Stock-Based Compensation

6 Months Ended

Jun. 30, 2026

Stock-Based Compensation

Stock-Based Compensation

9. Stock-Based Compensation

We maintain stock-based incentive plans under which incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares and restricted share units may be granted to staff members, consultants and non-employee directors.

On March 26, 2025, our Board approved an amendment to our The Cheesecake Factory Incorporated Stock Incentive Plan (the “Plan”) to increase the number of shares of common stock authorized for issuance under the Plan by 6.0 million shares to 13.15 million shares from 7.15 million shares (the “Plan Amendment”). This Plan Amendment was approved by our stockholders at our 2025 annual meeting held on May 22, 2025.

The following table presents information related to stock-based compensation, net of forfeitures (in thousands):


		Thirteen			Thirteen			Twenty-Six			Twenty-Six
		Weeks Ended			Weeks Ended			Weeks Ended			Weeks Ended
		June 30, 2026			July 1, 2025			June 30, 2026			July 1, 2025

Labor expenses		$	2,852		$	2,542		$	5,625		$	4,979
Other operating costs and expenses			100			101			198			200
General and administrative expenses			5,809			4,546			9,952			9,591
Total stock-based compensation			8,761			7,189			15,775			14,770
Income tax benefit			2,158			1,759			3,888			3,629
Total stock-based compensation, net of taxes		$	6,603		$	5,430		$	11,887		$	11,141

Capitalized stock-based compensation ⁽¹⁾		$	54		$	59		$	107		$	113

(1)

It is our policy to capitalize the portion of stock-based compensation costs for our internal development department that relates to capitalizable activities such as the design and construction of new restaurants, remodeling existing locations and equipment installation. Capitalized stock-based compensation is included in property and equipment, net on the consolidated balance sheets.

Stock Options

We did not issue any stock options during the second quarter of fiscal 2026 and fiscal 2025. Stock option activity during the twenty-six weeks ended June 30, 2026 was as follows:


							Weighted-
							Average
				Weighted-			Remaining
				Average			Contractual		Aggregate
		Shares		Exercise Price			Term		Intrinsic Value ⁽¹⁾
		(In thousands)		(Per share)			(In years)		(In thousands)
Outstanding at December 30, 2025		471		$	41.08		4.1		$	4,203.7
Granted		—			—
Exercised		(161)			45.19
Forfeited or cancelled		—			—
Outstanding at June 30, 2026		310		$	38.93		5.0		$	12,562.9

Exercisable at June 30, 2026		245		$	39.64		4.4		$	9,762.7

(1)

Aggregate intrinsic value is calculated as the difference between our closing stock price at fiscal period end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised their options on the fiscal period-end date.

The total intrinsic value of options exercised during the thirteen and twenty-six weeks ended June 30, 2026 was $2.7 million and $2.8 million, respectively. The total intrinsic value of options exercised during the thirteen and twenty-six weeks ended July 1, 2025 was $2.8 million and $4.3 million, respectively. As June 30, 2026, total unrecognized stock-based compensation expense related to unvested stock options was $0.7 million, which we expect to recognize over a weighted-average period of approximately 2.4 years.

Restricted Shares and Restricted Share Units

Restricted share and restricted share unit activity during the twenty-six weeks ended June 30, 2026 was as follows:


				Weighted-
				Average
		Shares		Fair Value
		(In thousands)		(Per share)
Outstanding at December 30, 2025		3,176		$	41.31
Granted		527			60.40
Vested		(566)			42.82
Forfeited		(58)			40.60
Outstanding at June 30, 2026		3,079		$	44.31

Fair value of our restricted shares and restricted share units is based on our closing stock price on the date of grant. The weighted average fair value for restricted shares and restricted share units issued during the second quarter of fiscal 2026 and 2025 was $64.26 and $52.35, respectively. The fair value of shares that vested during the thirteen and twenty-six weeks ended June 30, 2026 was $3.6 million and $24.2 million, respectively. The fair value of shares that vested during the thirteen and twenty-six weeks ended July 1, 2025 was $2.0 million and $24.4 million, respectively. As of June 30, 2026, total unrecognized stock-based compensation expense related to unvested restricted shares and restricted share units was $77.2 million, which we expect to recognize over a weighted-average period of approximately 2.8 years.