Share-Based Compensation

9 Months Ended

Oct. 29, 2022

Share-Based Compensation

Share-Based Compensation

Note 12  Share-Based Compensation

The Company recognized share-based compensation expense of $5.0 million and $3.4 million during the thirteen weeks and $13.2 million and $8.8 million during the thirty-nine weeks ended October 29, 2022 and October 30, 2021, respectively.

The Company had net issuances (repurchases) of 20,699 and (10,554) shares of common stock during the thirteen weeks ended October 29, 2022 and October 30, 2021, respectively, for restricted stock grants, stock performance awards issued to employees and common and restricted stock grants issued to non-employee directors, net of forfeitures and shares withheld to satisfy the tax withholding requirement.  During the thirty-nine weeks ended October 29, 2022 and October 30, 2021, the Company had net issuances of 621,154 and 291,306 shares of common stock, respectively, related to share-based plans.

Restricted Stock

The following table summarizes restricted stock activity for the periods ended October 29, 2022 and October 30, 2021:

	Thirteen Weeks Ended				Thirteen Weeks Ended
	October 29, 2022				October 30, 2021
			Weighted-				Weighted-
	Total Number		Average		Total Number		Average
	of Restricted		Grant Date		of Restricted		Grant Date
	Shares		Fair Value		Shares		Fair Value
July 30, 2022	1,579,202	$	17.53	July 31, 2021	1,380,246	$	14.05
Granted	45,050		26.65	Granted	—		—
Forfeited	(15,500)		21.00	Forfeited	(9,500)		15.72
Vested	(58,000)		13.16	Vested	(3,500)		26.42
October 29, 2022	1,550,752	$	17.92	October 30, 2021	1,367,246	$	14.01

	Thirty-Nine Weeks Ended				Thirty-Nine Weeks Ended
	October 29, 2022				October 30, 2021
		Weighted-				Weighted-
	Total Number	Average			Total Number	Average
	of Restricted	Grant Date			of Restricted	Grant Date
	Shares		Fair Value		Shares	Fair Value
January 29, 2022	1,390,397	$	14.24	January 30, 2021	1,397,227	$	16.74
Granted	726,720		21.45	Granted	568,916		18.73
Forfeited	(95,716)		15.35	Forfeited	(78,375)		15.48
Vested	(470,649)		13.02	Vested	(520,522)		26.26
October 29, 2022	1,550,752	$	17.92	October 30, 2021	1,367,246	$	14.01

The Company granted 45,050 restricted shares during the thirteen weeks ended October 29, 2022, which have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years.  Of the 726,720 restricted shares granted during the thirty-nine weeks ended October 29, 2022, 716,250 restricted shares have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years, and 10,470 shares have a cliff-vesting term of one year.  There were no restricted shares granted during the thirteen weeks ended October 30, 2021.  Of the 568,916 restricted shares granted during the thirty-nine weeks October 30 2021, 544,006 shares have a graded-vesting term of three years, with 50% vesting after two years and 50% after three years, 20,000 shares have a cliff-vesting term of two years and 4,910 shares have a cliff-vesting term of one year.

Performance Awards

During the thirty-nine weeks ended October 29, 2022, the Company granted performance share awards for a targeted 87,750 shares, with a weighted-average grant date fair value of $20.99 in connection with the 2020 performance award.  During the thirty-nine weeks ended October 30, 2021, the Company granted performance share awards for a targeted 175,500 shares, with a weighted-average grant date fair value of $18.63.  There were no performance-based share awards granted by the Company during the thirteen weeks ended October 29, 2022 or October 30, 2021.  Vesting of performance-based awards is generally dependent upon the financial performance of the Company and the attainment of certain financial goals during the three-year period following the grant.  At the end of the vesting period, the employee will have earned an amount of shares or units between 0% and 200% of the targeted award, depending on the achievement of the specified financial goals for the service period.  Compensation expense is recognized based on the fair value of the award and the anticipated number of shares or units to be awarded for each tranche in accordance with the vesting schedule of the units over the three-year service period.  

In connection with the Company’s CFO transition during the thirteen weeks ended October 29, 2022, the Company approved the accelerated vesting of 30,000 performance-based share awards, representing two of the four award tranches from the 2020 performance award.  The

performance conditions had been satisfied for the two award tranches based on the achievement of financial goals for the 2020 and 2021 fiscal periods.  The modification to accelerate vesting eliminated the remaining service requirement.  These awards had a weighted-average grant date fair value of $13.05 per share, but were revalued using a fair value on the date of modification of $24.31 per share.  The modification of these awards resulted in incremental compensation expense of $0.4 million, which is presented in restructuring and other special charges on the condensed consolidated statements of earnings for the thirteen and thirty-nine weeks ended October 29, 2022.

During the thirty-nine weeks ended October 29, 2022, the Company granted long-term incentive awards payable in cash for the 2022-2024 performance period, with a target value of $8.3 million and a maximum value of $16.6 million.  During the thirty-nine weeks ended October 30, 2021, the Company granted long-term incentive awards payable in cash for the 2021-2023 performance period, with a target value of $6.5 million and a maximum value of $13.0 million.  These awards, which vest after a three-year period, are dependent upon the attainment of certain financial goals of the Company for each of the three years and individual achievement of strategic initiatives over the cumulative period of the award.  The estimated values of the awards, which are reflected within other liabilities on the condensed consolidated balance sheets, are being expensed ratably over the three-year performance period.  There were no performance-based awards payable in cash granted by the Company during the thirteen weeks ended October 29, 2022 or October 30, 2021.

Restricted Stock Units for Non-Employee Directors

Equity-based grants may be made to non-employee directors in the form of restricted stock units ("RSUs") payable in cash or common stock at no cost to the non-employee director.  The RSUs are subject to a vesting requirement (usually one year) and earn dividend equivalents at the same rate as dividends on the Company’s common stock.  The dividend equivalents, which vest immediately, are automatically re-invested in additional RSUs.  Expense related to the initial grant of RSUs is recognized ratably over the vesting period based upon the fair value of the RSUs.  The RSUs payable in cash are remeasured at the end of each period.  Expense for the dividend equivalents is recognized at fair value when the dividend equivalents are granted.  Gains and losses resulting from changes in the fair value of the RSUs payable in cash subsequent to the vesting period and through the settlement date are recognized in the Company’s condensed consolidated statements of earnings.  The Company granted 1,314 and 1,739 RSUs to non-employee directors for dividend equivalents, during the thirteen weeks ended October 29, 2022 and October 30, 2021, respectively, with weighted-average grant date fair values of $24.30 and $22.49, respectively.  The Company granted 41,325 and 44,180 RSUs to non-employee directors, including 4,680 and 4,900 for dividend equivalents, during the thirty-nine weeks ended October 29, 2022 and October 30, 2021, respectively, with weighted-average grant date fair values of $27.23 and $27.03, respectively.