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Stock-based Compensation | 6 Months Ended
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Sep. 26, 2020
Share-based Payment Arrangement [Abstract] |
Stock-based Compensation | Stock-based Compensation The Company's stock-based compensation awards are currently issued under the 2019 Incentive Plan, which was approved by its stockholders on August 1, 2019. However, any prior awards granted under either the Company's 2010 Incentive Plan or 1997 Incentive Plan remain subject to the terms of those plans as applicable. Any awards that expire, are forfeited, or are surrendered to the Company in satisfaction of taxes are available for issuance under the 2019 Incentive Plan. Refer to Note 18 of the Fiscal 2020 10-K for a detailed description of the Company's stock-based compensation awards, including information related to vesting terms, service, performance, and market conditions and payout percentages. Impact on Results A summary of total stock-based compensation expense and the related income tax benefits recognized during the three-month and six-month periods ended September 26, 2020 and September 28, 2019 is as follows:
|  | Three Months Ended |  | Six Months Ended |
|  | September 26, 2020 |  | September 28, 2019 |  | September 26, 2020 |  | September 28, 2019 |
|  | (millions) |
Compensation expense |  | $ | 19.5 |  |  | $ | 27.8 |  | (a) | $ | 34.6 |  |  | $ | 50.8 |  | (a)
Income tax benefit |  | (3.6 | ) |  | (4.1 | ) |  | (6.7 | ) |  | (7.7 | ) |
(a) | Includes $3.6 million of accelerated stock-based compensation expense recorded within restructuring and other charges in the consolidated statements of operations during the second quarter of Fiscal 2020 (see Note 8). All other stock-based compensation expense was recorded within SG&A expenses.
The Company issues its annual grants of stock-based compensation awards in the first half of each fiscal year. Due to the timing of the annual grants and other factors, including the timing and magnitude of forfeiture and performance goal achievement adjustments, as well as changes to the size and composition of the eligible employee population, stock-based compensation expense recognized during any given fiscal period is not indicative of the level of compensation expense expected to be incurred in future periods. Restricted Stock Awards and Service-based RSUs Restricted stock awards were granted to non-employee directors prior to Fiscal 2019. Effective beginning Fiscal 2019, non-employee directors are now granted service-based RSUs in lieu of restricted shares. The fair values of service-based RSUs granted to certain of the Company's senior executives and other employees, as well as non-employee directors, are based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for any awards for which dividend equivalent amounts do not accrue while outstanding and unvested. The weighted-average grant date fair values of service-based RSU awards granted were $63.57 and $102.65 per share during the six-month periods ended September 26, 2020 and September 28, 2019, respectively. A summary of restricted stock and service-based RSU activity during the six months ended September 26, 2020 is as follows:
|  | Number of Shares/Units
|  | Restricted Stock |  | Service-based RSUs
|  | (thousands)
Unvested at March 28, 2020 |  | 4 |  |  | 1,094 |
Granted |  | — |  |  | 1,322 |
Vested |  | (4 | ) |  | (443 | )
Forfeited |  | — |  |  | (33 | )
Unvested at September 26, 2020 |  | — |  |  | 1,940 |
Performance-based RSUs The fair values of the Company's performance-based RSUs granted to its senior executives and other key employees are based on the fair value of the Company's Class A common stock on the date of grant, adjusted to reflect the absence of dividends for any awards for which dividend equivalent amounts do not accrue while outstanding and unvested. The weighted-average grant date fair values of performance-based RSUs granted was $83.16 per share during the six months ended September 28, 2019. No such awards were granted during the six months ended September 26, 2020 as the Company has elected to temporarily issue service-based RSUs in lieu of performance-based RSUs as a result of business disruptions and uncertainty created by the COVID-19 pandemic. A summary of performance-based RSU activity during the six months ended September 26, 2020 is as follows:
|  | Number of Performance-based RSUs
|  | (thousands)
Unvested at March 28, 2020 |  | 934 |
Granted |  | — |
Change due to performance condition achievement |  | 185 |
Vested |  | (720 | )
Forfeited |  | (27 | )
Unvested at September 26, 2020 |  | 372 |
Market-based RSUs The Company grants market-based RSUs, which are based on TSR performance, to its senior executives and other key employees. The Company estimates the fair value of its TSR awards on the date of grant using a Monte Carlo simulation, which models multiple stock price paths of the Company's Class A common stock and that of its peer group to evaluate and determine its ultimate expected relative TSR performance ranking. Compensation expense, net of estimated forfeitures, is recorded regardless of whether, and the extent to which, the market condition is ultimately satisfied. The weighted-average grant date fair values of market-based RSUs granted was $90.59 per share during the six months ended September 28, 2019. No such awards were granted during the six months ended September 26, 2020 as the Company has elected to temporarily issue service-based RSUs in lieu of market-based RSUs as a result of business disruptions and uncertainty created by the COVID-19 pandemic. The assumptions used to estimate the fair value of TSR awards granted during the six months ended September 28, 2019 were as follows:
| Six Months Ended
| September 28, 2019
Expected term (years) | 2.6 |
Expected volatility | 31.4 | %
Expected dividend yield | 3.2 | %
Risk-free interest rate | 1.4 | %
A summary of market-based RSU activity during the six months ended September 26, 2020 is as follows:
|  | Number of Market-based RSUs
|  | (thousands)
Unvested at March 28, 2020 |  | 234 |
Granted |  | — |
Change due to market condition achievement |  | — |
Vested |  | — |
Forfeited |  | — |
Unvested at September 26, 2020 |  | 234 |
Stock Options A summary of stock option activity under all plans during the six months ended September 26, 2020 is as follows:
|  | Number of Options
|  | (thousands)
Options outstanding at March 28, 2020 |  | 518 |
Granted |  | — |
Exercised |  | — |
Cancelled/Forfeited |  | (247 | )
Options outstanding at September 26, 2020 |  | 271 |

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