HAWKINS INCHWKN

HAWKINS INC Stock Compensation Disclosure

10-KFiled May 14, 20253 min read
Share-Based Compensation 
Performance-Based Restricted Stock Units.  Our Board of Directors has approved a performance-based equity compensation arrangement for our executive officers. This performance-based arrangement provides for the grant of performance-based restricted stock units that represent a possible future issuance of restricted shares of our common shares based on our pre-tax income target for the applicable fiscal year. The actual number of restricted shares to be issued to each executive officer will be determined when our final financial information becomes available after the applicable fiscal year and will be between zero shares and 76,137 shares in the aggregate for fiscal 2025. The restricted shares issued, if any, will fully vest two years after the end of the fiscal year on which the performance is based. We record the compensation expense for the outstanding performance share units and then-converted restricted stock over the life of the awards.
The following table represents the restricted stock activity for fiscal 2023, 2024, and 2025:
 SharesWeighted-
Average Grant
Date Fair Value
Outstanding at beginning of fiscal 2023
214,478 $25.48 
Granted88,524 38.31 
Vested(102,860)18.69 
Forfeited(10,884)34.68 
Outstanding at end of fiscal 2023
189,258 $34.64 
Granted61,819 43.06 
Vested(105,600)31.74 
Outstanding at end of fiscal 2024
145,477 $40.33 
Granted75,428 76.60 
Vested(83,658)38.31 
Outstanding at end of fiscal 2025
137,247 $61.49 
We recorded compensation expense on performance-based restricted stock of approximately $5.0 million for fiscal 2025, $3.7 million for fiscal 2024 and $2.8 million for fiscal 2023, substantially all of which was recorded in SG&A expense in the Consolidated Statements of Income. The total fair value of performance-based restricted stock units vested was $3.2 million in fiscal 2025, $3.4 million in fiscal 2024 and $1.9 million in fiscal 2023.
Until the performance-based restricted stock units result in the issuance of restricted stock, the amount of expense recorded each period is dependent upon our estimate of the number of shares that will ultimately be issued and our then-current common share price. Upon issuance of restricted stock, we record compensation expense over the remaining vesting period using the award date closing price. Unrecognized compensation expense related to non-vested restricted stock and non-vested restricted share units as of March 30, 2025 was $6.4 million and is expected to be recognized over a weighted average period of 1.3 years.
Restricted Stock Awards.  As part of their retainer, our directors, other than the Chief Executive Officer, receive restricted stock for their Board services. The restricted stock awards are expensed over a one-year vesting period, based on the market value on the date of grant.
The following table represents the Board’s restricted stock activity for fiscal 2023, 2024, and 2025:
 SharesWeighted-
Average Grant
Date Fair Value
Outstanding at beginning of fiscal 2023
10,287 $32.80 
Granted12,565 38.98 
Vested(10,287)32.80 
Outstanding at end of fiscal 2023
12,565 $38.98 
Granted10,647 46.00 
Vested(12,565)38.98 
Outstanding at end of fiscal 2024
10,647 $46.00 
Granted6,734 103.90 
Vested(10,647)46.00 
Outstanding at end of fiscal 2025
6,734 $103.90 
Annual expense related to the value of restricted stock was $0.6 million in fiscal 2025, $0.5 million in fiscal 2024, and $0.4 million in fiscal 2023, and was recorded in SG&A expense in the Consolidated Statements of Income. Unrecognized compensation expense related to non-vested restricted stock awards as of March 30, 2025 was $0.2 million and is expected to be recognized over a weighted average period of 0.3 years.

Historical Timeline

Fiscal YearFiled
2025May 14, 2025Showing above
2024May 15, 2024
2023May 17, 2023
2022May 18, 2022

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.

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