XML 37 R23.htm IDEA: XBRL DOCUMENT v3.25.0.1
Share-Based Awards
 12 Months Ended
Dec. 29, 2024
Share-Based Payment Arrangement [Abstract]  
Share-Based Awards Share-Based Awards
The Company has reserved 7.7 million shares of its common stock for issuance upon exercise of options and other awards granted or to be granted under stock incentive plans for employees and for non-employee members of the Board of Directors (collectively, the “Plans”). These awards generally vest and are expensed in equal annual amounts over three to five years. The plans provide that options be granted at exercise prices not less than the market value of the underlying common stock on the date the option is granted and options and share awards are adjusted for such changes as stock splits and stock dividends. Options are exercisable for periods of no more than seven years after date of grant. Upon exercise in the case of stock options, grant in the case of restricted stock or vesting in the case of performance based contingent stock and restricted stock unit grants, shares are issued out of available treasury shares. The Company’s current plan permits the granting of awards in the form of stock, stock appreciation rights, stock awards and cash awards in addition to stock options.
Total compensation expense related to stock options, restricted stock units, including those awards made to non-employee members of its Board of Directors, and stock performance awards during 2024, 2023 and 2022 was $50.8 million, $71.9 million and $81.3 million, respectively, and was recorded as follows:
(In millions)202420232022
Product development$10.2 $7.0 $4.8 
Selling, distribution and administration 40.6 64.9 76.5 
Total stock compensation expense before income taxes50.8 71.9 81.3 
Income tax benefit7.2 9.2 9.0 
Total stock compensation expense after income taxes$43.6 $62.7 $72.3 
The following table represents total stock compensation expense, net of performance adjustments, by award type related to stock performance awards, restricted stock units, stock options and awards made to non-employee members of the Company’s Board of Directors:
(In millions)202420232022
Stock performance awards$(6.4)$15.8 $9.6 
Restricted stock units51.0 47.8 60.7 
Stock options4.4 7.0 8.9 
Non-employee awards1.8 1.3 2.1 
Total stock compensation expense before income taxes50.8 71.9 81.3 
Income tax benefit7.2 9.2 9.0 
Total compensation expense after income taxes$43.6 $62.7 $72.3 
Stock Performance Awards
In 2024, 2023 and 2022, as part of its annual equity grant to executive officers and certain other employees, the Company issued contingent stock performance awards (the “Stock Performance Awards”). These awards provide the recipients with the ability to earn shares of the Company’s common stock based on the Company’s achievement of stated cumulative operating performance targets over the three fiscal years ended December 2026, December 2025, and December 2024 for the 2024, 2023 and 2022 awards, respectively. The 2022 Stock Performance Awards are measured based on achieving targets set for diluted earnings per share, revenue and return on invested capital ("ROIC"). The 2023 Stock Performance Awards are measured based on achieving targets set for diluted earnings per share and ROIC, in addition to a relative Total Shareholder Return ("TSR") modifier ranking as compared to the S&P 500, to determine the number of shares earned at the end of the performance period. The 2024 Stock Performance Awards are measured based on achieving targets set for diluted earnings per share, in addition to a TSR modifier ranking as compared to the S&P 500, to determine the number of shares earned at the end of the performance period. The ultimate amount of the award may vary from 0% to 250% of the target number of shares, depending on the cumulative results achieved.
Information with respect to Stock Performance Awards is as follows:
(In millions, except per share data)202420232022
Outstanding at beginning of year1.0 0.8 0.7 
Granted0.3 0.7 0.4 
Forfeited(0.3)(0.2)(0.1)
Canceled— (0.1)— 
Vested(0.1)(0.2)(0.2)
Outstanding at end of year0.9 1.0 0.8 
Weighted average grant-date fair value:
Granted$51.65 $56.00 $88.77 
Forfeited$61.35 $74.06 $80.77 
Canceled$— $56.49 $— 
Vested$96.07 $56.49 $86.90 
Outstanding at end of year$61.07 $70.15 $78.15 
Shares canceled in 2023 represent Stock Performance Awards granted during 2020 that were canceled based on the failure to meet the targets set forth by the agreements.
Stock Performance Awards are valued at the market value of the underlying common stock at the dates of grant and are expensed over the performance period. On a periodic basis, the Company reviews the actual and forecasted performance of the Company against the stated targets for each award. The total expense is adjusted upward or downward based on the expected number of shares to be issued as defined in the respective stock performance award agreement. If minimum targets as detailed under the award are not met, no additional compensation expense will be recognized and any previously recognized compensation expense will be reversed. During 2024, 2023 and 2022, the Company recognized (income) expense, net of performance adjustments, of $(6.4) million, $15.8 million and $9.6 million, respectively, relating to Stock Performance Awards. During 2024, the Company corrected prior period errors associated with a $18.1 million benefit related to the reversal of stock compensation expense for the Company's performance stock awards that should have been recorded during fiscal year 2023. See Note 1, Summary of Significant Accounting Policies for additional information. As of December 29, 2024, the amount of total unrecognized compensation cost related to these awards is approximately $18.3 million and the weighted average period over which this will be expensed is 21 months.
Restricted Stock Units
The Company, as part of its annual equity grant to executive officers and certain other employees, issues restricted stock or grants restricted stock units. These shares or units are nontransferable and subject to forfeiture or vesting for periods prescribed by the Company. These awards are valued at the market value of the underlying common stock at the date of grant and are subsequently amortized over the periods during which the restrictions lapse, generally three years. During 2024, 2023 and 2022, the Company recognized compensation expense, net of forfeitures, on these awards of $51.0 million, $47.8 million and $60.7 million, respectively. As of December 29, 2024, the amount of total unrecognized compensation cost related to restricted stock units is $88.7 million and the weighted average period over which this will be expensed is 24 months.
Information with respect to the remaining Restricted Stock Awards and Restricted Stock Units for is as follows:
(In millions, except per share data)202420232022
Outstanding at beginning of year1.6 1.2 1.1 
Granted1.8 1.2 0.7 
Forfeited(0.4)(0.2)(0.1)
Vested(0.6)(0.6)(0.5)
Outstanding at end of year2.4 1.6 1.2 
Weighted average grant-date fair value:
Granted$53.18 56.80 86.41 
Forfeited$59.90 74.22 91.18 
Vested$70.13 90.32 91.33 
Outstanding at end of year$56.04 66.08 88.85 
Stock Options
Information with respect to stock options is as follows:
(In millions, except per share data)202420232022
Outstanding at beginning of year2.3 1.8 2.9 
Granted— 1.4 0.6 
Exercised(0.1)— (0.8)
Expired or forfeited(0.7)(0.9)(0.9)
Outstanding at end of year1.5 2.3 1.8 
Exercisable at end of year1.0 0.9 0.8 
Weighted average exercise price:
Granted$— $55.92 $94.89 
Exercised$55.78 $— $85.60 
Expired or forfeited$77.13 $81.22 $97.16 
Outstanding at end of year$76.11 $75.24 $93.62 
Exercisable at end of year$83.94 $93.96 $92.95 
With respect to the 1.5 million outstanding options and 1.0 million options exercisable at December 29, 2024, the weighted average remaining contractual life of these options was 3.88 years and 3.26 years, respectively. The intrinsic value of the outstanding options and options exercisable at December 29, 2024 was $0.6 million and $0.2 million, respectively.
The Company uses the Black-Scholes valuation model in determining the fair value of stock options. The expected life of the options used in this calculation is the period of time the options are expected to be outstanding and has been determined based on historical exercise experience. The weighted average fair value of options granted in fiscal 2024, 2023, and 2022 was $11.74, $12.73, and $22.10, respectively. There was a de minimis amount of options granted in fiscal 2024. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the fiscal years 2024, 2023, and 2022:
202420232022
Risk-free interest rate4.46 %4.44 %1.79 %
Expected dividend yield4.63 %4.95 %2.95 %
Expected volatility33 %38 %37 %
Expected option life3 years3 years4 years
The intrinsic values, which represent the difference between the fair market value on the date of exercise and the exercise price of the option, for the options exercised in fiscal 2024 and 2022 were $1.1 million and $13.6 million, respectively. No options were exercised during fiscal 2023.
As of December 29, 2024, the amount of total unrecognized compensation cost related to stock options was $3.7 million and the weighted average period over which this will be expensed is 13 months.
Non-Employee Awards
In 2024, 2023 and 2022, the Company granted 30,700, 28,000 and 24,000 shares of common stock, respectively, to its non-employee members of its Board of Directors. Of these shares, the receipt of 8,800 shares from the 2024 grant, 14,000 shares from the 2023 grant and 12,000 shares from the 2022 grant has been deferred to the date upon which the respective director ceases to be a member of the Company’s Board of Directors. These awards were valued at the market value of the underlying common stock at the date of grant and vested upon grant. In connection with these grants, compensation cost of $1.8 million, $1.3 million and $2.1 million was recorded in Selling, distribution and administration expense during 2024, 2023 and 2022, respectively.