Share-based compensation

Signet operates several share-based compensation plans which can be categorized as the “Omnibus Plan” and “Share Saving Plans.”

Impact on results

Share-based compensation expense and the associated tax benefits recognized in the consolidated income statements are as follows:



(in millions)	Fiscal 2018			Fiscal 2017			Fiscal 2016
Share-based compensation expense	$	16.1		$	8.0		$	16.4
Income tax benefit	$	(5.3	)	$	(2.8	)	$	(5.9	)

As of February 3, 2018, unrecognized compensation cost related to unvested awards granted under share-based compensation plans is as follows:



	Unrecognized Compensation Cost		Weighted average period
	(in millions)
Omnibus Plan	$	27.6	2.0 years
Share Saving Plans	4.1		1.7 years
Total	$	31.7

Since April 2012, the Company has opted to satisfy 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 2009, Signet adopted the Signet Jewelers Limited Omnibus Incentive Plan (the “Omnibus Plan”). Awards that may be granted under the Omnibus Plan include restricted stock, RSUs, stock options and stock appreciation rights. The Fiscal 2018, Fiscal 2017 and Fiscal 2016 awards granted under the Omnibus Plan have two elements, time-based restricted stock and performance-based RSUs. 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 include two performance measures, operating income (subject to certain adjustments) and return on capital employed (“ROCE”), with ROCE measure only applicable to senior executives. For both performance measures, cumulative results achieved during the relevant three year performance period are compared to target metrics established in the underlying grant agreements. The relevant performance is measured over a three year vesting period from the start of the fiscal year in which the award is granted. The Omnibus Plan permits the grant of awards to employees for up to 7,000,000 common shares.

The significant assumptions utilized to estimate the weighted-average fair value of awards granted under the Omnibus Plan are as follows:



	Omnibus Plan
	Fiscal 2018			Fiscal 2017			Fiscal 2016
Share price	$	65.74		$	109.03		$	136.37
Risk free interest rate	1.4		%	1.0		%	0.8		%
Expected term	2.7 years			2.8 years			2.9 years
Expected volatility	32.3		%	28.5		%	25.4		%
Dividend yield	2.1		%	1.1		%	0.7		%
Fair value	$	63.42		$	106.48		$	134.46

The risk-free interest rate is based on the US Treasury (for US-based award recipients in all fiscal years and UK-based award recipients in Fiscal 2018 and Fiscal 2017) or UK Gilt (for UK-based award recipients in Fiscal 2016) 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. The expected volatility is determined by calculating the historical volatility of Signet’s share price over the expected term of the award.

The Fiscal 2018 activity for awards granted under the Omnibus Plan 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 January 28, 2017	0.7		$	111.98	1.3 years	$	53.0
Fiscal 2018 activity:
Granted	0.9		63.42
Vested	(0.1	)	105.76
Lapsed	(0.4	)	84.41
Outstanding at February 3, 2018	1.1		$	82.65	1.5 years	$	55.0


⁽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 following table summarizes additional information about awards granted under the Omnibus Plan:



(in millions)	Fiscal 2018		Fiscal 2017		Fiscal 2016
Total intrinsic value of awards vested	$	7.1	$	13.6	$	22.2

Share Saving Plans

Signet has three share option savings plans (collectively, the “Share Saving Plans”) available to employees as follows:


•	Employee Share Savings Plan, for US employees


•	Sharesave Plan, for UK employees


•	Irish Sharesave Plan, for Republic of Ireland employees

The Share Saving Plans are compensatory and compensation expense is recognized over the requisite service period. In any 10 year period not more than 10% of the issued common shares of the Company from time to time may, in aggregate, be issued or be issuable pursuant to options granted under the Share Saving Plans or any other employees share plans adopted by Signet.

The Employee Share Savings Plan 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 15% to the closing price of the New York Stock Exchange on the date of grant. Options granted under the Employee Share Savings Plan vest after 24 months and are generally only exercisable between 24 and 27 months of the grant date.

The Sharesave Plan and Irish Sharesave Plan allow eligible employees to purchase common shares at a discount of approximately 20% below a determined market price based on the New York Stock Exchange. The market price is determined as the average middle market price for the three trading days prior to the invitation date, or the market price on the day immediately preceding the participation date or other market price agreed in writing, whichever is the higher value. Options granted under the Sharesave Plan and the Irish Sharesave Plan vest after 36 months and are generally only exercisable between 36 and 42 months from commencement of the related savings contract.

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 2018			Fiscal 2017			Fiscal 2016
Share price	$	59.84		$	84.37		$	139.18
Exercise price	$	52.00		$	67.24		$	114.67
Risk free interest rate	1.2		%	0.6		%	0.7		%
Expected term	2.7 years			2.7 years			2.6 years
Expected volatility	37.0		%	31.3		%	27.1		%
Dividend yield	2.7		%	1.7		%	0.8		%
Fair value	$	15.22		$	22.82		$	34.76

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 2018 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 January 28, 2017	0.3		$	74.30	2.0 years	$	3.0
Fiscal 2018 activity:
Granted	0.1		52.00
Exercised	—		46.55
Lapsed	(0.1	)	82.91
Outstanding at February 3, 2018	0.3		$	62.80	1.8 years	$	—
Exercisable at January 28, 2017	—		$	—		$	—
Exercisable at February 3, 2018	—		$	—		$	—

⁽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 2018		Fiscal 2017		Fiscal 2016
Weighted average grant date fair value per share of awards granted	$	15.22	$	22.82	$	34.76
Total intrinsic value of options exercised	$	0.1	$	1.5	$	6.4
Cash received from share options exercised	$	0.3	$	1.4	$	4.0