Stock-Based Compensation

3 Months Ended

Mar. 30, 2024

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company recognizes compensation expense for all stock-based payments granted based on the grant-date fair value estimated in accordance with the provisions of ASC 718-10. Compensation expense is recognized on a straight-line basis over the awards’ estimated lives for fixed awards with ratable vesting provisions.

The Company granted 0.3 million restricted stock units (“RSU”) at a weighted average grant-date fair value of $114.59 per unit for the three months ended March 30, 2024. The Company granted 0.2 million RSUs at a weighted average of grant-date fair value of $103.02 per unit for the three months ended April 1, 2023. The Company recognized stock-based compensation expense related to the issuance of RSUs of $6.8 million ($5.0 million net of taxes) and $5.0 million ($3.7 million net of taxes) for the three months ended March 30, 2024 and April 1, 2023, respectively, which has been allocated to cost of sales and selling, general and administrative expenses. Pre-tax unrecognized compensation expense for unvested RSUs granted to employees, net of estimated forfeitures, was $38.7 million as of March 30, 2024, and will be recognized as expense over a weighted-average period of approximately 2.18 years.