SHARE-BASED COMPENSATION

12 Months Ended

Jan. 28, 2023

Share-Based Payment Arrangement [Abstract]

Plans

As of January 28, 2023, the Company had two primary share-based compensation plans: (i) the 2016 Directors LTIP, with 900,000 shares of Common Stock authorized for issuance, under which the Company is authorized to grant restricted stock, restricted stock units, stock appreciation rights, stock options and deferred stock awards to non-associate members of the Board of Directors; and (ii) the 2016 Associates LTIP, with 10,665,000 shares of Common Stock authorized for issuance, under which the Company is authorized to grant restricted stock, restricted stock units, performance share awards, stock appreciation rights and stock options to associates of the Company. The Company also has outstanding shares from two other share-based compensation plans under which the Company granted restricted stock units, performance share awards, stock appreciation rights and stock options to associates of the Company and restricted stock units, stock options and deferred stock awards to non-associate members of the Board of Directors in prior years. No new shares may be granted under these previously-authorized plans and any outstanding awards continue in effect in accordance with their respective terms.

The 2016 Directors LTIP, a stockholder-approved plan, permits the Company to annually grant awards to non-associate directors, subject to the following limits:

•For non-associate directors: awards with an aggregate fair market value on the date of the grant of no more than $300,000;

•For the non-associate director occupying the role of Non-Executive Chairperson of the Board (if any): additional awards with an aggregate fair market value on the date of grant of no more than $500,000; and

•For the non-associate director occupying the role of Executive Chairperson of the Board (if any): additional awards with an aggregate fair market value on the date of grant of no more than $2,500,000.

Under the 2016 Directors LTIP, restricted stock units are subject to a minimum vesting period ending no sooner than the earlier of (i) the first anniversary of the grant date or (ii) the date of the next regularly scheduled annual meeting of stockholders held after the grant date. Any stock appreciation rights or stock options granted under this plan have the same minimum vesting period requirements as restricted stock units and, in addition, must have a term that does not exceed a period of ten years from the grant date, subject to forfeiture under the terms of the 2016 Directors LTIP.

The 2016 Associates LTIP, a stockholder-approved plan, permits the Company to annually grant one or more types of awards covering up to an aggregate for all awards of 1.0 million underlying shares of the Common Stock to any associate of the Company. Under the 2016 Associates LTIP, for restricted stock units that have performance-based vesting, performance must be measured over a period of at least one year and for restricted stock units that do not have performance-based vesting, vesting in full may not occur more quickly than in pro-rata installments over a period of three years from the date of the grant, with the first installment vesting no sooner than the first anniversary of the date of the grant. In addition, any stock options or stock appreciation rights granted under this plan must have a minimum vesting period of one year and a term that does not exceed a period of ten years from the grant date, subject to forfeiture under the terms of the 2016 Associates LTIP.

Each of the 2016 Directors LTIP and the 2016 Associates LTIP provides for accelerated vesting of awards if there is a change of control and certain other conditions specified in each plan are met.

Financial Statement Impact

The following table details share-based compensation expense and the related income tax benefit for Fiscal 2022, Fiscal 2021 and Fiscal 2020:


(in thousands)	Fiscal 2022		Fiscal 2021		Fiscal 2020
Share-based compensation expense	$	28,995	$	29,304	$	18,682
Income tax benefit associated with share-based compensation expense recognized during the period (1)	3,515		3,338		—

(1) No income tax benefit was recognized during Fiscal 2020 due to the establishment of a valuation allowance.

The following table details discrete income tax benefits and charges related to share-based compensation awards during Fiscal 2022, Fiscal 2021 and Fiscal 2020:


(in thousands)	Fiscal 2022		Fiscal 2021		Fiscal 2020
Income tax discrete benefits (charges) realized for tax deductions related to the issuance of shares during the period	$	1,956	$	4,198	$	(1,719)
Income tax discrete charges realized upon cancellation of stock appreciation rights during the period	(226)		(204)		(1,943)
Total income tax discrete benefits (charges) related to share-based compensation awards	$	1,730	$	3,994	$	(3,662)

The following table details the amount of employee tax withheld by the Company upon the issuance of shares associated with restricted stock units vesting and the exercise of stock appreciation rights for the Fiscal 2022, Fiscal 2021 and Fiscal 2020:


(in thousands)	Fiscal 2022		Fiscal 2021		Fiscal 2020
Employee tax withheld upon issuance of shares (1)	$	14,464	$	13,163	$	5,694

(1) Classified within other financing activities on the Consolidated Statements of Cash Flows.

Restricted Stock Units

The following table summarizes activity for restricted stock units for Fiscal 2022:


	Service-based Restricted Stock Units			Performance-based Restricted Stock Units			Market-based Restricted Stock Units
	Number of Underlying Shares	Weighted- Average Grant Date Fair Value		Number of Underlying Shares (1)	Weighted- Average Grant Date Fair Value		Number of Underlying Shares (1)	Weighted- Average Grant Date Fair Value
Unvested at January 29, 2022	2,532,240	$	17.16	340,149	$	27.08	680,184	$	22.81
Granted	1,012,916	28.51		185,197	30.24		92,603	41.60
Change due to performance criteria achievement	—	—		5,668	23.05		18,881	36.24
Vested	(930,944)	18.04		(194,465)	23.05		(113,284)	36.24
Forfeited	(152,817)	20.42		—	—		(16,247)	16.24
Unvested at January 28, 2023 (1)	2,461,395	$	21.30	336,549	$	31.08	662,137	$	23.68

(1) Unvested shares related to restricted stock units with performance-based and market-based vesting conditions are reflected at 100% of their target vesting amount in the table above. Unvested shares related to restricted stock units with performance-based and market-based vesting conditions can be achieved at up to 200% of their target vesting amount.

The following table details unrecognized compensation cost and the remaining weighted-average period over which these costs are expected to be recognized for restricted stock units as of January 28, 2023:


(in thousands)	Service-based Restricted Stock Units		Performance-based Restricted Stock Units		Market-based Restricted Stock Units
Unrecognized compensation cost	$	34,026	$	3,267	$	4,907
Remaining weighted-average period cost is expected to be recognized (years)	1.2		1.2		0.9

Additional information pertaining to restricted stock units for Fiscal 2022, Fiscal 2021 and Fiscal 2020 follows:


(in thousands)	Fiscal 2022		Fiscal 2021		Fiscal 2020
Service-based restricted stock units:
Total grant date fair value of awards granted	$	28,878	$	23,959	$	19,843
Total grant date fair value of awards vested	16,794		13,360		14,083
Total intrinsic value of awards vested	28,037		36,507		8,147

Performance-based restricted stock units:
Total grant date fair value of awards granted	5,600		5,059		—
Total grant date fair value of awards vested	4,482		—		4,635

Market-based restricted stock units:
Total grant date fair value of awards granted	3,852		3,966		8,443
Total grant date fair value of awards vested	4,105		3,390		4,132
Total intrinsic value of awards vested	3,768		3,335		3,263

The weighted-average assumptions used for market-based restricted stock units in the Monte Carlo simulation during Fiscal 2022, Fiscal 2021 and Fiscal 2020 were as follows:


	Fiscal 2022			Fiscal 2021			Fiscal 2020
Grant date market price	$	30.24		$	31.78		$	12.31
Fair value	41.6			49.81			16.24
Assumptions:
Price volatility	66		%	66		%	67		%
Expected term (years)	2.8			2.9			2.4
Risk-free interest rate	2.5		%	0.3		%	0.2		%
Dividend yield	—			—			—
Average volatility of peer companies	72.3		%	72.0		%	66.0		%
Average correlation coefficient of peer companies	0.515			0.4694			0.4967

Stock Appreciation Rights

The following table summarizes stock appreciation rights activity for Fiscal 2022:


	Number of Underlying Shares	Weighted-Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Remaining Contractual Life (years)
Outstanding at January 29, 2022	236,139	$	32.55
Granted	—	—
Exercised	(4,350)	22.46
Forfeited or expired	(41,200)	48.06
Outstanding at January 28, 2023	190,589	$	29.43	$	1,262	1.7
Stock appreciation rights exercisable at January 28, 2023	190,589	$	29.43	$	1,262	1.7

No stock appreciation rights were exercised during Fiscal 2022 or Fiscal 2020. The grant date fair value of awards exercised during Fiscal 2021 follows:


(in thousands)	Fiscal 2021
Total grant date fair value of awards exercised	$	1,069

Refer to Note 2, “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share-Based Compensation,” for discussion regarding significant accounting policies related to share-based compensation.