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Share-based Compensation

12 Months Ended

Dec. 26, 2023

Share-based Compensation

Share-based Compensation

(14) Share-based Compensation

On May 13, 2021, our shareholders 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.

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 certain members of management 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 26,			December 27,			December 28,
​		2023		​	2022		​	2021
Labor expense	​	$	11,470	​	$	10,656	​	$	10,323
General and administrative expense	​		22,760	​		26,007	​		27,816
Total share-based compensation expense	​	$	34,230	​	$	36,663	​	$	38,139

​

We recognize expense for RSUs and PSUs over the vesting term based on the grant date fair value of the award. We record forfeitures as they occur. Activity for our share-based compensation by type of grant for the year ended December 26, 2023 is presented below.

Summary Details for RSUs

​

​	​	​	​	​	​	​	​	​	​	​
​		​		Weighted-Average			Weighted-Average		​	​
​	​	​	​	Grant Date Fair		​	Remaining Contractual	​	Aggregate
​	​	Shares	​	Value		​	Term (years)	​	Intrinsic Value
Outstanding at December 27, 2022		494,839	​	$	84.55	​	​	​	​	​
Granted		346,013	​	​	103.87	​	​	​	​	​
Forfeited		(38,111)	​	​	90.34	​	​	​	​	​
Vested		(360,414)	​	​	85.48	​	​	​	​	​
Outstanding at December 26, 2023		442,327	​	$	98.41		0.9	​	$	53,602

​

As of December 26, 2023, with respect to unvested RSUs, there was $20.6 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 0.9 years. The vesting terms of all RSUs range from 1.0 to 5.0 years. The total intrinsic value of RSUs vested during the years ended December 26, 2023, December 27, 2022 and December 28, 2021 was $37.8 million, $37.1 million and $54.7 million, respectively. The excess tax benefit associated with vested RSUs for the years ended December 26, 2023, December 27, 2022 and December 28, 2021 was $1.7 million, $0.4 million and $4.3 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 27, 2022		29,600	​	$	87.52	​	​	​	​	​
Granted		40,000	​	​	95.76	​	​	​	​	​
Performance shares adjustment (1)	​	6,179	​	​	85.46	​	​	​	​	​
Forfeited		(8,700)	​	​	91.85	​	​	​	​	​
Vested		(31,379)	​	​	87.05	​	​	​	​	​
Outstanding at December 26, 2023		35,700	​	$	94.61		0.1	​	$	4,324

(1) Additional shares from the January 2022 PSU grant that vested in January 2023 due to exceeding the initial 100% target.

We grant PSUs to certain members of management 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 26, 2023, December 27, 2022 and December 28, 2021 was $3.3 million, $5.4 million and $0.4 million, respectively.

On January 8, 2024, approximately 43,000 shares vested related to the January 2023 PSU grant and are expected to be distributed during the 13 weeks ending March 26, 2024. As of December 26, 2023, 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. The allowable excess tax benefit associated with vested PSUs for the years ended December 26, 2023, December 27, 2022 and December 28, 2021 was not significant.

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- Definition

The entire disclosure for share-based payment arrangement.

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