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Equity-Based Compensation | 12 Months Ended
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Dec. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Equity-Based Compensation |
6. | Equity-Based Compensation
The Company issues stock-based awards through the Shareholder Value Plan, Long-Term Growth Plan, Restricted Award Plan, and Incentive Award Plan. Through these plans the Company may issue stock options (including incentive and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, an “other” stock or cash-based awards, or a dividend equivalent award. The compensation expense for these awards is recorded in Indirect, general and administrative expenses” in the Company’s consolidated financial statements. Stock-based compensation expense was $18.8 million, $16.3 million and $49.0 million for the years ended December 29, 2017, December 31, 2018 and December 31, 2019, respectively, net of recognized tax benefits of $0.2 million, $0.2 million and $16.7 million for the years ended 2017, 2018 and 2019, respectively. The tax benefit realized related to awards vested during the years ended 2017, 2018, and 2019 was $0.1 million, $0.2 million and $3.3 million, respectively. We recognize forfeitures as they occur. With the adoption of the Incentive Award Plan on April 15, 2019, the Company has discontinued issuing awards under the other plans described above. Outstanding awards granted out of the discontinued plans will continue to vest and will settle in cash. At December 31, 2019, the amount of compensation cost relating to non-vested awards not yet recognized in the consolidated financial statements is $16.5 million. The majority of these unrecognized compensation costs will be recognized by the 3rd quarter of fiscal 2020. As discussed in “Note 1—Description of Operations”, the Company consummated its IPO on May 8, 2019. Subsequent to the IPO, the fair value of a share of the Company’s common stock is based on quoted prices on the NYSE. Please see “Note 19—Fair Value of Financial Instruments” for a description of how the fair value of a share of the Company’s common stock was determined prior to the IPO. Stock Appreciation Rights Stock Appreciation Rights (“SARs”) were issued under the Shareholder Value Plan (“SVP”). Outstanding awards provide a cash incentive based on the increase in the Company’s share price over a three-year period, multiplied by a number of phantom share units. If at the end of a performance cycle the Company’s share price has not increased, then no award payment will be made. The awards issued under the SVP are time-vested cash-settled SARs. The SARs vest at the end of three years and expense is recognized on an accelerated basis over the vesting period. The grant date fair value of the award is determined by using the Black-Scholes option-pricing model. SARs are remeasured, using the Black-Scholes option-pricing model, to an updated fair value at each reporting period until the award is settled. The fair value of the grant on the vesting date is determined based on the 60-trading day weighted average closing price of the Company’s common stock on the NYSE. Compensation cost is trued-up at each reporting period for changes in fair value pro-rated for the portion of the requisite service period rendered. The following table presents the assumptions used in the Black-Scholes option-pricing model for SARs outstanding at the year-end measurement date:
|  | December 31, 2019 |
Dividend yield |  |  | 0.0 | %
Expected volatility |  |  | 31.0 | %
Risk-free interest rate |  |  | 1.6 | %
Expected term |  |  | 1.0 |
The following table presents the number of SARs granted, vested, and forfeited for the years ended December 29, 2017, December 31, 2018, and December 31, 2019:
| Number of Units |  |  | Weighted Average Grant-Date Fair Value |
Unvested at December 30, 2016 |  | 3,170,565 |  |  | $ | 3.00 |
Granted |  | 2,096,439 |  |  | $ | 3.00 |
Vested |  | (1,573,998 | ) |  | $ | 3.00 |
Forfeited |  | (297,631 | ) |  | $ | 3.00 |
Unvested at December 29, 2017 |  | 3,395,375 |  |  | $ | 3.00 |
Granted |  | 1,708,746 |  |  | $ | 3.00 |
Vested |  | (1,322,805 | ) |  | $ | 3.00 |
Forfeited |  | (364,662 | ) |  | $ | 3.00 |
Unvested at December 31, 2018 |  | 3,416,654 |  |  | $ | 3.00 |
Granted |  | — |  |  | $ | — |
Vested |  | (1,547,142 | ) |  | $ | 3.00 |
Forfeited |  | (391,884 | ) |  | $ | 3.00 |
Unvested at December 31, 2019 |  | 1,477,628 |  |  | $ | 3.00 |
Long-Term Growth Units Long-Term Growth Units awards were issued under the Long-Term Growth Plan. Outstanding awards provide a cash incentive based on performance conditions. The grant date fair value of the award is based on fair value of the Company’s common stock on the grant day. These awards vest at the end of three years and expense is recognized on an accelerated basis over the vesting period subject to the probability of meeting the performance requirements and adjusted for the number of shares expected to be earned. Awards are remeasured to an updated fair value at each reporting period until the award is settled. The updated fair value is based on the 60-trading day weighted average closing price of the Company’s common stock on the NYSE on the last day of the reporting period. Compensation cost is trued-up at each reporting period for changes in fair value and expected shares pro-rated for the portion of the requisite service period rendered. The following table presents the number of Long-Term Growth Units granted, vested, and forfeited (at target shares) for the years ended December 29, 2017, December 31, 2018, and December 31, 2019:
| Number of Units |  |  | Weighted Average Grant-Date Fair Value |
Unvested at December 30, 2016 |  | 331,986 |  |  | $ | 19.65 |
Granted |  | 174,270 |  |  | $ | 20.33 |
Vested |  | (176,781 | ) |  | $ | 19.33 |
Forfeited |  | (21,594 | ) |  | $ | 20.09 |
Unvested at December 29, 2017 |  | 307,881 |  |  | $ | 20.18 |
Granted |  | 144,777 |  |  | $ | 22.67 |
Vested |  | (136,221 | ) |  | $ | 20.00 |
Forfeited |  | (16,656 | ) |  | $ | 20.27 |
Unvested at December 31, 2018 |  | 299,781 |  |  | $ | 20.23 |
Granted |  | — |  |  | $ | — |
Vested |  | (137,760 | ) |  | $ | 20.33 |
Forfeited |  | (34,584 | ) |  | $ | 21.50 |
Unvested at December 31, 2019 |  | 127,437 |  |  | $ | 21.45 |
Restricted Award Units Restricted Award Units awards were issued under the Restricted Award Plan. Outstanding awards provide a cash incentive based on the fair value of the Company’s common stock on the vesting date. The grant date fair value of the award is based on the fair value of the Company’s common stock on the grant date. These awards vest and expense is recognized on an accelerated basis over the respective vesting periods. Awards are remeasured to an updated fair value at each reporting period until the award is settled. The updated fair value is based on the 60-trading day weighted average closing price of the Company’s common stock on the NYSE on the last day of the reporting period. Compensation cost is trued-up at each reporting period for changes in fair value pro-rated for the portion of the requisite service period rendered. The following table presents the number of Restricted Award Units granted, vested, and forfeited for the years ended December 29, 2017, December 31, 2018, and December 31, 2019:
| Number of Units |  |  | Weighted Average Grant-Date Fair Value |
Unvested at December 30, 2016 |  | 534,355 |  |  | $ | 19.85 |
Granted |  | 306,843 |  |  | $ | 20.33 |
Vested |  | (135,982 | ) |  | $ | 19.53 |
Forfeited |  | (45,771 | ) |  | $ | 19.90 |
Unvested at December 29, 2017 |  | 659,445 |  |  | $ | 20.14 |
Granted |  | 262,140 |  |  | $ | 22.67 |
Vested |  | (264,408 | ) |  | $ | 20.00 |
Forfeited |  | (67,827 | ) |  | $ | 20.34 |
Unvested at December 31, 2018 |  | 589,350 |  |  | $ | 21.31 |
Granted |  | — |  |  | $ | — |
Vested |  | (281,805 | ) |  | $ | 20.33 |
Forfeited |  | (58,101 | ) |  | $ | 21.31 |
Unvested at December 31, 2019 |  | 249,444 |  |  | $ | 22.40 |
The following table presents the amount paid for cash settled awards, by award type, for the years ended December 29, 2017, December 31, 2018, and December 31, 2019 (in thousands):
|  | December 29, 2017 |  |  | December 31, 2018 |  |  | December 31, 2019 |
Stock Appreciation Rights |  | $ | 170 |  |  | $ | 4,576 |  |  | $ | 5,261 |
Long-Term Growth |  |  | 8,246 |  |  |  | 1,095 |  |  |  | 1,108 |
Restricted Award Units |  |  | 2,635 |  |  |  | 4,439 |  |  |  | 5,537 |
Total |  | $ | 11,051 |  |  | $ | 10,110 |  |  | $ | 11,906 |
Restricted Stock Units Restricted Stock Units awards are issued under the Incentive Award Plan and are settled by the issuance of the Company’s common stock. Outstanding awards have been granted based on either service or service and performance conditions. The fair value of the award is based on the closing price of the Company’s common stock on the grant date. Awards vest over three-year periods, either annually or cliff. Expense is recognized on an accelerated basis for awards with service conditions only and on a straight-line basis for awards that include performance conditions. Expense recognition of awards with performance criteria are subject to the probability of meeting the performance conditions and adjusted for the number of shares expected to be earned. Compensation cost for awards with performance conditions are trued-up at each reporting period for changes in the expected shares pro-rated for the portion of the requisite service period rendered. The following table presents the number of shares of restricted stock units granted (at target shares for awards with performance conditions) for the year ended December 31, 2019:
|  | December 31, 2019 |  |  | Weighted Average Grant-Date Fair Value |
Restricted Stock Units (service condition) |  |  | 270,544 |  |  | $ | 34.11 |
Restricted Stock Units (service and performance condition) |  |  | 327,675 |  |  | $ | 34.02 |
The number of units granted for awards with performance conditions in the above table is based on performance against the target amount. The number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions related to the awards. The following table presents the number and weighted average grant-date fair value of restricted stock units (at target shares for awards with performance conditions) at December 31, 2019:
|  | Number of Units |  |  | Weighted Average Grant-Date Fair Value |
Outstanding at December 31, 2018 |  |  | - |  |  | $ | - |
Granted |  |  | 598,219 |  |  |  | 34.06 |
Vested |  |  | (74,704 | ) |  |  | 34.02 |
Forfeited |  |  | (16,875 | ) |  |  | 34.02 |
Outstanding at December 31, 2019 |  |  | 506,640 |  |  | $ | 34.07 |
For the year ended December 31, 2019, 74,704 shares of restricted stock units were issued, and 27,962 shares of common stock related to employee statutory income tax withholding were retired. The following table presents the number of shares of restricted stock outstanding (at target shares for awards with performance conditions) at December 31, 2019:
|  | December 31, 2019 |  |  | Weighted Average Grant-Date Fair Value |
Restricted Stock Units (service condition) |  |  | 189,090 |  |  | $ | 34.15 |
Restricted Stock Units (service and performance condition) |  |  | 317,550 |  |  | $ | 34.02 |

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