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EQUITY-BASED COMPENSATION
 6 Months Ended
Jun. 29, 2025
Share-Based Payment Arrangement [Abstract]  
EQUITY-BASED COMPENSATION EQUITY-BASED COMPENSATION
Equity-based compensation expense is calculated based on equity awards ultimately expected to vest and is reduced for estimated forfeitures. Forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates and an adjustment to equity-based compensation expense will be recognized at that time.

Equity-based compensation expense included in the Company’s consolidated statements of operations is as follows (in thousands):
Quarter EndedTwo Quarters Ended
June 29, 2025June 30, 2024June 29, 2025June 30, 2024
Labor$505 $546 $858 $954 
General and administrative expenses2,153 2,344 3,750 4,763 
Total equity-based compensation expense$2,658 $2,890 $4,608 $5,717 
Restricted Stock Units

During the two quarters ended June 29, 2025, the Company granted 589,745 RSUs, under the Portillo's Inc. 2021 Equity Incentive Plan (the "2021 Plan") to certain employees. During the two quarters ended June 29, 2025, we also granted 93,725 RSUs to non-employee directors under the 2021 Plan. The weighted average fair value of these awards was determined using the Company's closing stock price on the applicable grant dates, which was $12.08. The RSUs granted to employees will generally vest one-third on each of the first three anniversaries of the date of grant subject to continued service on such date. The RSUs granted to non-employee directors will vest at the end of this year.

Stock Options

During the quarter ended June 29, 2025, the Company granted 307,692 stock options under the 2021 Plan, to its President and Chief Executive Officer. The stock options vest on the fourth anniversary of the award and are exercisable within a 10-year period from the date of grant. The Company estimated the fair value of stock options on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which greatly affect the fair value of each stock option. The assumptions used to estimate the fair value of stock options granted during the quarter ended June 29, 2025 were as follows:

2025
Fair value of stock option
$6.50
Stock Price
$12.08
Risk-free interest rate
4.29%
Expected life (years)
6.3
Volatility
50.0%

Performance Stock Units
During the quarter and two quarters ended June 29, 2025, the Company granted 301,118 performance stock units ("PSUs") to its executive officers under the 2021 Plan. These PSUs will vest after the fiscal year ending December 26, 2027 based on continued service and the achievement of performance metrics. 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 tied to the cumulative growth of revenue and Adjusted EBITDA from fiscal year 2025 to fiscal year 2027. The fair value of these awards was determined using the Company's closing stock price on the date of grant of $12.08. Equity-based compensation costs associated with these PSUs are reassessed each reporting period based on estimated performance achievement. The cumulative effect on current and prior periods of a change in attainment is recognized in general and administrative expenses in the consolidated statements of operations in the period of change.