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Share Based Compensation

12 Months Ended

Dec. 27, 2022

(14) Share-based Compensation

On May 13, 2021, our stockholders approved the Texas Roadhouse, Inc. 2021 Long-Term Incentive Plan (the "Plan"). The Plan provides for the granting of various forms of equity awards including options, stock appreciation rights, full value awards, and performance-based awards. This plan replaced the 2013 Long-Term Incentive Plan and no subsequent awards will be granted under the 2013 plan.

The Company provides restricted stock units ("RSUs") to employees as a form of share-based compensation. A RSU is the conditional right to receive one share of common stock upon satisfaction of the vesting requirement. In addition to RSUs, the Company provides performance stock units ("PSUs") to executives as a form of share-based compensation. A PSU is the conditional right to receive one share of common stock upon meeting a performance obligation along with the satisfaction of the vesting requirement.

The following table summarizes the share-based compensation recorded in the accompanying consolidated statements of income and comprehensive income:


	Fiscal Year Ended
	December 27,		December 28,		December 29,
	2022		2021		2020
Labor expense	$	10,656	$	10,323	$	10,081
General and administrative expense		26,007		27,816		19,350
Total share-based compensation expense	$	36,663	$	38,139	$	29,431

Share-based compensation activity by type of grant as of December 27, 2022 and changes during the period then ended are presented below. We recognize expense for RSUs and PSUs over the vesting term based on the grant date fair value of the award. We do not estimate forfeitures as we record them as they occur.

Summary Details for RSUs


		Weighted-Average		Weighted-Average
		Grant Date Fair		Remaining Contractual	Aggregate
	Shares	Value		Term (years)	Intrinsic Value
Outstanding at December 28, 2021	558,183	$	82.52
Granted	395,859		88.40
Forfeited	(45,207)		84.26
Vested	(413,996)		85.37
Outstanding at December 27, 2022	494,839	$	84.55	0.9	$	47,663

As of December 27, 2022, with respect to unvested RSUs, there was $18.5 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 0.9 years. The vesting terms of the RSUs range from 1.0 to 5.0 years. The total intrinsic value of RSUs vested during the years ended December 27, 2022, December 28, 2021 and December 29, 2020 was $37.1 million, $54.7 million and $30.5 million, respectively. The excess tax benefit associated with vested RSUs for the years ended December 27, 2022, December 28, 2021 and December 29, 2020 was $0.4 million, $4.3 million and $0.4 million, respectively, which was recognized in the income tax provision.

Summary Details for PSUs


		Weighted-Average		Weighted-Average
		Grant Date Fair		Remaining Contractual	Aggregate
	Shares	Value		Term (years)	Intrinsic Value
Outstanding at December 28, 2021	31,952	$	86.22
Granted	29,600		86.41
Performance shares adjustment (1)	28,074		84.96
Forfeited	—		—
Vested	(60,026)		86.22
Outstanding at December 27, 2022	29,600	$	87.52	0.1	$	2,851

(1)	Additional shares from the January 2021 PSU grant that vested in January 2022 due to exceeding the initial 100% target.

We grant PSUs to certain of our executives subject to a one-year vesting and the achievement of certain earnings targets, which determine the number of units to vest at the end of the vesting period. Share-based compensation expense is recognized for the number of units expected to vest at the end of the period and is expensed beginning on the grant date and through the performance period. For each grant, PSUs vest after meeting the performance and service conditions. The total intrinsic value of PSUs vested during the years ended December 27, 2022, December 28, 2021 and December 29, 2020 was $5.4 million, $0.4 million and $5.4 million, respectively.

On January 8, 2023, 31,379 shares vested related to the January 2022 PSU grant and are expected to be distributed during the 13 weeks ending March 28, 2023. As of December 27, 2022, with respect to unvested PSUs, the amount of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 0.1 year was not significant. There was no allowable excess tax benefit associated with vested PSUs for the years ended December 27, 2022, December 28, 2021 and December 29, 2020.