Share-Based Compensation

6 Months Ended

Aug. 03, 2024

Share-Based Compensation

Share-Based Compensation

Note 12  Share-Based Compensation

The Company recognized share-based compensation expense of $4.2 million and $4.0 million during the thirteen weeks and $7.9 million and $6.9 million during the twenty-six weeks ended August 3, 2024 and July 29, 2023, respectively.

The Company had net issuances of 463 and 28,494 shares of common stock during the thirteen weeks ended August 3, 2024 and July 29, 2023, 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 August 3, 2024 and July 29, 2023, the Company had net issuances of 61,851 and 587,341 shares of common stock, respectively, related to share-based plans.

Restricted Stock

The following table summarizes restricted stock activity for the periods ended August 3, 2024 and July 29, 2023:

	Thirteen Weeks Ended				Thirteen Weeks Ended
	August 3, 2024				July 29, 2023
			Weighted-				Weighted-
	Total Number		Average		Total Number		Average
	of Restricted		Grant Date		of Restricted		Grant Date
	Shares		Fair Value		Shares		Fair Value
May 4, 2024	1,296,085	$	27.12	April 29, 2023	1,607,595	$	21.64
Granted	16,812		35.06	Granted	33,610		19.34
Forfeited	(10,007)		28.82	Forfeited	(21,928)		21.79
Vested	(62,615)		23.67	Vested	(11,220)		27.69
August 3, 2024	1,240,275	$	27.48	July 29, 2023	1,608,057	$	21.55

	Twenty-Six Weeks Ended				Twenty-Six Weeks Ended
	August 3, 2024				July 29, 2023
		Weighted-				Weighted-
	Total Number	Average			Total Number	Average
	of Restricted	Grant Date			of Restricted	Grant Date
	Shares		Fair Value		Shares	Fair Value
February 3, 2024	1,512,421	$	21.96	January 28, 2023	1,603,960	$	18.57
Granted	320,097		40.74	Granted	579,994		22.87
Forfeited	(49,359)		24.30	Forfeited	(144,173)		18.55
Vested	(542,884)		20.42	Vested	(431,724)		13.27
August 3, 2024	1,240,275	$	27.48	July 29, 2023	1,608,057	$	21.55

Of the 16,812 restricted shares the Company granted during the thirteen weeks ended August 3, 2024, 13,692 shares have a cliff-vesting term of one year and 3,120 shares have a graded vesting term of three years, with 50% vesting after two years and 50% after three years.  Of the 320,097 restricted shares the Company granted during the twenty-six weeks ended August 3, 2024, 13,692 have a cliff-vesting term of one year and 306,405 shares have a graded vesting term of three years, with 50% vesting after two years and 50% after three years. 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.    

Performance Awards

During the twenty-six weeks ended August 3, 2024, the Company granted performance share awards for a targeted 165,854 shares, with a weighted-average grant date fair value of $41.05 in connection with the 2024 performance award (2024 – 2026 performance period).  During the twenty-six weeks ended April 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).  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 performance awards are 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.

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 28,444 and 47,873 RSUs to non-employee directors, including 1,060 and 1,337 RSUs for dividend equivalents, during the thirteen weeks ended August 3, 2024 and July 29, 2023, respectively, with weighted-average grant date fair values of $35.01 and $19.46, respectively.  The Company granted 29,323 and 49,295 RSUs to non-employee directors, including 1,939 and 2,759 and for dividend equivalents, during the twenty-six weeks ended August 3, 2024 and July 29, 2023, respectively, with weighted-average grant date fair values of $35.03 and $19.52, respectively.