What was the share-based compensation related to profit sharing interests that contain performance conditions for Carls in fiscal year 2024?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
-------------------|-------------|-------------| | Impairment of assets to be disposed of | $ 3,311 | $ 3,657 | | | | | | Closed store expenses | 2,219 | 219 | | Impairment of assets to be held and used | 1,044 | 444 | | (Gain) loss on disposal of other property and equipment | (3,503) | 512 | | Gain on refranchising transaction | (153) | — | | Other (gains) losses, net | (66) | 1,130 | | Gain on early termination of lease agreement associated with a financing method s
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the share-based compensation related to profit sharing interests that contain performance conditions for fiscal year 2024 was $1,168. This figure represents the expense recognized by Carls for equity-based awards granted to its executive management team, certain key employees, and directors. These awards are part of Carls's equity-based compensation plans. The company measures the fair value of these awards at the grant date and recognizes this fair value as an expense over the period the recipient provides service.
Carls's equity-based compensation structure includes both time vesting and performance vesting profit sharing interests. Compensation expense for time vesting profit sharing interests is recognized ratably over the service period. For performance vesting profit sharing interests, vesting occurs upon meeting specific performance and service conditions. Carls records compensation expense for these interests when the achievement of performance goals is deemed probable, recognizing the expense for each vesting portion over the requisite service period based on the most likely outcome.
It's important to note that Carls also records reversals of share-based compensation expense for forfeitures as they occur. This means that if an employee leaves the company or fails to meet the performance conditions, the previously recognized compensation expense is reversed. This share-based compensation is tied to CKE Holdings LP, where profit sharing interests are issued in the form of Class B and Class C Units, providing holders with a profit sharing interest as defined in the partnership agreement.