What was the total stock-based compensation cost for Benihana in 2021 and 2022, and where is it included in the consolidated statements?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
pany's stockholders approved amendments to the 2013 Equity Plan (the "2019 Equity Plan"). Among other things, the amendments increased the number of shares of common stock authorized for issuance under the 2019 Equity Plan by 2,300,000 shares to a new maximum aggregate limit of 7,073,922 shares. As of December 31, 2021, the Company had 160,624 shares available for issuance under the 2019 Equity Plan.
Stock-based compensation cost for the years ended December 31, 2021 and 2020 was $3.6 million and $1.8 million, respectively, and is included in general and administrative expenses in the consolidated statements of operations and comprehensive income. Included in stock-based compensation cost was $0.5 million and $0.3 million of unrestricted stock granted to directors for the years ended December 31, 2021 and 2020, respectively. Such grants were awarded consistent with the Board's compensation practices and included grants to two new board members appointed in September 2021. In addition, stock-based compensation 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) | |
|---|---|---|---|---|
| Outstanding at January 1, 2020 | 1,806,508 | $ 3.37 | ||
| Vested | — | — | ||
| Exercised | (18,000) | 2.13 | ||
| Cancelled, expired or forfeited | (81,500) | 3.75 | ||
| Outstanding at December | 1,707,008 | $ 3.37 | 4.98 years | $ 1,454 |
| 31, | ||||
| 2020 | ||||
| Exercisable at December | 1,443,675 | $ 3.57 | 4.68 years | $ 1,112 |
| 31, | ||||
| 2020 | ||||
| Vested | 594,402 | 3.09 | ||
| Exercised | (1,039,058) | 3.23 | ||
| Cancelled, expired or forfeited | (10,000) | 2.13 | ||
| Outstanding at December | 1,252,352 | $ 3.36 | 3.92 years | $ 11,581 |
| 31, | ||||
| 2021 | ||||
| Exercisable at December | 1,126,685 | $ 3.48 | 3.72 years | $ 10,283 |
| 31, | ||||
| 2021 |
There were no stock options granted in the years ended December 31, 2021 and 2020
A summary of the status of the Company's non-vested stock options as of December 31, 2021 and 2020 and changes during the years then ended, is pre
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the stock-based compensation cost for the years ending December 31, 2021, and 2020 was $3.6 million and $1.8 million, respectively. This cost is included in general and administrative expenses within the consolidated statements of operations and comprehensive income. For 2021, this included $0.5 million of unrestricted stock granted to directors and $0.3 million for 2020. These grants aligned with the Board's compensation practices and included grants to two new board members appointed in September 2021. Additionally, the stock-based compensation expense for 2021 included $0.4 million of employer payroll taxes related to stock option and restricted stock units (RSU) activity, and $0.3 million for the vesting of market condition-based stock options and RSUs.
Further details from the FDD show that general and administrative expenses, which include stock-based compensation, accounted for 9.2% of total costs and expenses in both 2022 and 2021. The specific percentage of general and administrative expenses attributed to stock-based compensation was 1.3% for both years. This indicates that while the overall general and administrative costs remained consistent, the stock-based compensation component also held steady as a proportion of these costs.
For a prospective Benihana franchisee, understanding these figures provides insight into the company's overall financial structure and how it compensates its executives and board members. Stock-based compensation is a common practice in many corporations, and its inclusion in the general and administrative expenses is typical. Franchisees should be aware of these costs as they contribute to the overall operating expenses of the company, which can impact the financial health and stability of the Benihana brand.