What was the intrinsic value (in thousands) of Benihana stock options outstanding at December 31, 2022?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
n expense for the year ended December 31, 2021 included $0.4 million of employer payroll taxes associated with stock option and restricted stock units ("RSU") activity and $0.3 million of compensation costs for the vesting of market condition-based stock options and RSUs.
Stock Option Activity
Changes in outstanding stock options during the years ended December 31, 2021 and 2020 were as follows:
| Shares | Weighted average exercise price | Weighted average remaining contractual life | Intrinsic value (thousands) |
|---|
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the intrinsic value of outstanding stock options at December 31, 2022, was $3,811,000. This is based on 1,187,352 shares outstanding with a weighted average exercise price of $3.43 and a remaining contractual life of 2.84 years.
This figure represents the difference between the market value of Benihana's stock and the exercise price of the options, multiplied by the number of options outstanding. It indicates the potential profit that holders of these stock options could realize if they exercised their options at that time.
For a prospective franchisee, this information provides insight into the company's financial structure and how it incentivizes its employees and executives through stock options. While it may not directly impact the day-to-day operations of a franchise, it offers a glimpse into the overall financial health and management practices of Benihana.