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Share Based Compensation | 12 Months Ended
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Dec. 28, 2024
Share-Based Payment Arrangement, Noncash Expense [Abstract] |
Share-based compensation expense | Share-Based Compensation Share-based compensation includes stock options, restricted stock units, performance-based restricted share units, and certain transactions under the Company’s ESPP. Share-based compensation expense is recognized based on the grant date fair value of all stock options, restricted stock units, and performance-based restricted share units. Share based compensation expense is also recognized for the value of the 15% discount on shares purchased by employees as a part of the ESPP. The discount under the ESPP represents the difference between the market value on the first day of the purchase period or the market value on the purchase date, whichever is lower, and the employee’s purchase price. There were no significant modifications to the Company's share-based compensation plans since the adoption of the 2018 Omnibus Incentive Plan (the “2018 Plan”) on May 10, 2018, which replaced the 2009 Stock Incentive Plan. Following the adoption of the 2018 Plan, no further grants may be made under the 2009 Stock Incentive Plan. Under our share-based compensation plans, awards may be granted to officers, non-employee directors, and other employees. The per share exercise price of options granted shall not be less than the fair market value of the stock on the date of grant and such awards will expire no later than ten years from the date of grant. Vesting of awards commences at various anniversary dates following the dates of each grant. Performance-based awards will vest if established performance conditions are met subject to continued employment. Certain performance-based awards are also subject to a market condition such that the actual number of shares vest are further modified based on the achievement of a relative stockholder return modifier. At December 28, 2024, the Company had approximately 38.5 million shares available for future equity awards under the Company’s 2018 Plan. Share-based compensation expense of awards was $48.4 million, $57.0 million, and $53.8 million for fiscal 2024, 2023, and 2022, respectively. Stock Options The fair value is separately estimated for each option grant. The fair value of each option is recognized as compensation expense ratably over the vesting period. The Company has estimated the fair value of all stock option awards as of the date of the grant by applying a Black-Scholes pricing valuation model. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense. The ranges of key assumptions used in determining the fair value of options granted during fiscal 2024, 2023, and 2022, as well as a summary of the methodology applied to develop each assumption, are as follows:
| Fiscal Year
| 2024 |  | 2023 |  | 2022
Expected price volatility | 27.3% - 29.8% |  | 30.7% - 30.9% |  | 29.9% - 31.3%
Risk-free interest rate | 3.7% - 4.6% |  | 3.5% - 4.5% |  | 1.7% - 4.3%
Weighted average expected lives (in years) | 4.2 |  | 4.2 |  | 4.1
Forfeiture rate | 6.9 | % |  | 6.9 | % |  | 6.9 | %
Dividend yield | 2.0 | % |  | 1.7 | % |  | 1.6 | %
Expected Price Volatility — This is a measure of the amount by which a price has fluctuated or is expected to fluctuate. The Company calculates the expected price volatility based on the historical volatility of the Company’s stock price, as well as implied volatility. To calculate historical changes in market value, the Company uses daily market value changes from the date of grant over a past period generally representative of the expected life of the options to determine volatility. The Company believes the use of a blended volatility provides an appropriate indicator of future volatility. An increase in the expected volatility will increase compensation expense. Risk-Free Interest Rate — This is the U.S. Treasury Constant Maturity rate over a term equal to the expected term of the option. An increase in the risk-free interest rate will increase compensation expense. Weighted Average Expected Term — This is the period of time over which the options granted are expected to remain outstanding and is based on historical experience. Options granted generally have a maximum term of ten years. An increase in the expected term will increase compensation expense. Forfeiture Rate — This is the estimated percentage of options granted that are expected to be forfeited or canceled before becoming fully vested. This estimate is based on historical experience. An increase in the forfeiture rate will decrease compensation expense. Dividend Yield — This is the estimated dividend yield for the weighted average expected term of the option granted. An increase in the dividend yield will decrease compensation expense. The Company issues shares for options when exercised. A summary of stock option activity is as follows:
Stock Option Activity |  | Options |  | Weighted Average Exercise Price |  | Weighted Average Fair Value |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value (in thousands)
Outstanding at December 30, 2023 (a) |  | 5,074,385 |  |  | 26.13 |  |  |  |  | 5.0 |  | $ | 83,492 |
Granted |  | 682,070 |  |  | 46.78 |  |  | $ | 11.73 |  |  |  |  |
Exercised |  | (1,528,810) |  |  | 20.05 |  |  |  |  |  |  |
Canceled |  | (109,580) |  |  | 40.52 |  |  |  |  |  |  |
Outstanding at December 28, 2024 |  | 4,118,065 |  |  | $ | 31.43 |  |  |  |  | 6.0 |  | $ | 95,268 |
Exercisable at December 28, 2024 |  | 2,907,460 |  |  | $ | 25.25 |  |  |  |  | 5.0 |  | $ | 85,225 |
(a) All share and related dollar information has been adjusted to reflect the five-for-one Stock Split effective December 20, 2024 as discussed in Note 1. The aggregate intrinsic values in the table above represent the total difference between the Company’s closing stock price at each year-end and the option exercise price, multiplied by the number of in-the-money options at each year-end. As of December 28, 2024, total unrecognized compensation expense related to non-vested stock options was approximately $8.2 million with a weighted average expense recognition period of 1.8 years. There were no material modifications to options in fiscal 2024, 2023, or 2022. Other information relative to options activity during fiscal 2024, 2023, and 2022 is as follows (in thousands):
| Fiscal Year
| 2024 |  | 2023 |  | 2022
Total fair value of stock options vested | $ | 6,837 |  |  | $ | 7,070 |  |  | $ | 7,783 |
Total intrinsic value of stock options exercised | $ | 46,629 |  |  | $ | 26,092 |  |  | $ | 25,024 |
Restricted Stock Units The Company issues shares for restricted stock units once vesting occurs and related restrictions lapse. The fair value of the restricted stock units is the closing price of the Company’s common stock the day preceding the grant date, discounted for the expected dividend yield over the term of the award. The units generally vest over a one-to three-year term. Some plan participants have elected to defer receipt of shares of common stock upon vesting of restricted stock units, and as a result, those shares are not issued until a later date. A summary of restricted stock unit activity is presented below:
Restricted Stock Unit Activity |  | Restricted Stock Units |  | Weighted Average Grant Date Fair Value
Restricted at December 30, 2023 (a) |  | 2,049,980 |  |  | $ | 39.38 |
Granted |  | 1,206,221 |  |  | 45.74 |
Vested |  | (978,395) |  |  | 37.09 |
Forfeited |  | (242,885) |  |  | 44.15 |
Restricted at December 28, 2024 |  | 2,034,921 |  |  | $ | 43.68 |
(a) All share and related dollar information has been adjusted to reflect the five-for-one Stock Split effective December 20, 2024 as discussed in Note 1. As of December 28, 2024, total unrecognized compensation expense related to non-vested restricted stock units was approximately $53.5 million with a weighted average expense recognition period of 1.9 years. There were no material modifications to restricted stock units in fiscal 2024, 2023, or 2022. Other information relative to restricted stock unit activity during fiscal 2024, 2023, and 2022 is as follows (in thousands):
| Fiscal Year
| 2024 |  | 2023 |  | 2022
Total grant date fair value of restricted stock units vested and issued | $ | 36,292 |  |  | $ | 32,446 |  |  | $ | 26,031 |
Total intrinsic value of restricted stock units vested and issued | $ | 46,647 |  |  | $ | 53,112 |  |  | $ | 50,532 |
Performance-Based Restricted Share Units We issue performance-based restricted share units to senior executives that represent shares potentially issuable in the future, subject to the achievement of specified performance goals. The performance metrics for the units are growth in net sales and growth in earnings per diluted share over a specified performance period. The performance metrics for the performance-based restricted share units also include a relative total shareholder return (“TSR”) modifier such that the actual number of shares that vest at the end of the respective three-year period is determined based on the Company's TSR performance relative to the constituents of the S&P 500 as well as the level of achievement of the performance goals. If the performance targets are achieved, the performance-based restricted share units will be issued based on the achievement level, inclusive of the relative TSR modifier and the grant date fair value, and will cliff vest in full on the third anniversary of the date of the grant. The fair value of the performance-based restricted share units is estimated using a Monte Carlo simulation model on the grant date. Key assumptions used in the Monte Carlo simulation for the performance shares with a TSR modifier granted during fiscal 2024 and during fiscal 2023 are presented below:
|  | Fiscal Year
Assumption |  | 2024 |  | 2023
Expected volatility |  | 28.32 | % |  | 32.13 | %
Risk-free interest rate |  | 4.06 | % |  | 3.70 | %
Compounded dividend yield |  | 1.95 | % |  | 1.69 | %
A summary of performance-based restricted share unit activity is presented below:
Performance-Based Restricted Share Unit Activity |  |  |  |  | Performance-Based Restricted Share Units |  | Weighted Average Grant Date Fair Value
Restricted at December 30, 2023 (a) |  |  |  |  | 774,095 |  |  | $ | 38.43 |
Granted (b) |  |  |  |  | 286,975 |  |  | 47.11 |
Performance Adjustment (c) |  |  |  |  | 403,615 |  |  | 24.07 |
Vested |  |  |  |  | (672,735) |  |  | 24.07 |
Forfeited |  |  |  |  | (46,970) |  |  | 45.55 |
Restricted at December 28, 2024 |  |  |  |  | 744,980 |  |  | $ | 46.51 |
(a) All share and related dollar information has been adjusted to reflect the five-for-one Stock Split effective December 20, 2024 as discussed in Note 1. (b) Assumes 100% target level achievement of the relative performance targets. The actual number of shares that will be issued, which may be higher or lower than the target, will be determined by the level of achievement of the relative performance targets, inclusive of the TSR modifier. (c) Shares adjusted for performance-based restricted share unit awards settled during fiscal 2024 based on actual achievement of performance targets. As of December 28, 2024, total unrecognized compensation expense related to non-vested performance-based restricted share units was approximately $12.3 million with a weighted average expense recognition period of 1.9 years. There were no material modifications to performance-based restricted share units in fiscal 2024, 2023, or 2022. Other information relative to performance-based restricted share unit activity during fiscal 2024 is as follows (in thousands):
| Fiscal Year
| 2024 |  | 2023 |  | 2022
Total grant date fair value of performance-based restricted share units vested and issued | $ | 16,195 |  |  | $ | 9,498 |  |  | $ | 14,104 |
Total intrinsic value of performance-based restricted share units vested and issued | $ | 31,020 |  |  | $ | 23,155 |  |  | $ | 33,895 |
Shares Withheld to Satisfy Tax Withholding Requirements For the majority of restricted stock units and performance-based restricted share units and certain stock options granted, the number of shares issued on the date the stock awards vest or the number of stock options being exercised is net of shares withheld by the Company to satisfy the minimum statutory tax withholding requirements, which the Company pays on behalf of its employees. The Company issued 1,180,731; 1,134,940; and 1,292,750 shares as a result of vested restricted stock units and performance-based restricted share units, as well as exercised stock options during fiscal 2024, 2023, and 2022, respectively. Although shares withheld are not issued, they are treated similar to common stock repurchases as they reduce the number of shares that would have been issued upon vesting. The amounts are net of 524,204; 531,365; and 659,695 shares withheld to satisfy $24.6 million, $24.4 million, and $28.6 million of employees’ tax obligations during fiscal 2024, 2023, and 2022, respectively. Employee Stock Purchase Plan The ESPP provides Company employees the opportunity to purchase, through payroll deductions, shares of common stock at a 15% discount. Pursuant to the terms of the ESPP, the Company issued 219,330; 225,790; and 221,950 shares of common stock during fiscal 2024, 2023, and 2022, respectively. The total cost related to the ESPP, including the compensation expense calculations, was approximately $2.0 million, $1.9 million, and $1.8 million in fiscal 2024, 2023, and 2022, respectively. There is a maximum of 16.0 million shares of common stock that are reserved under the ESPP. At December 28, 2024, there were approximately 11.5 million remaining shares of common stock reserved for future issuance under the ESPP.

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