Share-based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”)

The Company and certain of its subsidiaries issue time-vested RSUs and PSUs under their respective executive ownership plans and long-term incentive plans.

RSU and PSU activity under the Company’s various plans during the periods presented is as follows:


(in thousands, except per share amounts)	Non-vested shares outstanding at December 31, 2023		Granted	Vested	Forfeited	Non-vested shares outstanding at March 31, 2024
KKI
RSUs and PSUs	6,785		104	164	88	6,637
Weighted Average Grant Date Fair Value	$	14.54	13.52	14.75	15.11	$	14.51
KK U.K.
RSUs	7		—	—	—	7
Weighted Average Grant Date Fair Value	$	29.80	—	—	—	$	29.80
Insomnia Cookies
RSUs	47		—	2	—	45
Weighted Average Grant Date Fair Value	$	120.21	—	74.12	—	$	122.42
KK Australia
RSUs	185		—	—	—	185
Weighted Average Grant Date Fair Value	$	1.57	—	—	—	$	1.57
KK Mexico
RSUs	20		—	—	—	20
Weighted Average Grant Date Fair Value	$	30.18	—	—	—	$	30.18

The Company recorded total non-cash compensation expense related to RSUs and PSUs under the plans of $6.1 million and $4.7 million for the quarters ended March 31, 2024, and April 2, 2023, respectively, which is included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The unrecognized compensation cost related to the unvested RSUs and PSUs and the weighted average period over which such cost is expected to be recognized are as follows:


	As of March 31, 2024
	Unrecognized Compensation Cost		Recognized Over a Weighted Average Period of
KKI	$	53,665	2.9 years
KK U.K.	94		2.2 years
Insomnia Cookies	3,355		0.9 years
KK Australia	74		1.3 years
KK Mexico	231		1.4 years

The estimated fair value of restricted stock is calculated using a market approach (i.e., market multiple is used for the KK U.K. and Insomnia Cookies plans and an agreed-upon EBITDA buyout multiple is used for KK Australia and KK Mexico plans).

Time-Vested Stock Options

KKI issues time-vested stock options under its Omnibus Incentive Plan. The fair value of time-vested stock options was estimated on the date of grant using the Black-Scholes option pricing model.

A summary of the status of the time-vested stock options as of March 31, 2024 (with no options granted, exercised, or forfeited since December 31, 2023) is presented below:


	Share options outstanding at
(in thousands, except per share amounts)	March 31, 2024
KKI
Options	2,993
Weighted Average Grant Date Fair Value	$	5.90
Weighted Average Exercise Price	$	14.30

The Company recorded total non-cash compensation expense related to the time-vested stock options of $0.9 million and $0.9 million for the quarters ended March 31, 2024 and April 2, 2023, respectively, which is included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The unrecognized compensation cost related to the unvested stock options and the weighted average period over which such cost is expected to be recognized are as follows:


	As of March 31, 2024
	Unrecognized Compensation Cost		Recognized Over a Weighted Average Period of
KKI	$	7,311	2.1 years

No time-vested stock options under the KKI plan vested during the fiscal periods presented.