Share-Based Compensation

6 Months Ended

Jul. 29, 2023

Share-Based Compensation

Share-Based Compensation

Note 12  Share-Based Compensation

The Company recognized share-based compensation expense of $4.0 million and $4.4 million during the thirteen weeks and $6.9 million and $8.2 million during the twenty-six weeks ended July 29, 2023 and July 30, 2022, respectively.

The Company had net issuances of 28,494 and 87,947 shares of common stock during the thirteen weeks ended July 29, 2023 and July 30, 2022, 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 twenty-six weeks ended July 29, 2023 and July 30, 2022, the Company had net issuances of 587,341 and 600,455 shares of common stock, respectively, related to share-based plans.

Restricted Stock

The following table summarizes restricted stock activity for the periods ended July 29, 2023 and July 30, 2022:

	Thirteen Weeks Ended				Thirteen Weeks Ended
	July 29, 2023				July 30, 2022
			Weighted-				Weighted-
	Total Number		Average		Total Number		Average
	of Restricted		Grant Date		of Restricted		Grant Date
	Shares		Fair Value		Shares		Fair Value
April 29, 2023	1,607,595	$	21.64	April 30, 2022	1,622,777	$	17.51
Granted	33,610		19.34	Granted	10,470		27.70
Forfeited	(21,928)		21.79	Forfeited	(29,250)		17.10
Vested	(11,220)		27.69	Vested	(24,795)		21.00
July 29, 2023	1,608,057	$	21.55	July 30, 2022	1,579,202	$	17.53

	Twenty-Six Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023				July 30, 2022
		Weighted-				Weighted-
	Total Number	Average			Total Number	Average
	of Restricted	Grant Date			of Restricted	Grant Date
	Shares		Fair Value		Shares	Fair Value
January 28, 2023	1,603,960	$	18.57	January 29, 2022	1,390,397	$	14.24
Granted	579,994		22.87	Granted	681,670		21.10
Forfeited	(144,173)		18.55	Forfeited	(80,216)		14.26
Vested	(431,724)		13.27	Vested	(412,649)		12.99
July 29, 2023	1,608,057	$	21.55	July 30, 2022	1,579,202	$	17.53

Of the 33,610 restricted shares the Company granted during the thirteen weeks ended July 29, 2023, 23,268 have a cliff-vesting term of one year and 10,342 shares have a graded vesting term of three years, with 50% vesting after two years and 50% after three years.  Of the 579,994 restricted shares granted during the twenty-six weeks ended July 29, 2023, 543,926 shares have a graded vesting term of three years, with 50% vesting after two years and 50% after three years, 23,268 shares have a cliff-vesting term of one year, 7,000 shares have a graded vesting term of three years, with 50% vesting after eighteen months and 50% after three years, and 5,800 shares have a cliff-vesting term of two years.  The Company granted 10,470 restricted shares during the thirteen weeks ended July 30, 2022, which have a cliff-vesting term of one year.  Of the 681,670 restricted shares the Company granted during the twenty-six weeks ended July 30, 2022, 671,200 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.  

Performance Awards

During the twenty-six weeks ended July 29, 2023, the Company granted performance share awards for a targeted 276,434 shares, with a weighted-average grant date fair value of $23.12 in connection with the 2023 performance award (2023 – 2025 performance period).  During the twenty-six weeks ended July 30, 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 (2020 – 2022 performance period).  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 attainment of certain financial goals for the service period and individual achievement of strategic initiatives over the cumulative period of the award.  The 2023 performance award is payable in common stock for up to 100% of the targeted award and the remainder in cash if any portion exceeds the targeted award.  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.  

During the twenty-six weeks ended July 30, 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.  This award, which vests after a three-year period, is 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 value of the award, which is reflected within other liabilities on the condensed consolidated balance sheets, is being expensed ratably over the three-year performance period.

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 reinvested 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 47,873 and 38,104 RSUs to non-employee directors, including 1,337 and 1,459 for dividend equivalents, during the thirteen weeks ended July 29, 2023 and July 30, 2022, respectively, with weighted-average grant date fair values of $19.46 and $27.66, respectively.  The Company granted 49,295 and 40,011 RSUs to non-employee directors, including 2,759 and 3,366 and for dividend equivalents, during the twenty-six weeks ended July 29, 2023 and July 30, 2022, respectively, with weighted-average grant date fair values of $19.52 and $27.33, respectively.