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EQUITY-BASED COMPENSATION | 12 Months Ended
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Dec. 27, 2023
Share-Based Payment Arrangement [Abstract] |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION A summary of equity-based compensation expense by award type was as follows:
|  | 2023 |  | 2022 |  | 2021
Stock options | $ | — |  |  | $ | — |  |  | $ | 3 |
Performance stock units | 3,149 |  |  | 4,199 |  |  | 3,471 |
Restricted stock units | 11,739 |  |  | 9,127 |  |  | 5,229 |
Equity-based compensation expense | $ | 14,888 |  |  | $ | 13,326 |  |  | $ | 8,703 |
Total income tax benefit recognized related to equity-based compensation | $ | 391 |  |  | $ | 302 |  |  | $ | 223 |
Equity-based compensation expense recognized was as follows:
|  | 2023 |  | 2022 |  | 2021
General and administrative expenses | $ | 13,587 |  |  | $ | 12,305 |  |  | $ | 7,907 |
Labor and related expenses | 1,301 |  |  | 1,021 |  |  | 796 |
Equity-based compensation expense | $ | 14,888 |  |  | $ | 13,326 |  |  | $ | 8,703 |
The Company capitalized $286, $192 and $100 of equity-based compensation expense associated with the construction cost of our Shacks and certain digital and technology projects, during fiscal 2023, fiscal 2022 and fiscal 2021, respectively. Restricted Stock Units In January 2015, the Company adopted the 2015 Incentive Award Plan (the "2015 Plan") under which it may grant up to 5,865,522 restricted stock units and other equity-based awards to team members, directors and officers. The restricted stock units granted generally vest equally over periods ranging from one to five years. The fair value of restricted stock units is determined based on the closing market price of our Class A common stock on the date of grant. Compensation expense related to the restricted stock units is recognized using a straight-line attribution method over the vesting period. A summary of restricted stock unit activity was as follows:
|  | Restricted Stock Units |  | Weighted Average Grant Date Fair Value
Outstanding as of December 28, 2022 | 395,853 |  |  | $ | 76.82 |
| Granted | 326,692 |  |  | 58.26 |
| Vested | (147,163) |  |  | 70.29 |
| Forfeited | (63,838) |  |  | 68.94 |
Outstanding as of December 27, 2023 | 511,544 |  |  | $ | 67.82 |
As of December 27, 2023, there were 511,544 restricted stock units outstanding, of which none were vested. The weighted average grant date fair value of share awards granted during fiscal 2023, fiscal 2022 and fiscal 2021 were $58.26, $71.25, and $117.39, respectively. The total fair value of shares vested during fiscal 2023, fiscal 2022 and fiscal 2021 was $10,382, $5,936 and $8,385, respectively. As of December 27, 2023, total unrecognized compensation expense related to unvested restricted stock units was $25,159, which is expected to be recognized over a weighted average period of 2.6 years. Performance Stock Units Under the 2015 Plan, the Company may grant performance stock units and other types of performance-based equity awards that vest based on the outcome of certain performance criteria that are established and approved by the Compensation Committee of the Board of Directors. The actual number of equity awards earned is based on the level of performance achieved over a predetermined performance period, relative to established financial goals, none of which are considered market conditions. For performance stock units granted during fiscal 2022, the amount of awards that can be earned ranges from 0% to 200% of the number of performance stock units granted, based on the achievement of approved financial goals over a 1-year or 3-year performance period. In addition to the performance conditions, performance stock units are also subject to a requisite service period and the awards vest ratably over 4 years years or cliff vest over 3 years. No performance stock units were granted during fiscal 2023. The fair value of performance stock units is determined based on the closing market price of our Class A common stock on the date of grant. Compensation expense related to the performance stock units is recognized using either a graded-vesting attribution method or straight-line over the vesting period based on the most probable outcome of the performance conditions. A summary of performance stock unit activity was as follows:
|  | Performance Stock Units |  | Weighted Average Grant Date Fair Value
Outstanding as of December 28, 2022 | 159,822 |  |  | $ | 92.22 |
| Granted | — |  |  | — |
| Performance achievement(1) | — |  |  | — |
| Vested | (25,494) |  |  | 91.36 |
| Forfeited | (12,903) |  |  | 88.70 |
Outstanding as of December 27, 2023 | 121,425 |  |  | $ | 92.77 |
(1)Represents the incremental awards earned and/or awards forfeited based on the achievement of performance conditions. As of December 27, 2023, there were 121,425 performance stock units outstanding, of which none were vested. The weighted average grant date fair value of share awards granted during fiscal 2023, fiscal 2022 and fiscal 2021 was nil, nil, and $98.87, respectively. The total fair value of awards that vested during fiscal 2023, fiscal 2022 and fiscal 2021 was $1,441, $1,869 and $3,083, respectively. As of December 27, 2023, total unrecognized compensation expense related to unvested performance stock units was $3,147, which is expected to be recognized over a weighted average period of 1.1 years. Stock Options Under the 2015 Plan, the Company may grant stock options to team members, directors and officers. The stock options granted generally vest equally over periods ranging from one to five years. The Company does not use cash to settle any of the equity-based awards, and issues new shares of Class A common stock upon the exercise of stock options. The fair value of stock option awards was determined on the grant date using the Black-Scholes valuation model based on the following weighted average assumptions:
| 2023 |  | 2022 |  | 2021
Expected term (years)(1) | 0 |  | 0 |  | 7.5
Expected volatility(2) | — | % |  | — | % |  | 45.4 | %
Risk-free interest rate(3) | — | % |  | — | % |  | 1.4 | %
Dividend yield(4) | — | % |  | — | % |  | — | %
(1)Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method. (2)Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term. (3)The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term. (4)A dividend yield of zero was used as the Company have no plans to declare dividends in the foreseeable future. A summary of stock option activity was as follows:
|  | Stock Options |  | Weighted Average Exercise Price |  | Aggregate Intrinsic Value |  | Weighted Average Remaining Contractual Life (Years)
Outstanding as of December 28, 2022 | 134,031 |  |  | $ | 21.88 |  |  |  |  |
| Granted | — |  |  | — |  |  |  |  |
| Exercised | (33,406) |  |  | 22.39 |  |  |  |  |
| Forfeited | — |  |  | — |  |  |  |  |
Outstanding as of December 27, 2023 | 100,625 |  |  | $ | 21.71 |  |  | $ | 5,457 |  |  | 1.2
Options vested and exercisable as of December 27, 2023 | 100,625 |  |  | $ | 21.71 |  |  | $ | 5,457 |  |  | 1.2
Options expected to vest as of December 27, 2023 | — |  |  | $ | — |  |  | $ | — |  |  | —
As of December 27, 2023, total unrecognized compensation expense related to unvested stock options was nil. Cash received from stock options exercised was $744 and the cash tax benefit realized for the tax deductions from these option exercises was $203 for fiscal 2023. The weighted average grant date fair value of options granted during fiscal 2023, fiscal 2022 and fiscal 2021 was nil, nil, $58.92, respectively. The total intrinsic value of stock options exercised during fiscal 2023, fiscal 2022 and fiscal 2021 was $1,426, $631 and $30,533, respectively. The total fair value of stock options vested during fiscal 2023, fiscal 2022 and fiscal 2021 was nil, nil and $60, respectively. The following table summarizes information about stock options outstanding and exercisable as December 27, 2023:
|  |  | Options Outstanding and Exercisable |  |
|  |  | Number Outstanding at December 27, 2023 |  | Weighted Average Remaining Contractual Life (Years) |  | Weighted Average Exercise Price |  |  |  |  |  |
Exercise Price |  |  |  |  |  |
$ | 21.00 |  |  |  | 95,511 |  |  | 1.1 |  | $ | 21.00 |  |  |  |  |  |  |
$ | 34.62 |  |  |  | 4,006 |  |  | 2.4 |  | $ | 34.62 |  |  |  |  |  |  |
$ | 36.41 |  |  |  | 1,108 |  |  | 2.9 |  | $ | 36.41 |  |  |  |  |  |  |

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