Wingstop Inc.WING
Wingstop Inc. Stock Compensation Disclosure
| (15) | Stock-Based Compensation | ||||
In May 2024, the Company’s stockholders approved the adoption of the 2024 Omnibus Award Plan (the “2024 Plan”). All equity grants subject to FASB ASC Topic 718 after the date of approval are made under the 2024 Plan. No further equity grants after that date are permitted under the 2015 Omnibus Award Plan (as amended, the “2015 Plan”). The 2024 Plan is currently the only equity plan from which future equity awards may be granted, but outstanding awards granted under the 2015 Plan will continue to be governed by the terms of the 2015 Plan and the underlying award agreement. The 2024 Plan provides for the grant or award of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance unit awards, performance share awards, cash-based awards and other stock-based awards to employees, directors, and other eligible persons. Stock options issued under the 2024 Plan expire ten years from the date of the grant. As of December 27, 2025, there were approximately 1.6 million shares available for future grants under the 2024 Plan.
In the event of a change in control of the Company (as defined in the 2024 Plan) in connection with which the board of directors or the Compensation Committee of the board of directors determines prior to such change in control that outstanding awards will be honored or assumed or new rights substituted therefore (as required by the Plan), each outstanding award will continue to vest in accordance with its terms. In the event the outstanding awards are not assumed or new rights substituted therefore in connection with the transaction, the awards will become fully vested and, to the extent applicable, exercisable immediately prior to the change in control and shall be exchanged for cash.
Stock-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite employee service period. The Company recognized approximately $24.9 million, $22.1 million, and $15.6 million in stock compensation expense, net of forfeitures, for fiscal years 2025, 2024, and 2023, respectively, with a corresponding increase to additional paid-in-capital. The Company recognized forfeitures of $2.2 million and $0.8 million for fiscal years 2025 and 2024, respectively. Stock compensation expense is included in Selling, general and administrative in the Consolidated Statements of Comprehensive Income. Assumptions made regarding forfeitures in determining the remaining unamortized share-based compensation are re-evaluated periodically.
Stock Options
The following table summarizes stock option activity:
| Number of Shares (in thousands) | Weighted Average Exercise Price | Aggregate Intrinsic Value (in thousands) | Weighted Average Remaining Term (in years) | ||||||||||||||||||||
| Stock options outstanding at December 28, 2024 | 20 | $ | 125.17 | $ | 3,266 | 6.6 | |||||||||||||||||
| Options granted | — | — | |||||||||||||||||||||
| Options exercised | (5) | 134.74 | |||||||||||||||||||||
| Options forfeited | — | — | |||||||||||||||||||||
| Stock options outstanding at December 27, 2025 | 15 | 122.44 | $ | 2,120 | 5.5 | ||||||||||||||||||
| Stock options exercisable at December 27, 2025 | 16 | $ | 122.44 | $ | 2,120 | 5.5 | |||||||||||||||||
The total intrinsic value of stock options exercised was $1.0 million, $2.0 million, and $0.4 million for fiscal years 2025, 2024, and 2023, respectively. As of December 27, 2025, there was no unrecognized stock compensation expense related to non-vested stock options.
Restricted Stock Units
Restricted stock units are granted to employees and generally vest in equal annual amounts over a three year period. The fair value of restricted stock units is based on the closing price on the date of grant.
The following table summarizes activity related to restricted stock units:
| Number of Shares (in thousands) | Weighted Average Grant Date Fair Value | ||||||||||
| Nonvested restricted stock units at December 28, 2024 | 75 | $ | 220.38 | ||||||||
| Units granted | 98 | 250.97 | |||||||||
| Units vested | (43) | 172.68 | |||||||||
| Units forfeited | (11) | 254.18 | |||||||||
| Nonvested restricted stock units at December 27, 2025 | 119 | $ | 259.66 | ||||||||
As of December 27, 2025, total unrecognized compensation expense related to unvested restricted stock units was $24.3 million, which is expected to be recognized over a weighted-average period of 2.4 years. The weighted-average grant date fair value of restricted stock units granted was $250.97, $362.70, and $174.57 in fiscal years 2025, 2024, and 2023, respectively. The total fair value of restricted stock units that vested in fiscal years 2025, 2024, and 2023 was $7.4 million, $4.0 million, and $2.1 million, respectively.
Performance Stock Units
Performance stock units (“PSUs”) represent a right to receive a certain number of shares of common stock based on the achievement of company performance goals and continued employment during the vesting period. Performance stock units cliff-vest at the end of a three year service period, cliff-vest at the end of a five year service period, or vest in equal annual amounts over a three year period. Vested amounts may range from 0% to a maximum of 250% of targeted amounts depending on the achievement of performance measures at the end of each vesting period. Such performance measures are based on the Company meeting net new restaurant targets, return on incremental investment targets, or sales targets for the vesting period. The fair value of PSUs is based on the closing price on the date of grant. The compensation expense related to these PSUs is recognized over the vesting period when the achievement of the performance conditions becomes probable. The total compensation cost for the PSUs is determined based on the most likely outcome of the performance condition and the number of awards expected to vest.
The following table summarizes activity related to performance stock units:
| Number of Shares (in thousands) | Weighted Average Grant Date Fair Value | |||||||||||||
| Nonvested performance stock units at December 28, 2024 | 91 | $ | 208.62 | |||||||||||
Units granted (a) | 145 | 159.13 | ||||||||||||
| Units vested | (90) | 135.96 | ||||||||||||
| Units forfeited | (4) | 270.72 | ||||||||||||
| Nonvested performance stock units at December 27, 2025 | 142 | $ | 250.38 | |||||||||||
(a) Includes 52,000 incremental PSUs earned with respect to the PSUs granted in fiscal year 2022 and vested in fiscal year 2025 at greater than 100% of target based on performance.
As of December 27, 2025, total unrecognized compensation expense related to unvested PSUs was $25.5 million, which is expected to be recognized over a weighted average period of 2.3 years. The weighted-average grant date fair value of performance stock units granted was $159.13, $306.61, and $145.15 in fiscal years 2025, 2024, and 2023, respectively. The total fair value of performance stock units that vested in fiscal years 2025, 2024, and 2023 was $12.2 million, $2.5 million, and $3.1 million, respectively.
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.