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Stock-Based Compensation | 6 Months Ended
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Jul. 01, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation The Corporation measures stock-based compensation expense at grant date, based on the fair value of the award. Forms of awards issued under shareholder approved plans include stock options, restricted stock units based on a service condition ("restricted stock units"), restricted stock units based on both performance and service conditions ("performance stock units"), and shares issued under member stock purchase plans. Stock-based compensation expense related to stock options, restricted stock units, and performance stock units is recognized over the employees’ requisite service periods, adjusted for an estimated forfeiture rate for those shares not expected to vest. Additionally, expense related to performance stock units is periodically adjusted for the probable number of shares to be awarded based on Corporation achievement within an established target range of cumulative profitability over a multi-year period. In the second quarter of 2023, the Corporation assumed the Kimball International, Inc. Stock Incentive Plan and its remaining share pool. The plan was renamed the “HNI Corporation Stock Incentive Plan for Legacy Kimball Employees”. Under this plan the Corporation may grant equity compensation awards using the plan’s share pool. At inception, there were approximately 1.1 million shares of the Corporation's stock available for issuance under this plan. The following table summarizes expense associated with these plans:
| Three Months Ended |  | Six Months Ended
| July 1, 2023 |  | July 2, 2022 |  | July 1, 2023 |  | July 2, 2022
Compensation cost | $ | 3.1 |  |  | $ | 2.9 |  |  | $ | 7.6 |  |  | $ | 8.5 |
The units granted by the Corporation had fair values as follows:
| Six Months Ended
| July 1, 2023 |  | July 2, 2022
Restricted stock units | $ | 12.1 |  |  | $ | 6.8 |
Performance stock units | $ | 6.0 |  |  | $ | 6.1 |
Included in the current year period restricted stock units total above is $6.1 million of fair value associated with replacement awards issued in the second quarter of 2023 in connection with the Kimball International acquisition. Approximately 48 percent of the fair value of the replacement awards is attributed to service provided by Kimball International employees prior to the acquisition by the Corporation and is accounted for as purchase consideration. See "Note 3. Acquisitions and Divestitures" for further information. The following table summarizes unrecognized compensation expense and the weighted-average remaining service period for non-vested stock units as of July 1, 2023:
| Unrecognized Compensation Expense |  | Weighted-Average Remaining Service Period (years)
Non-vested restricted stock units | $ | 6.0 |  |  | 0.7
Non-vested performance stock units | $ | 6.8 |  |  | 1.2

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