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Stock-Based Compensation
3 Months Ended
Apr. 02, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
Stock-Based Compensation
Performance Shares
2017 Grant
On February 15, 2017, the Company granted performance awards associated with the Company’s Class A stock to certain senior officers. The payment of performance shares, which will be satisfied with the issuance of shares out of treasury stock, is contingent upon the achievement of specific performance goals over a stated period of time. For the 2017 performance share grant, the total target number of performance shares granted is 248,400, and the maximum number of performance shares that may be earned is 496,800, which assumes 200% of the target shares originally granted. Target shares of 165,600 may be earned upon the achievement of two financial goals (“financial measure performance shares”) and target shares of 82,800 may be earned based on the Company’s total shareholder return relative to the S&P SmallCap 600 Index (“TSR performance shares”). No dividends are paid on these performance shares.
The financial measure performance shares, which have a weighted average grant date fair value of $21.07, have a three-year performance period through December 31, 2019. These shares will cliff-vest after approval by the Compensation Committee, which will be no later than March 15, 2020, if not forfeited by the recipient. For each of the two financial measures, there are annual goals set in February of each year, with the total award payout based on a cumulative average of the 2017, 2018 and 2019 goals. Accordingly, consistent with 2016 awards, the Company remeasures the fair value of the 2017 financial measure performance shares each reporting period until the 2019 goals are set, after which the fair value will be fixed for the remaining performance period. As of first quarter-end 2017, the current fair value for all financial measure performance shares was $20.98.
The TSR performance shares also have a three-year performance period through December, 31, 2019 and have an estimated fair value of $20.16, which was computed using a Monte Carlo simulation model incorporating assumptions for inputs of expected stock price volatility, dividend yield and risk-free interest rate. These shares will cliff-vest after approval by the Compensation Committee, which will be no later than March 15, 2020, if not forfeited by the recipient.
For the first quarter 2017 and 2016, respectively, total compensation expense related to all performance shares was $2.9 million and $1.3 million, and the related tax benefit was $1.1 million and $0.5 million.