CAVA GROUP, INC.CAVA
CAVA GROUP, INC. Stock Compensation Disclosure
EQUITY-BASED COMPENSATION
2023 Equity Incentive Plan—The Amended and Restated 2023 Equity Incentive Plan (as amended, the “2023 Plan”) reserved 9.4 million authorized shares of the Company’s common stock for issuance to employees, directors, and consultants through stock options (both incentive and non-qualified), restricted shares of our common stock, RSUs, performance stock units, and other equity-based awards tied to the value of our shares. The number of shares reserved for issuance under the 2023 Plan will automatically increase on the first day of each fiscal year commencing on December 30, 2024 (first day of fiscal 2025) by a number of shares equal to the lesser of (i) 1% of the then-outstanding shares of our common stock on the last day of the immediately preceding fiscal year and (ii) a lesser number of shares as determined by our Board of Directors. As of December 28, 2025, 8.4 million shares were available for issuance under the 2023 Plan, which includes 1.2 million from an automatic increase on December 30, 2024 (the first day of fiscal 2025). The Board of Directors approved no increase to the plan reserve on December 29, 2025 (the first day of fiscal 2026).
2015 Equity Incentive Plan—Prior to the Company’s IPO, the Company granted incentive stock options, non-qualified stock options, and restricted stock unit awards to employees, directors, and consultants under the 2015 Equity Incentive Plan (the “2015 Plan”). Following effectiveness of the 2023 Equity Incentive Plan in connection with our IPO, no
further awards will be granted under the 2015 Plan; however, awards outstanding under the 2015 Plan will continue to be governed by their existing terms.
During fiscal 2025, 2024, and 2023 the Company recognized compensation expense (including applicable payroll taxes) related to awards under the equity incentive plans and the 2023 ESPP (as defined below) of $18.1 million, $17.1 million, and $9.6 million, respectively. Equity-based compensation expense is included in general and administrative expenses in the accompanying consolidated statements of operations.
Stock Options—Prior to the IPO, under the 2015 Plan, our Board of Directors determined the option exercise price and granted all stock options at exercise prices that were equal to or exceeded the fair value of the common stock on the date of grant. The terms of all stock options may not exceed 10 years. Vesting terms are determined by our Board of Directors and generally vest annually in equal installments over four years of continuous service, except for 0.6 million options that were granted to the Company’s CEO in connection with the IPO that vest over five years of continuous service.
A summary of the Company’s stock option activity is as follows:
| Weighted Average | |||||||||||||||||||||||
| (in thousands, except per share amounts) | Number Of Options | Exercise Price | Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||||||||
| Outstanding - December 29, 2024 | 2,264 | $ | 13.96 | 6.9 | $ | 227,328 | |||||||||||||||||
| Granted | 107 | 95.03 | |||||||||||||||||||||
| Exercised | (311) | 6.19 | |||||||||||||||||||||
| Forfeited or expired | (83) | 28.48 | |||||||||||||||||||||
| Outstanding - December 28, 2025 | 1,977 | $ | 18.96 | 6.4 | $ | 84,660 | |||||||||||||||||
| Exercisable - December 28, 2025 | 1,139 | $ | 12.70 | 5.6 | |||||||||||||||||||
| Vested and expected to vest - December 28, 2025 | 1,977 | $ | 18.96 | 6.4 | $ | 84,660 | |||||||||||||||||
As of December 28, 2025, there was $9.0 million of unrecognized compensation costs related to option awards. This cost is expected to be recognized over a weighted-average period of 2.5 years. The aggregate intrinsic value of options exercised during fiscal 2025, 2024, and 2023, was $25.1 million, $99.3 million, and $1.1 million, respectively.
The following table reflects the weighted-average assumptions utilized in the Black-Scholes option pricing model during the fiscal years indicated:
| 2025 | 2024 | 2023 | |||||||||||||||
Expected term (in years)1 | 6.2 | 6.3 | 6.4 | ||||||||||||||
Volatility2 | 49.2% | 46.7% | 46.0% | ||||||||||||||
| Risk-free interest rate | 4.1% | 4.1% | 3.8% | ||||||||||||||
| Dividend rate | —% | —% | —% | ||||||||||||||
| Weighted-average grant date fair value per share | $50.14 | $24.47 | $9.98 | ||||||||||||||
__________________
1 Expected term was calculated using the simplified method, which is an average of the contractual term and vesting period of the option, as we do not have sufficient historical data for determining the expected term of our stock option awards.
2 Volatility was based on a group of industry peers with sufficient history.
Restricted Stock Units—Vesting terms of RSUs are determined by our Board of Directors and generally vest annually in equal installments over four years of continuous service, except for 0.3 million RSUs that were granted to the Company’s CEO in connection with the IPO that vest over five years of continuous service.
A summary of the Company’s restricted stock unit activity is as follows:
| (in thousands, except per share amounts) | Number of Units | Weighted-Average Grant Date Fair Value | Aggregate Intrinsic Value | ||||||||||||||
| Non-vested - December 29, 2024 | 1,636 | $ | 14.79 | $ | 187,109 | ||||||||||||
| Granted | 154 | 91.50 | |||||||||||||||
| Vested | (667) | 12.74 | |||||||||||||||
| Forfeited | (152) | 23.36 | |||||||||||||||
| Non-vested - December 28, 2025 | 971 | $ | 27.01 | $ | 58,406 | ||||||||||||
As of December 28, 2025, there was $18.8 million of unrecognized compensation expense related to RSU awards. This cost is expected to be recognized over a weighted-average period of 2.4 years. The weighted-average grant date fair value of RSUs during fiscal 2024 and 2023 was $63.24 and $17.52, respectively. The aggregate fair value of shares vested during fiscal 2025, 2024, and 2023 was $68.0 million, $64.8 million, and $8.5 million, respectively.
2023 Employee Stock Purchase Plan—In connection with the IPO, the Company’s Board of Directors adopted the 2023 Employee Stock Purchase Plan (the “2023 ESPP”). The 2023 ESPP authorizes issuance of 1.8 million shares of common stock to the Company’s employees of which 1.6 million were available for issuance as of December 28, 2025. The number of shares available for issuance under the 2023 ESPP will automatically increase on the first day of each fiscal year commencing on January 1, 2024 (the first day of the fiscal year following the fiscal year in which the effective date of the 2023 ESPP falls in) by the lesser of (i) a number of shares such that the aggregate number of shares available for grant under the 2023 ESPP immediately following such increase will be equal to 1% of the outstanding common stock of the Company on the last day of the immediately preceding fiscal year and (ii) a lower number of shares of our common stock as determined by the Board of Directors.
The 2023 ESPP allows eligible employees to acquire shares of the Company’s common stock through payroll deductions over offering periods that are approximately six months. The per share purchase price is equal to 85% of the lesser of the fair market value of a share of the Company’s common stock on (i) the first trading day of the offering period or (ii) the last trading day of the offering period. During fiscal 2025, the Company issued less than 0.1 million shares under the 2023 ESPP.Free Sentinel
Track for freeWant the next CAVA GROUP, INC. stock compensation disclosure the moment it drops?
Set a Sentinel and we'll alert you the moment CAVA GROUP, INC.'s next filing hits EDGAR. No credit card, your email never gets sold.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.