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Share-based compensation
 12 Months Ended
Feb. 01, 2020
Share-based Payment Arrangement [Abstract]  
Share-based compensation Share-based compensation
Signet operates several share-based compensation plans which can be categorized as the “Omnibus Plans” and “Share Saving Plans.”
Impact on results
Share-based compensation expense and the associated tax benefits recognized in the consolidated statements of operations are as follows:
(in millions)
Fiscal 2020
 
Fiscal 2019
 
Fiscal 2018
Share-based compensation expense
$
16.9

 
$
16.5

 
$
16.1

Income tax benefit
$
(4.2
)
 
$
(4.1
)
 
$
(5.3
)

As of February 1, 2020, unrecognized compensation cost related to unvested awards granted under share-based compensation plans is as follows:
(in millions)
Unrecognized Compensation Cost
 
Weighted average period
Omnibus Plan
$
21.8

 
1.7 years
Share Saving Plans
0.4

 
1.2 years
Total
$
22.2

 


The Company satisfies share option exercises and the vesting of restricted stock and restricted stock units (“RSUs”) under its plans with the issuance of treasury shares.
Omnibus Plan
In June 2018, Signet’s shareholders approved and Signet adopted the Signet Jewelers Limited 2018 Omnibus Incentive Plan (the “2018 Omnibus Plan”). Upon adoption of the 2018 Omnibus Plan, shares that were previously available under the Signet Jewelers Limited Omnibus Incentive Plan, which was approved in June 2009 (the “2009 Omnibus Plan”)(collectively, with the 2018 Omnibus Incentive Plan, the “Omnibus Plans”) are no longer available for future grants and were not transferred to the 2018 Omnibus Incentive Plan. Awards that may be granted under the 2018 Omnibus Plan include restricted stock, RSUs, stock options, stock appreciation rights and other stock-based awards. The Fiscal 2020, Fiscal 2019 and Fiscal 2018 annual awards granted under the Omnibus Plans have two elements: time-based restricted stock and performance-based RSUs. Additionally, during Fiscal 2020 and Fiscal 2019, time-based stock options were granted under the Omnibus Plans. The time-based restricted stock has a three-year vesting period, subject to continued employment, and has the same voting rights and dividend rights as common shares (which are payable once the shares have vested). Performance-based RSUs granted in Fiscal 2020 and 2019 include two performance measures: operating income (subject to certain adjustments) and return on invested capital (“ROIC”), although the ROIC measure is applicable only to senior executives. Performance-based RSUs granted in Fiscal 2018 include two performance measures: operating income and return on capital employed (“ROCE”), although the ROCE measure is applicable only to senior executives. For the performance measures, cumulative results achieved during the relevant three year performance period are compared to target metrics established in the underlying grant agreements. The time-based stock options vest on the third anniversary of the grant date and have a ten year contractual term, subject to continued employment. Time-based RSUs generally have a three year vesting period, subject to continued employment. The 2018 Omnibus Plan permits the grant of awards to employees, non-employee directors and consultants for up to 3,575,000 common shares.
The significant assumptions utilized to estimate the weighted-average fair value of restricted stock and RSU awards granted under the Omnibus Plans are as follows:
 
Omnibus Plan
 
Fiscal 2020
 
Fiscal 2019
 
Fiscal 2018
Share price
$
20.76

 
$
41.36

 
$
65.74

Expected term
2.8 years

 
2.8 years

 
2.7 years

Dividend yield
7.5
%
 
3.6
%
 
2.1
%
Fair value
$
18.14

 
$
38.57

 
$
63.42

The significant assumptions utilized to estimate the weighted-average fair value of stock options granted under the Omnibus Plans are as follows:
 
Fiscal 2020
 
Fiscal 2019
Share price
$
22.17

 
$
40.09

Exercise price
$
25.18

 
$
39.72

Risk free interest rate
2.4
%
 
2.9
%
Expected term
6.0 years

 
6.5 years

Expected volatility
42.7
%
 
37.6
%
Dividend yield
6.7
%
 
3.7
%
Fair value
$
4.27

 
$
11.21

The risk-free interest rate is based on the US Treasury yield curve in effect at the grant date with remaining terms equal to the expected term of the awards. The expected term utilized is the length of time the awards are expected to be outstanding, primarily based on the
vesting period and expiration date of the awards. The expected volatility is determined by calculating the historical volatility of Signet’s share price over the expected term of the award.
The Fiscal 2020 activity for restricted stock and RSU awards granted under the Omnibus Plans is as follows:
 
Omnibus Plans
(in millions, except per share amounts)
No. of
shares
 
Weighted
average
grant date
fair value
 
Weighted
average
remaining
contractual
life
 
Intrinsic
value(1)
Outstanding at February 2, 2019
1.6

 
$
54.08

 
1.5 years
 
$
39.9

Fiscal 2020 activity:
 
 
 
 
 
 
 
Granted
1.6

 
18.14

 
 
 
 
Vested
(0.2
)
 
58.24

 
 
 
 
Lapsed
(0.2
)
 
80.47

 
 
 
 
Outstanding at February 1, 2020
2.8

 
$
31.04

 
1.5 years
 
$
66.9

(1) 
Intrinsic value for outstanding restricted stock and RSUs is based on the fair market value of Signet’s common stock on the last business day of the fiscal year.
The Fiscal 2020 activity for stock options granted under the Omnibus Plans is as follows:
 
Omnibus Plans
(in millions, except per share amounts)
No. of
shares
 
Weighted
average
exercise
price
 
Weighted
average
remaining
contractual
life
 
Intrinsic
value(1)
Outstanding at February 2, 2019
0.8

 
$
39.72

 
9.2 years
 
$
—

Fiscal 2020 activity:
 
 
 
 
 
 
 
Granted
0.1

 
25.18

 
 
 
 
Exercised
—

 
—

 
 
 
 
Lapsed
(0.2
)
 
39.72

 
 
 
 
Outstanding at February 1, 2020
0.7

 
$
39.13

 
8.3 years
 
$
—

(1)    Intrinsic value for outstanding awards is based on the fair market value of Signet’s common stock on the last business day of the fiscal year.
The following table summarizes additional information about awards granted under the Omnibus Plan:
(in millions)
Fiscal 2020
 
Fiscal 2019
 
Fiscal 2018
Total intrinsic value of awards vested
$
3.5

 
$
6.8

 
$
7.1


Share Saving Plans
Signet has three share option savings plans (collectively, the “Share Saving Plans”) available to employees as follows:
•
Employee Share Purchase Plan, for US employees
•
Sharesave Plan, for UK employees
•
Irish Sub-Plan to the Sharesave Plan, for Republic of Ireland employees
The Employee Share Purchase Plan as adopted in 2018 is a savings plan intended to qualify under US Section 423 of the US Internal Revenue Code and allows employees to purchase common shares at a discount of approximately 5% to the closing price of the New York Stock Exchange on the date of purchase, which occurs on the last trading day of a twelve-month offering period. This plan is non-compensatory and no more than 1,250,000 shares may be issued under the Employee Share Purchase Plan.
The Sharesave Plan and Irish Sub-Plan as adopted in 2018 allow eligible employees to be granted, and to exercise, options over common shares at a discount of approximately 15% below a determined market price based on the New York Stock Exchange, using savings accumulated under savings contract entered into in accordance with the relevant plan rules. The market price is generally determined as one of: (i) the average middle market price for the three trading days immediately prior to the invitation date; (ii) the market price on the day immediately preceding the invitation date; or (iii) the market price at such other time as may be agreed with Her Majesty’s Revenue and Customs Options granted under the Sharesave Plan and the Irish Sub-Plan vest after 36 months and are generally only exercisable between 36 and 42 months from commencement of the related savings contract. These plans are compensatory and compensation expense is recognized over the requisite service period, and no more than 1,000,000 shares may be allocated under these plans.
The significant assumptions utilized to estimate the weighted-average fair value of awards granted under the Share Saving Plans are as follows:
 
Share Saving Plans
 
Fiscal 2019
 
Fiscal 2018
Share price
$
58.50

 
$
59.84

Exercise price
$
57.97

 
$
52.00

Risk free interest rate
3.0
%
 
1.2
%
Expected term
3.7 years

 
2.7 years

Expected volatility
44.4
%
 
37.0
%
Dividend yield
2.6
%
 
2.7
%
Fair value
$
18.07

 
$
15.22


The risk-free interest rate is based on the US Treasury (for US-based award recipients) or UK Gilt (for UK-based award recipients) yield curve in effect at the grant date with remaining terms equal to the expected term of the awards. The expected term utilized is based on the contractual vesting period of the awards, inclusive of any exercise period available to award recipients after vesting. The expected volatility is determined by calculating the historical volatility of Signet’s share price over the expected term of the awards.
The Fiscal 2020 activity for awards granted under the Share Saving Plans is as follows:
 
Share Saving Plans
(in millions, except per share amounts)
No. of
shares
 
Weighted
average
exercise
price
 
Weighted
average
remaining
contractual
life
 
Intrinsic
value(1)
Outstanding at February 2, 2019
0.2

 
$
54.80

 
1.5 years
 
$
—

Fiscal 2020 activity:
 
 
 
 
 
 
 
Granted
—

 
—

 
 
 
 
Exercised
—

 
—

 
 
 
 
Lapsed
(0.1
)
 
57.62

 
 
 
 
Outstanding at February 1, 2020
0.1

 
$
54.78

 
1.1 years
 
$
—

Exercisable at February 2, 2019
—

 
$
—

 
 
 
$
—

Exercisable at February 1, 2020
—

 
$
—

 
 
 
$
—

(1)    Intrinsic value for outstanding awards is based on the fair market value of Signet’s common stock on the last business day of the fiscal year.
The following table summarizes additional information about awards granted under the Share Saving Plans:
(in millions, except per share amounts)
Fiscal 2019
 
Fiscal 2018
Weighted average grant date fair value per share of awards granted
$
18.07

 
$
15.22

Total intrinsic value of options exercised
$
—

 
$
0.1

Cash received from share options exercised
$
—

 
$
0.3