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Stock-Based Compensation | 12 Months Ended
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Jan. 01, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation Under the Equity Incentive Plan, amended and restated February 15, 2017 and approved by the stockholders of the Company on May 10, 2017 (the “EIP”), the Company may grant to key employees restricted stock and performance awards associated with the Company’s Class A stock. The amended EIP provides that the maximum number of shares available for grants is 4.7 million. Shares available for future grants at year-end 2022 are 2.7 million. The Company issues shares out of treasury stock to satisfy stock-based awards, if available; otherwise new shares of common stock are issued from authorized shares. The Company presently has no intent to repurchase additional shares for the purpose of satisfying stock-based awards. The Company recognized stock-based compensation cost of $7.8 million in 2022, $5.1 million in 2021 and $3.9 million in 2020, as well as related tax benefits of $1.1 million in 2022, $0.8 million in 2021 and $0.4 million in 2020. Restricted Stock Restricted stock, which typically vests pro-rata over four years, is issued to certain key employees and is subject to forfeiture until the end of an established restriction period. The Company utilizes the market price of its Class A stock on the date of grant as the fair value of restricted stock and expenses the fair value on a straight-line basis over the vesting period. A summary of the status of nonvested restricted stock as of year-end 2022 and changes during this period is presented as follows below (in thousands of shares except per share data):
| Restricted Stock |  | Weighted Average Grant Date Fair Value
Nonvested at year-end 2021 | 403 |  |  | $ | 21.24 |
Granted | 417 |  |  | 20.16 |
Vested | (112) |  |  | 22.25 |
Forfeited | (101) |  |  | 21.51 |
Nonvested at year-end 2022 | 607 |  |  | $ | 20.27 |
As of year-end 2022, unrecognized compensation cost related to unvested restricted stock totaled $8.9 million. The weighted average period over which this cost is expected to be recognized is approximately 1.9 years. The weighted average grant date fair value per share of restricted stock granted during 2022, 2021 and 2020 was $20.16, $20.91 and $15.97, respectively. The total fair value of restricted stock, which vested during 2022, 2021 and 2020, was $2.3 million, $2.0 million and $2.4 million, respectively. Performance Shares During 2022, 2021 and 2020, the Company granted performance awards associated with the Company’s Class A stock to certain senior officers. The payment of performance awards, which will be satisfied with the issuance of shares out of treasury stock, is contingent upon the achievement of specific performance goals unique to each grant ("financial measure performance awards") over a stated period of time. Additionally, the Company also granted single financial measure performance shares to certain senior officers, which will be satisfied with the issuance of shares out of treasury stock, and is contingent upon the achievement of one performance measure with a one-year performance period. These single financial measure performance shares vest over four years and earn dividends, which are not paid until the awards vest. On May 18, 2021, the Compensation Committee approved a modification to the performance goals of our 2021 and 2020 financial measure performance awards to increase the goals to reflect the results of the acquisition of Softworld. We accounted for this change as a Type I modification under ASC 718 as the expectation of the achievement of certain performance conditions related to these awards remained probable-to-probable post-modification. The Company did not record any incremental stock compensation expense since the fair value of the modified awards immediately after the modification was not greater than the fair value of the original awards immediately before the modification. All service-based vesting conditions were unaffected by the modification. 2022 Grants The annual 2022 performance share grant ("2022 grant") consisted of 186,000 financial measure performance awards, which are contingent upon achievement of specific revenue growth and EBITDA margin performance goals. The maximum number of performance shares that may be earned is 200% of the target shares originally granted. These awards have three one-year performance periods: 2022, 2023 and 2024, with the payout for each performance period based on separate financial measure goals that are set in February of each of the three performance periods. Earned shares during each performance period will cliff vest in February 2025 after approval of the financial results by the Compensation Committee, if not forfeited by the recipient. No dividends are paid on these performance shares. Based upon the level of achievement of specific financial performance goals for the 2022 annual grant, participants had the ability to receive up to 200% of the target number of shares originally granted. On February 14, 2023, the Compensation Committee approved the actual performance achievement for the 2022 performance period of the annual 2022 grant. Actual performance resulted in participants achieving 72% of target. All of the shares earned for the 2022 performance period will vest in 2025 after the approval of the Compensation Committee, if not forfeited by the recipient. The 2022 financial measure performance awards have a weighted average grant date fair value of $21.19, which was determined by the market price on the date of grant less the present value of the expected dividends not received during the vesting period. The total nonvested shares related to 2022 financial measure performance awards at year-end 2022 is 186,000. 2021 Grants The annual 2021 performance share grant ("2021 grant") consisted of 180,000 financial measure performance awards, which are contingent upon the achievement of specific revenue growth and EBITDA margin performance goals. The maximum number of performance shares that may be earned is 200% of the target shares originally granted. These awards have three one-year performance periods: 2021, 2022 and 2023, with the payout for each performance period based on separate financial measure goals that are set in February of each of the three performance periods. For the 2021 and 2022 performance periods, half of the shares earned in each respective performance period will vest after achievement of the respective performance goals for the year and approval of the financial results by the Compensation Committee, in early 2022 and 2023, respectively, if not forfeited by the recipient. The remaining half of the shares earned for the 2021 and 2022 performance periods will vest in early 2024, based on continuous employment. For the 2023 performance period, any shares earned will vest after achievement of the 2023 performance goals for the year and approval of the financial results by the Compensation Committee in early 2024, if not forfeited by the recipient. No dividends are paid on these performance shares. Based upon the level of achievement of specific financial performance goals for the 2021 annual grant, participants had the ability to receive up to 200% of the target number of shares originally granted. On February 14, 2023, the Compensation Committee approved the actual performance achievement for the 2022 performance period of the annual 2021 grant. Actual performance resulted in participants achieving 72% of target. Half of the shares earned for the 2022 performance period will vest in 2023 after the approval of the Compensation Committee and the remaining half of the shares earned will vest in early 2024, if not forfeited by the recipient. In December 2021, the Compensation Committee approved an additional retention-based grant of 308,000 financial measure performance awards to certain senior officers and may be earned upon achievement of three financial goals over a performance period beginning in fiscal 2022 through the third quarter of 2024, with each goal having a unique projected achievement date. Each goal can be earned independent of the other two goals. A goal is considered earned once it is achieved and maintained for two consecutive quarters at any point during the performance period. Any goal not achieved within one year of projected achievement date, will result in that portion of the award being forfeited. Any shares earned during the performance period will cliff-vest three years after achievement of the respective performance goals and approval of the financial results by the Compensation Committee. These awards earn dividends once the goal is achieved, but are not paid until the awards vest. On February 14, 2023, the Compensation Committee approved the actual performance achievement of one of the financial goals related to the 2021 retention-based grant. At the same meeting, the Compensation Committee approved a modification to accelerate the vesting for the goal earned, where half of these awards will vest immediately upon approval of the results and the remaining half will vest in August 2023, if not forfeited by the recipient. We will account for this change as a Type I modification under ASC 718 as the expectation of vesting remained probable-to-probable post-modification. The Company did not record any incremental stock compensation expense since the fair value of the modified awards immediately after the modification was not greater than the fair value of the original awards immediately before the modification. The Company will recognize the remaining stock compensation expense over the remaining portion of the modified service requisite period. The 2021 financial measure performance awards have a weighted average grant date fair value of $18.21, which was determined by the market price on the date of grant less the present value of the expected dividends not received during the vesting period. The total nonvested shares related to 2021 financial measure performance awards at year-end 2022 is 423,000. 2020 Grant The 2020 performance share grant ("2020 grant") consisted of 115,000 single financial measure performance shares, which have a one-year performance period based on a specific operating earnings performance goal. The 2020 single financial measure performance awards have a weighted average grant date fair value of $22.59 per share, which was determined by the market price on the date of grant. On February 15, 2022, the Compensation Committee approved the actual performance achievement of the 2020 single financial measure performance award. These awards will vest over the next four years, if not forfeited by the recipient. The total nonvested shares related to 2020 single financial performance awards at year-end 2022 is 78,000. A summary of the status of all nonvested performance shares at target for 2022 is presented as follows below (in thousands of shares except per share data). The vesting adjustment in the table below represents the 2019 and a portion of the 2021 performance period of the 2021 financial measure performance shares that did not vest because actual achievement was below the threshold level and resulted in no payout.
| Financial Measure Performance Shares |  |
| Shares |  | Weighted Average Grant Date Fair Value |  |  |  |
Nonvested at year-end 2021 | 708 |  |  | $ | 20.03 |  |  |  |  |
Granted | 186 |  |  | 21.19 |  |  |  |  |
Vested | (48) |  |  | 22.55 |  |  |  |  |
Forfeited | (12) |  |  | 16.81 |  |  |  |  |
Vesting Adjustment | (142) |  |  | 24.45 |  |  |  |  |
Nonvested at year-end 2022 | 692 |  |  | $ | 19.41 |  |  |  |  |
As of year-end 2022, unrecognized compensation cost related to all unvested financial measure performance shares totaled $8.4 million. The weighted average period over which the costs are expected to be recognized is approximately 2.4 years for financial measure performance shares. The total fair value of financial measure performance shares, which vested during 2022, 2021 and 2020, was $0.9 million, $0.3 million and $1.8 million, respectively.

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