Stock Incentive Plans

12 Months Ended

Jan. 29, 2022

Share-based Payment Arrangement [Abstract]

On June 13, 2018, the Company’s board of directors adopted, and its shareholders approved, the BJ’s Wholesale Club Holdings, Inc. 2018 Incentive Award Plan (the "2018 Plan"). The 2018 Plan provides for the grant of stock options, restricted stock, dividend equivalents, stock payments, restricted stock units, performance shares, other incentive awards, stock appreciation rights, and cash awards. Prior to the adoption of the 2018 Plan, the Company granted stock-based compensation to employees and non-employee directors, respectively, under the Fourth Amended and Restated 2011 Stock Option Plan of BJ’s Wholesale Club Holdings, Inc. (f/k/a Beacon Holdings, Inc.), as amended (the "2011 Plan"), and the 2012 Director Stock Option Plan of BJ’s Wholesale Club Holdings, Inc. (f/k/a Beacon Holding Inc.), as amended (the "2012 Director Plan"). No further grants will be made under 2011 Plan or the 2012 Director Plan.

The 2018 Plan authorizes the issuance of 13,148,058 shares, including 985,369 shares that were reserved but not issued under the 2011 Plan and the 2012 Director Plan. If an award under the 2018 Plan, 2011 Plan or 2012 Director Plan is forfeited, expires or is settled for cash, any shares subject to such award may, to the extent of such forfeiture, expiration or cash settlement, be used again for new grants under the 2018 Plan. Additionally, shares tendered or withheld to satisfy grant or exercise price, or tax withholding obligations associated with an award under the 2018 Plan, the 2011 Plan or the 2012 Director Plan will be added to the shares authorized for grant under the 2018 Plan. The following shares may not be used again for grant under the 2018 Plan: (1) shares subject to a stock appreciation right ("SAR"), that are not issued in connection with the stock settlement of the SAR on its exercise and (2) shares purchased on the open market with the cash proceeds from the exercise of options under the 2018 Plan, 2011 Plan or 2012 Director Plan. As of January 29, 2022, there were 5,544,648 shares available for future issuance under the 2018 Plan.

On April 16, 2021, the Compensation Committee approved a modification to the equity awards agreements under the 2011 Plan, 2012 Director Plan and 2018 Plan. In the event that an employee is terminated due to death or disability, the modified equity award agreements provide for: (i) full vesting of all time-based awards, including restricted stock awards and stock options, (ii) pro-rata vesting of all performance-based awards, including performance share units, based on actual performance as of the end of the applicable performance period, pro-rated based on the period of employment during the applicable performance period, and (iii) the extension of the post-termination exercise window for vested stock options. The Company recognized $17.5 million of stock-based compensation expense due to the accelerated vesting of equity awards, related to the passing of a former executive.

The Company recognized $53.8 million ($38.8 million post-tax), $32.2 million ($23.2 million post-tax) and $18.8 million ($13.5 million post-tax) of total stock-based compensation for fiscal years 2021, 2020 and 2019, respectively. As of January 29, 2022, there was approximately $49.5 million of unrecognized compensation cost, which is expected to be recognized over the next three years.

Stock option awards are generally granted with vesting periods of three years. All options have a contractual term of ten years. No options were granted during fiscal year 2021. The fair value of the options granted in fiscal year 2020 and fiscal year

2019 was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions (no dividends were expected).


	Fiscal Year Ended January 30, 2021		Fiscal Year Ended February 1, 2020
Risk-free interest rate	0.44%		2.36%
Expected volatility	25.0	%	25.8		%
Weighted-average expected option life (in years)	5.75 - 6.0		6.0
Weighted-average grant-date fair value	$6.16 - $6.29		$	8.37

The risk-free interest rate was based on United States Treasury yields in effect at the time of the grant for notes with terms comparable to the awards. The expected option life represents an estimate of the period of time options are expected to remain outstanding based upon an average of the vesting and contractual terms of the options. Forfeitures are recorded as incurred.

Presented below is a summary of the stock option activity and weighted-average exercise prices for the fiscal year ended January 29, 2022:


(Options in thousands)	Number of Securities to be Issued Upon Exercise of Outstanding Options	Weighted- average Exercise Price		Weighted-average Remaining Contractual Life (in years)
Outstanding, beginning of period	3,673	$	17.50
Granted	—	—
Forfeited	—	—
Exercised	(1,391)	13.94
Outstanding, end of period	2,282	19.68		6.6
Vested and expected to vest, end of period	2,282	19.68		6.6
Exercisable, end of period	1,837	18.11		6.4

The total intrinsic value of options exercised in fiscal years 2021, 2020 and 2019 was $55.2 million, $45.0 million and $37.1 million, respectively. The Company received a tax benefit related to these option exercises of approximately $15.5 million, $12.6 million and $10.4 million in fiscal years 2021, 2020 and 2019, respectively. As of January 29, 2022, the total intrinsic value of options vested and expected to vest was $87.3 million.

Presented below is a summary of our non-vested restricted shares, restricted stock units and performance stock and weighted-average grant-date fair values for the fiscal year ended January 29, 2022:


	Restricted Stock			Restricted Stock Units			Performance Stock
(Shares in thousands)	Shares	Weighted-average Grant-Date Fair Value		Shares	Weighted-average Grant-Date Fair Value		Shares	Weighted-average Grant-Date Fair Value
Outstanding, beginning of period	1,575	$	26.29	29	$	34.54	527	$	23.96
Granted	509	45.03		26	46.82		429	45.18
Forfeited	(14)	39.76		—	—		(282)	28.98
Vested	(1,017)	29.59		(29)	34.60		—	—
Outstanding, end of period	1,053	$	34.36	26	$	46.82	674	$	39.76

As it relates to performance stock, the table above reflects a 100% payout, but the ultimate payout could be up to 200%.

The fair value as of the vesting date was $46.9 million for restricted stock and $1.3 million for restricted stock units.

2018 Employee Stock Purchase Plan

On June 14, 2018, the Company’s board of directors adopted and and its shareholders approved the BJ's Wholesale Club Holdings, Inc. 2018 Employee Stock Purchase Plan (the "ESPP"), which became effective the day prior to the first day of public trading of the Company's equity securities. The aggregate number of shares of common stock that was be reserved for issuance under our ESPP was be equal to the sum of (i) 973,014 shares and (ii) an annual increase on the first day of each calendar year beginning in 2019 and ending in 2028 equal to the lesser of (A) 486,507 shares, (B) 0.5% of the shares outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (C) such smaller number of shares as determined by the board of directors. The offering under the ESPP commenced on January 1, 2019. The amount of expense recognized in the fiscal years ended January 29, 2022, January 30, 2021 and February 1, 2020 was $0.8 million, $0.6 million and $0.4 million, respectively.