Stock-based Compensation

9 Months Ended

Oct. 29, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

STOCK-BASED COMPENSATION

The DSW Inc. 2014 Long-Term Incentive Plan ("the 2014 Plan") provides for the issuance of equity awards to purchase up to 8.5 million DSW Inc. Common Shares. The Company began issuing shares under the 2014 Plan after the DSW Inc. 2005 Equity Incentive Plan expired in the second quarter of fiscal 2015. The 2014 Plan covers stock options, RSUs, PSUs, director stock units ("DSUs") and stock appreciation rights ("SARs"). Eligible recipients include key employees of DSW Inc. and affiliates, as well as directors. Options generally vest 20% per year on a cumulative basis. Options granted under the 2014 Plan generally remain exercisable for a period of ten years from the date of grant.

Stock-Based Compensation Expense- The following table summarizes stock-based compensation expense for the periods presented:

	Three months ended				Nine months ended
	October 29, 2016		October 31, 2015		October 29, 2016		October 31, 2015
	(in thousands)
Stock options	$	1,313	$	1,539	$	4,538	$	5,165
Restricted stock units	782		586		2,651		1,986
Performance-based restricted stock units	547		915		1,779		2,617
Director stock units	198		44		1,188		969
Total	$	2,840	$	3,084	$	10,156	$	10,737

Stock Options, RSUs, PSUs and DSUs- The following table summarizes all stock-based compensation activity:

	Nine months ended
	October 29, 2016
	Stock Options		RSUs		PSUs		DSUs
	(in thousands)
Outstanding, beginning of period	3,849		372		293		305
Granted	835		187		114		64
Exercised/Vested	(266	)	(106	)	(133	)	(60	)
Forfeited	(443	)	(81	)	(27	)	—
Outstanding, end of period	3,975		372		247		309
Exercisable, end of period	2,071		—		—		—

The following table summarizes the total compensation cost related to nonvested shares not yet recognized and the weighted average expense recognition period remaining (amounts in thousands):

	Nine months ended
	October 29, 2016
	Stock Options		RSUs		PSUs
Unrecognized compensation cost	$	13,118	$	6,601	$	4,453
Weighted average expense recognition period	2.1 years		1.8 years		1.9 years

The following table illustrates the weighted average assumptions used in the Black-Scholes pricing model for options granted in each of the periods presented:    

	Nine months ended
Assumptions:	October 29, 2016	October 31, 2015
Risk-free interest rate	1.5%	1.4%
Expected volatility of DSW Inc. Common Shares	36.0%	37.9%
Expected option term	5.4 years	5.1 years
Dividend yield	3.0%	2.1%
Other Data:
Weighted average grant date fair value	$6.59	$10.09