each share underlying a stock option or SOSAR count as one share.The following table sets forth total stock-based compensation expense: Year ended December 31, 2021 2020 2019Stock-based compensation$ 178,703 $ 84,463 $ 92,062Stock-based compensation, net of income taxes$ 159,972 $ 69,904 $ 73,866Total capitalized stock-based compensation included in leasehold improvements, property and equipment, net on the consolidated balance sheets$ 2,311 $ 1,837 $ 666Excess tax benefit on stock-based compensation recognized in benefit/(provision) for income taxes on the consolidated statements of income$ 47,958 $ 49,690 $ 16,203 SOSARsA summary of SOSAR activity was as follows (in thousands, except years and per share data): Shares Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Life (Years) Aggregate Intrinsic ValueOutstanding, January 1, 2021 748 $ 533.71 $ 637,905Granted 82 1,510.79 Exercised (446) 448.02 Forfeited or cancelled (20) 913.86 Outstanding, December 31, 2021 364 838.62 4.7 331,352Exercisable, December 31, 2021 100 473.64 3.4 127,918Vested and expected to vest, December 31, 2021 353 823.91 4.6 326,444 The total intrinsic value of SOSARs exercised during the years ended December 31, 2021, 2020, and 2019, was $498,399, $236,573, and $219,984, respectively. Unrecognized stock-based compensation expense for SOSARs as of December 31, 2021 was $23,115 and is expected to be recognized over a weighted average period of 1.5 years. SOSARs expire 7 years after the day they were granted.The weighted average assumptions utilized in the Black-Scholes option-pricing model to estimate the fair value of SOSARs granted each year were as follows: 2021 2020 2019Risk-free interest rate 0.3% 1.3% 2.4%Expected life (years) 3.7 3.8 3.9 Expected dividend yield 0.0% 0.0% 0.0%Volatility 35.2% 32.4% 34.7%Weighted-average Black-Scholes fair value per share at date of grant $403.01 $231.52 $176.79 The risk-free interest rate is based on U.S. Treasury rates for instruments with similar terms, and the expected life assumption is based on our historical data. We have not paid dividends to date and do not plan to pay dividends in the near future. The volatility assumption is based on our historical data and implied volatility. Non-Vested Stock Awards (RSUs)A summary of RSU award activity was as follows (in thousands, except per share data): Shares Weighted-Average Grant Date Fair Value per ShareOutstanding, January 1, 2021 92 $ 631.66Granted 25 1,492.15Vested (50) 497.97Forfeited or cancelled (9) 1,021.45Outstanding, December 31, 2021 58 1,064.67Vested and expected to vest, December 31, 2021 53 1,042.33 The weighted average grant date fair value per RSU granted during the years ended December 31, 2020 and 2019, was $905.96 and $627.94, respectively. Unrecognized stock-based compensation expense for non-vested RSU stock awards we have determined are probable of vesting was $21,600 as of December 31, 2021, and is expected to be recognized over a weighted average period of 1.5 years. The fair value of shares earned as of the vesting date during the years ended December 31, 2021, 2020, and 2019, was $73,540, $47,649, and $27,197, respectively.Non-Vested Performance Stock Awards (PSUs)A summary of PSU award activity was as follows (in thousands, except per share data): Shares Weighted-Average Grant Date Fair Value per ShareOutstanding, January 1, 2021 (1) 150 $ 846.22Granted 18 1,479.55Vested (62) 891.17Expired (1) 946.17Outstanding, December 31, 2021 105 928.28Vested and expected to vest, December 31, 2021 229 880.99(1)The beginning outstanding balance includes the shares issued through the modification of the 2018 Performance Share Awards which was completed on December 30, 2020. This amount was not included in the table above in the 2020 Form 10-K and instead was discussed in a separate paragraph. The weighted average fair value per PSU granted during the years ended December 31, 2020 and 2019, was $853.03 and $583.13, respectively. The Unrecognized stock-based compensation expense for non-vested PSU stock awards we have determined are probable of vesting was $69,203 as of December 31, 2021, and is expected to be recognized over a weighted average period of 1.7 years. The fair value of shares earned as of the vesting date during the years ended December 31, 2021, 2020, and 2019, was $97,496, $60,081, and $0, respectively.During the year ended December 31, 2021, we awarded performance share awards that are subject to service, market, and performance vesting conditions. The quantity of shares that will vest will range from 0% to 300% of the target number of shares based on performance factors related to our growth in comparable restaurant sales and average restaurant margin over a three year period beginning on January 1, 2021. If the defined minimum targets are not met, then no shares will vest. Further, in no event may more than 100% of the target number of PSUs vest if our 3-year total shareholder return is below the 25th percentile of the constituent companies comprising the S&P 500 on the day of the grant. During the year ended December 31, 2020, we awarded performance share awards that are subject to service, market, and performance vesting conditions. The quantity of shares that will vest will range from 0% to 300% of the target number of shares based on performance factors related to our growth in comparable restaurant sales and average restaurant margin over a three year period beginning on January 1, 2020. If the defined minimum targets are not met, then no shares will vest. Further, in no event may more than 100% of the target number of PSUs vest if our 3-year total shareholder return is below the 25th percentile of the constituent companies comprising the S&P 500 on the day of the grant.During the year ended December 31, 2019, we awarded two types of performance share awards that are subject to service and performance vesting conditions. The quantity of shares that will vest range from 0% to 300% of the targeted number of shares for both awards. The first award, consisting of 33 shares, will vest based on our growth in comparable restaurant sales and average restaurant margin over a three year period beginning on January 1, 2019. The second award, consisting of 13 shares, will vest based on performance conditions based on achievement of certain targets related to digital sales, general and administrative expenses as a percentage of total revenue, and successful completion of a defined number of strategic initiatives in 2019 and 2020. These awards will vest 40% on the third anniversary of the grant date and 60% on the fourth anniversary of the grant date provided required service is completed through these dates. The information contained in this paragraph describing the modification of the 2018 Performance Share Awards is included in the PSU table above. On December 30, 2020, due to the impact that the COVID-19 pandemic had on the growth in comparable restaurant sales and restaurant margin relative to the trajectory of both of these performance factors prior to the pandemic, and also due to the significant shareholder value created over the performance period of the original award, the Compensation Committee of the Board of Directors modified the 2018 PSU award. This modification pertained to all seven recipients of this award, and resulted in incremental compensation expense of $71,441, of which $63,050 was recognized during the year ended December 31, 2021, and $8,391 remains unamortized as of December 31, 2021. To receive all incremental shares generated through the modification, the employees must remain employed through December 31, 2022, and the incremental shares will vest in four installments over this period. The first two installments of the modification vested during 2021, which included the vesting of 33 PSUs. The remaining expense will be recognized over this requisite service period of 12 months. The incremental compensation cost is calculated by multiplying the number of incremental shares generated though the modification by the stock price on the modification date. The stock price on the modification date of December 30, 2020 was $1,374.17.

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