STOCK-BASED COMPENSATION

12 Months Ended

Dec. 30, 2023

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

(12) STOCK-BASED COMPENSATION

The Company maintains stock‑based compensation plans approved by the shareholders, which provide that the Human Resources Committee of the Board of Directors may grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, and bonuses of common stock. As of December 30, 2023, 1,513,652 shares of common stock remained available for issuance under the plans. Shares and options issued and available are subject to changes in capitalization. The Company’s policy is to issue shares upon exercise of stock options or vesting of restricted stock units or issuance of restricted stock from treasury shares held by the Company.

Stock options granted under the plans call for the exercise price of each option to equal the closing market price as of the date of the grant. Options vest beginning on the first anniversary of the grant date in equal amounts over three years or on the grant’s fifth anniversary date. Expiration of grants is seven to ten years from the date of the award. Restricted stock units and awards generally vest in equal installments over three or four years beginning on the first anniversary of the grant. For the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, the Company recorded $39,219, $41,850, and $28,720 of compensation expense (included in “Selling, general, and administrative expenses” in the Consolidated Statements of Earnings) for all share-based compensation programs, respectively. The associated tax benefits recorded for the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, were $7,092, $10,463, and $7,180, respectively.

As of December 30, 2023, the amount of unrecognized stock option compensation expense, to be recognized over a weighted average period of 2.00 years, was approximately $6,408. During the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, compensation expense for stock options was $3,687, $3,120, and $2,538, respectively.

The Company uses a binomial option pricing model to value its stock options. The fair value of each option grant made as of December 30, 2023, December 31, 2022, and December 25, 2021 was estimated using the following assumptions:

	December 30,		December 31,		December 25,
	2023		2022		2021
Expected volatility	31.97	%	32.36	%	33.01	%
Risk-free interest rate	4.21	%	3.75	%	1.26	%
Expected life from vesting date	5.4 yrs		5.4 yrs		4.0 yrs
Dividend yield	0.87	%	1.10	%	1.20	%

The following is a summary of the stock option activity during the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021:

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
Outstanding as of December 31, 2022	195,690	$	214.62
Granted	43,340		226.55
Exercised	(39,055)		155.24
Forfeited	(18,445)		307.81
Outstanding as of December 30, 2023	181,530	$	220.77	7.99	$	5,992
Options vested or expected to vest as of December 30, 2023	178,820	$	220.31	7.96		5,975
Options exercisable as of December 30, 2023	116,545	$	203.78	7.13		5,576

The weighted average per share fair value of options granted during the fiscal year ended December 31, 2023 was $72.60.

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
Outstanding as of December 25, 2021	276,464	$	164.48
Granted	40,564		332.63
Exercised	(121,163)		139.89
Forfeited	(175)		104.47
Outstanding as of December 31, 2022	195,690	$	214.62	7.53	$	22,644
Options vested or expected to vest as of December 31, 2022	189,267	$	212.69	7.48		22,261
Options exercisable as of December 31, 2022	90,556	$	172.08	6.40		14,276

The weighted average per share fair value of options granted during the fiscal year ended December 31, 2022 was $104.01.

				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
Outstanding as of December 26, 2020	399,565	$	141.79
Granted	47,223		252.89
Exercised	(169,908)		135.76
Forfeited	(416)		132.84
Outstanding as of December 25, 2021	276,464	$	164.48	5.88	$	22,586
Options vested or expected to vest as of December 25, 2021	268,338	$	163.42	5.80		22,188
Options exercisable as of December 25, 2021	154,860	$	142.15	4.00		15,896

The weighted average per share fair value of options granted during the fiscal year ended December 25, 2021 was $67.81.

In accordance with shareholder-approved plans, the Human Resources Committee of the Board of Directors may grant stock under various stock‑based compensation arrangements, including restricted stock awards, restricted stock units, performance-based restricted stock units, and stock issued in lieu of cash bonuses. Under such arrangements, stock is issued without direct cost to the employee. The restricted stock units are settled in Company stock when the restriction period ends. Restricted stock units and awards generally vest in equal installments over three years beginning on the first anniversary of the grant. During the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, the Company granted restricted stock units to directors and certain management employees as follows (which are not included in the above stock plan activity tables):

	Fiscal Year Ended
	December 30,		December 31,		December 25,
	2023		2022		2021
Restricted stock units granted		67,723		60,901		216,971
Weighted‑average per share price on grant date	$	233.96	$	313.75	$	236.28
Recognized compensation expense	$	22,478	$	22,664	$	16,147

During the second half of fiscal 2021, the Company granted 159,982 restricted stock units, worth $36,916, to certain employees of Prospera, of which 50,141 remain outstanding as of December 30, 2023. These restricted stock units vest in equal installments over four years and require the employees to continue employment over those four years. As such, the related compensation expense will be incurred over the vesting period.

As of December 30, 2023, the amount of deferred stock‑based compensation granted, to be recognized over a weighted‑average period of 2.12 years, was approximately $33,933.

Performance-based restricted stock units (“PSUs”) awards consist of shares of the Company’s stock which are payable upon the determination that the Company achieves certain established performance targets and can range from 0% to 200% of the targeted payout based on the actual results. PSUs granted in the fiscal years ended December 30, 2023 and December 31, 2022 have a performance period of three years. The fair value of each PSU granted is equal to the fair market value of the Company’s common stock on the date of grant. PSUs granted generally have a three-year period cliff vesting schedule; however, according to the grant agreements, if certain conditions are met, the employee (or beneficiary) will receive a prorated amount of the award based on active employment during the service period.

During the fiscal years ended December 30, 2023, December 31, 2022, and December 25, 2021, the Company granted PSU awards as follows (which are not included in the above stock plan activity tables):

	Fiscal Year Ended
	December 30,		December 31,		December 25,
	2023		2022		2021
Shares granted		38,201		33,736		41,060
Weighted‑average per share price on grant date	$	299.20	$	215.15	$	230.40
Recognized compensation expense	$	13,054	$	16,066	$	10,035