During the sixteen weeks ended April 20, 2024, the Company granted 500 thousand time-based RSUs, 149 thousand market-based RSUs and 194 thousand stock options. The Company grants options to purchase common stock to certain employees under the Company’s 2023 Omnibus Incentive Compensation Plan. The general terms of the time-based and market-based RSUs and stock options are similar to awards previously granted by the Company. The Company records compensation expense for the grant date fair value of the option awards evenly over the vesting period.

The weighted-average fair values of the time-based and market-based RSUs granted during the sixteen weeks ended April 20, 2024 were $79.38 and $113.31 per share. The fair value of each market-based RSU was determined using a Monte Carlo simulation model. For time-based and performance-based RSUs, the fair value of each award was determined based on the market price of the Company’s stock on the date of grant adjusted for expected dividends during the vesting period, as applicable.

The weighted-average fair value of stock options granted during the sixteen weeks ended April 20, 2024 was $32.20 per share. The fair value was estimated on the date of grant by applying the Black-Scholes option-pricing valuation model.


	Sixteen Weeks Ended
	April 20, 2024
Risk-free interest rate (1)	4.1	%
Expected term (2)	6 years
Expected volatility (3)	42.6	%
Expected dividend yield (4)	1.5	%

(1) The risk-free interest rate is based on the yield in effect at grant for zero-coupon U.S. Treasury notes with maturities equivalent to the expected term of the stock options.

(2) The expected term represents the period of time options granted are expected to be outstanding. As sufficient historical data is not available, the Company utilized the simplified method provided by the SEC to calculate the expected term as the average of the contractual term and vesting period.

(3) Expected volatility is the measure of the amount by which the stock price has fluctuated or is expected to fluctuate. The Company utilized historical trends and the implied volatility of our publicly traded financial instruments in developing the volatility estimate for our stock options.

(4) The expected dividend yield is calculated based on the Company’s expected quarterly dividend and the three month average stock price as of the grant date.

The total income tax benefit related to share-based compensation expense for the sixteen weeks ended April 20, 2024 was $3.3 million. As of April 20, 2024, there was $113.7 million of unrecognized compensation expense related to all share-based awards that is expected to be recognized over a weighted-average period of 1.8 years.