Stock Incentive Plan

12 Months Ended

Feb. 01, 2025

Share-Based Payment Arrangement [Abstract]

TJX has a Stock Incentive Plan under which options and other share-based awards may be granted to its directors, officers and key employees. The number of shares authorized for issuance under this plan has been approved by TJX’s shareholders, and all share-based compensation awards are made under this plan. The Stock Incentive Plan, as amended with shareholder approval, has provided for the issuance of up to 723 million shares with 39 million shares available for future grants as of February 1, 2025. TJX issues shares under the plan from authorized but unissued common stock.

Total compensation cost related to share-based compensation was $183 million, $160 million and $122 million in fiscal 2025, 2024 and 2023, respectively. As of February 1, 2025, there was $232 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plan. That cost is expected to be recognized over a weighted-average period of 2 years.

Stock Options

Options for the purchase of common stock are granted with an exercise price that is 100% of market price on the grant date, generally vest in thirds over a 3-year period starting 1 year after the grant, and have a 10-year maximum term. When options are granted with other vesting terms, the vesting information is reflected in the valuation.

The fair value of options is estimated as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:


	Fiscal Year Ended
	February 1, 2025			February 3, 2024			January 28, 2023
Risk-free interest rate	3.47		%	4.51		%	3.69		%
Dividend yield	1.3		%	1.5		%	1.8		%
Expected volatility factor	24.4		%	24.1		%	26.0		%
Expected option life	5.5 years			5.5 years			5.5 years
Weighted average fair value of options issued	$	29.86		$	24.62		$	16.68

The risk-free interest rate is for periods within the contractual life of the option based on the U.S. Treasury yield curve in effect at the time of grant. The Company uses historical data to estimate option exercises, employee termination behavior and dividend yield within the valuation model. Expected volatility is based on a combination of implied volatility from traded options on the Company’s stock, and historical volatility during a term approximating the expected life of the option granted. The expected option life represents an estimate of the period of time options are expected to remain outstanding based upon historical exercise trends. Employee groups and option characteristics are considered separately for valuation purposes, when applicable.

A summary of the status of TJX’s stock options and related weighted average exercise prices (“WAEP”) is presented below:


	Fiscal Year Ended
	February 1, 2025			February 3, 2024			January 28, 2023
Shares in millions	Options	WAEP		Options	WAEP		Options	WAEP

Outstanding at beginning of year	35	$	58.65	37	$	51.88	40	$	47.11
Granted	4	117.25		5	91.00		6	65.54
Exercised	(8)	48.35		(7)	43.39		(8)	38.12
Forfeitures	(0)	82.98		(0)	68.32		(1)	63.29
Outstanding at end of year	31	$	68.26	35	$	58.65	37	$	51.88
Options exercisable at end of year	23	$	56.87	25	$	50.64	26	$	45.99

The total intrinsic value of options exercised was $466 million in fiscal 2025, $278 million in fiscal 2024 and $294 million in fiscal 2023.

The following table summarizes information about stock options outstanding that were expected to vest and stock options outstanding that were exercisable as of February 1, 2025:


	Shares (in millions)	Aggregate Intrinsic Value (in millions)		Weighted Average Remaining Contract Life	WAEP
Options outstanding expected to vest(a)	8	$	234	8.8 years	$	96.50
Options exercisable	23	1,526		4.9 years	56.87
Total outstanding options vested and expected to vest	31	$	1,760	6.0 years	$	67.54

(a)Reflects 9 million unvested options, net of anticipated forfeitures.

Stock Awards

TJX grants restricted stock units and performance share units under the Stock Incentive Plan. Restricted stock units and performance share units are collectively referred to as stock awards. These stock awards were granted without a purchase price to the recipient and are subject to vesting conditions. Vesting conditions for performance share units include specified performance criteria, generally for a period of three fiscal years. The grant date fair value of the stock awards is charged to income over the requisite service period during which the recipient must remain employed. The fair value of the stock awards is determined at date of grant in accordance with ASC Topic 718 and, for performance share units, assumes that performance goals will be achieved at target. Performance share units and related compensation costs recognized are adjusted, as applicable, for performance above or below the target specified in the award.

There were no significant modifications to stock awards in fiscal 2025, fiscal 2024 or fiscal 2023.

A summary of the status of the Company’s non-vested stock awards and changes during fiscal 2025 is presented below:


In thousands except grant date fair value	Restricted Stock Units	Performance Share Units	Total Stock Awards	Weighted Average Grant Date Fair Value
Nonvested at beginning of year	1,280	1,063	2,343	$	67.76
Granted	292	300	592	99.47
Vested	(413)	(285)	(698)	65.53
Forfeited	(18)	(7)	(25)	78.36

Nonvested at end of year	1,141	1,071	2,212	$	76.82

A summary of units granted and the weighted average grant date fair value for total stock awards over the previous two fiscal years is presented below:


	Fiscal Year Ended
In thousands except grant date fair value	February 3, 2024		January 28, 2023
Granted	694		932
Weighted Average Grant Date Fair Value	$	76.21	$	60.46

The fair value of awards that vested was $46 million in fiscal 2025, $48 million in fiscal 2024 and $55 million in fiscal 2023.

The nonvested performance share units are based on the target level of performance achievement under the awards. The actual payout of performance share units will depend on performance results for the award cycle.

Other Awards

TJX also awards deferred shares to its outside directors under the Stock Incentive Plan. As of the end of fiscal 2025, a total of 348 thousand of these deferred shares were outstanding under the plan.