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Share-Based Plans
 3 Months Ended
May 04, 2024
Share-Based Payment Arrangement [Abstract]  
SHARE-BASED PLANS SHARE-BASED PLANS
We have issued RSUs, PSUs, SVCA PSUs, and TSR PSUs under our shareholder-approved equity compensation plans. We recognized share-based compensation expense of $2.7 million and $4.1 million in the first quarter of 2024 and the first quarter of 2023, respectively.

Non-vested Restricted Stock Units
The following table summarizes the non-vested RSU activity for the first quarter of 2024:
Number of SharesWeighted Average Grant-Date Fair Value Per Share
Outstanding non-vested RSUs at February 3, 20241,910,203 $12.54 
Granted987,147 3.90 
Vested(485,611)18.12 
Forfeited(126,110)11.83 
Outstanding non-vested RSUs at May 4, 20242,285,629 $7.33 

The non-vested RSUs granted in 2022, 2023, and the first quarter of 2024 generally vest, and are expensed, on a ratable basis over three years from the grant date of the award, if the grantee remains employed by us through the vesting dates. We estimated that the attainment of the financial performance objective associated with certain RSUs granted in 2022 will fall below the minimum required performance threshold. The RSUs granted in 2024 and 2023 have no required financial performance objectives. The RSUs granted in 2024 were only issued to certain executive members of management.

Performance Share Units
We awarded PSUs to certain members of management in 2021, which would vest if certain financial performance objectives were achieved over a three-year performance period and the grantee remained employed by us through that performance period. The performance period for the 2021 PSUs ended on February 3, 2024, and the applicable financial performance objectives were not achieved. As a result, the 2021 PSUs were forfeited on the first trading day after the filing of our 2023 Form 10-K and no share-based compensation expense was recognized.

As a result of the process used to establish the financial performance objectives, we established the grant date for 2022 PSUs in the first quarter of 2024, when we communicated the financial performance objectives for the third fiscal year of the award to the award recipients, which also established the service inception date, the fair value of the awards, and the associated expense recognition period for the 2022 PSUs. If we meet the applicable threshold financial performance objectives over the three-year performance period and the grantee remains employed by us through the end of the performance period, the PSUs will vest on the first trading day after we file our Annual Report on Form 10-K for fiscal 2024.

The number of shares distributed upon vesting of the 2022 PSUs depends on the average performance attained during the three-year performance period compared to the performance targets established by the Human Capital and Compensation Committee, and may result in the distribution of an amount of shares that is greater or less than the number of 2022 PSUs granted, as defined in the award agreement.

In 2023, we issued PSUs to certain members of management, which will vest if minimum financial performance objectives are achieved over a three-year performance period and the grantee remains employed by us during the remainder of the service period. The financial performance objectives will be established for each fiscal year within the three-year performance period and are generally approved by the Human Capital and Compensation Committee during the first quarter of the respective fiscal year.

As a result of the process used to establish the financial performance objectives, we met the requirements for establishing a grant date and subsequently the service inception date, fair value of the awards, and associated expense recognition period for the second tranche of 2023 PSUs after the Human Capital and Compensation Committee established the 2024 fiscal year financial performance objectives in the first quarter of 2024. If we meet the applicable threshold financial performance
objectives for any of the three tranches and the grantee remains employed by us through the end of the performance period, the PSUs will vest on the first trading day after we file our Annual Report on Form 10-K for the last fiscal year in the three-year performance period. The 2024 financial performance objectives established in the first quarter of 2024 applied to the 2022 PSU awards, 2023 PSU awards, and the 2024 performance cash awards mentioned in the “Cash Awards” section.

The number of shares distributed upon vesting of the 2023 PSUs depends on the average performance attained during the three-year performance period compared to the financial performance objectives established by the Human Capital and Compensation Committee, and may result in the distribution of an amount of shares that is equal to or less than the number of 2023 PSUs granted.

In 2022 and 2023, in addition to PSUs, we also awarded TSR PSUs to certain members of management, which vest based on the achievement of TSR targets relative to a peer group over a three-year performance period and require the grantee to remain employed by us through the end of the performance period. If we meet the applicable performance thresholds over the three-year performance period and the grantee remains employed by us through the end of the performance period, the TSR PSUs will vest on the first trading day after we file our Annual Report on Form 10-K for the last fiscal year in the performance period. We use a Monte Carlo simulation to estimate the fair value of the TSR PSUs on the grant date and recognize expense over the service period. The TSR PSUs have a contractual period of three years.

The number of shares distributed upon vesting of the TSR PSUs depends on the average performance attained during the three-year performance period compared to the performance targets established by the Human Capital and Compensation Committee, and may result in the distribution of an amount of shares that is greater or less than the number of TSR PSUs granted, as defined in the award agreement.

In 2023, we also awarded SVCA PSUs to certain members of management, which vest based on the achievement of multiple share price performance goals over a three-year contractual term and require the grantee to remain employed by us through the end of the contractual term. We use a Monte Carlo simulation to estimate the fair value of the SVCA PSUs on the grant date and recognize expense ratably over the service period. If we meet the applicable performance thresholds over the three-year performance period and the grantee remains employed by us through the end of the contractual term, the SVCA PSUs will vest at the end of the contractual term. If the share price performance goals applicable to the SVCA PSUs are not achieved prior to expiration, the unvested portion of the awards will be forfeited.

In the first quarter of 2024, we did not issue PSUs, SVCA PSUs, or TSR PSUs to any members of management. Instead, we granted performance-based cash awards and time-based cash awards to certain members of management. See the “Cash Awards” section of this note for additional details regarding these awards.

We have begun or expect to begin recognizing expense related to PSUs, TSR PSUs, and SVCA PSUs as follows:
Issue YearPSU CategoryOutstanding Units at May 4, 2024Actual Grant DateExpected Valuation (Grant) DateActual or Expected Expense Period
2022TSR PSU44,031 Fiscal 2022Fiscal 2022 - 2024
2022PSU176,162 March 2024Fiscal 2024
2023PSU (“FY23 Tranche”)141,485 August 2023Fiscal 2023 - 2025
2023PSU (“FY24 Tranche”)141,485 March 2024Fiscal 2024 - 2025
2023PSU (“FY25 Tranche”)141,485 March 2025Fiscal 2025
2023TSR PSU106,109 March 2023Fiscal 2023 - 2025
2023SVCA PSU433,985 March 2023Fiscal 2023 - 2025
Total1,184,742 

We recognized $0.2 million and $0.4 million of share-based compensation expense related to PSUs, TSR PSUs and SVCA PSUs in the first quarter of 2024 and the first quarter of 2023, respectively.

At May 4, 2024, we estimated that our financial performance will fall below the threshold performance objectives established for the 2022 PSUs and the FY24 Tranche of the 2023 PSUs. As of May 4, 2024, financial performance objectives have not been set for the FY25 Tranche of the 2023 PSUs. As a result, only the 2022 PSUs, the FY23 Tranche of the 2023 PSUs and the FY24 Tranche of the 2023 PSUs were deemed outstanding at May 4, 2024. In the first quarter 2024, we did not recognize share-based compensation expense related to the 2022 PSUs or the FY24 Tranche of the 2023 PSUs.
The following table summarizes the activity related to PSUs, TSR PSUs, and SVCA PSUs for the first quarter of 2024:
Number of UnitsWeighted Average Grant-Date Fair Value Per Share
Outstanding PSUs, TSR PSUs, and SVCA PSUs at February 3, 2024978,683 $7.34 
Granted332,049 3.90 
Vested— — 
Forfeited(267,475)6.70 
Outstanding PSUs, TSR PSUs, and SVCA PSUs at May 4, 20241,043,257 $6.41 

The following activity occurred under our share-based plans during the respective periods shown:
First Quarter
(In thousands)20242023
Total fair value of restricted stock vested$1,858 $3,410 

The total unearned compensation expense related to all share-based awards outstanding, excluding the FY25 Tranche of the 2023 PSUs, was approximately $12.0 million at May 4, 2024. We expect to recognize this compensation cost through February 2026 based on existing vesting terms with the weighted-average remaining expense recognition period being approximately 1.8 years from May 4, 2024.

Cash Awards
In the first quarter of 2024, in lieu of awarding RSUs, we issued time-based cash awards to certain members of management, which vest, and are expensed, on a ratable basis over the three-year period following the grant date of the award. These awards do not contain any required financial performance objectives. The grant date cash value of these awards was $6.3 million.

In the first quarter of 2024, in lieu of awarding PSUs, we awarded performance-based cash awards to certain members of management, which will vest if minimum financial performance objectives are achieved over a three-year performance period and the grantee remains employed by us during the performance period. The financial performance objectives will be established for each fiscal year within the three-year performance period and are generally approved by the Human Capital and Compensation Committee during the first quarter of the respective fiscal year. In the first quarter of 2024, the Human Capital and Compensation Committee established the financial performance objectives for the 2024 fiscal year which apply to the 2024 performance-based cash awards. Additionally, the performance-based cash awards contain a feature that allows the Company to settle the vested award through the issuance of cash, a variable number of shares, or a combination of both, as determined by the Human Capital and Compensation Committee in its sole discretion. Based on the shares available to be issued under the amended and restated 2020 Long-Term Incentive Plan (“2020 LTIP”), the Company does not expect to be able to settle these awards in shares. Therefore, these awards will be classified as liability awards unless it becomes probable that they can be settled in shares. The grant date cash value of these awards was $13.1 million.

We recognized compensation expense of $0.3 million during the first quarter of 2024 related to the cash awards described above. The time-based cash awards and performance-based cash awards have been recorded as a liability within accrued operating expenses in our condensed consolidated balance sheets.