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Stock Based Compensation | 12 Months Ended
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Feb. 01, 2025
Share-Based Payment Arrangement, Noncash Expense [Abstract] |
Stock Based Compensation | Stock-Based Compensation The following disclosures present the Company's equity plans on a combined basis. The equity plans are administered by the Compensation and Management Development Committee of the Board of Directors (the CMD Committee). The CMD Committee is authorized to grant options, stock appreciation rights, restricted stock and restricted stock units to officers and key employees of the Company and its subsidiaries and to non-employee directors. The equity plans are intended to help the Company attract and retain directors, officers, other key executives and employees and is also intended to provide incentives and rewards relating to the Company's business plans to encourage such persons to devote themselves to the business of the Company. There have been no grants of stock appreciation rights under the equity plans. Stock option grants have an exercise price at least equal to the market value of the underlying common stock on the date of grant, have ten-year terms and typically vest ratably over four years of continued employment. Restricted stock and time-based restricted stock unit awards generally vest one to four years from the date of grant. Performance-based restricted stock units generally are earned based on the attainment of specified goals achieved over the performance period. As of February 1, 2025, approximately 22.8 million shares of common stock were available for additional grants pursuant to the Company's equity plans. Shares awarded are generally issued from the Company's treasury stock. Stock-based compensation expense included the following components:
| 2024 |  | 2023 |  | 2022
| (millions)
Stock options | $ | — |  |  | $ | 1 |  |  | $ | 3 |
Restricted stock units | 58 |  |  | 46 |  |  | 51 |
| $ | 58 |  |  | $ | 47 |  |  | $ | 54 |
All stock-based compensation expense is recorded in SG&A expense in the Consolidated Statements of Income. There were no grants of stock options during 2024, 2023 or 2022. Restricted Stock Units The weighted average grant date fair values of performance-based and time-based restricted stock units granted during 2024, 2023 and 2022 are as follows:
| 2024 |  | 2023 |  | 2022
Restricted stock units (performance-based) | $ | 18.79 |  |  | $ | 16.16 |  |  | $ | 25.32 |
Restricted stock units (time-based) | 18.15 |  |  | 15.93 |  |  | 24.01 |
During 2024, 2023 and 2022, the CMD Committee approved awards of performance-based restricted stock units to certain senior executives of the Company. Each award reflects a target number of shares (Target Shares) that may be issued to the award recipient. These awards may be earned upon the completion of approximate three-year performance periods ending February 2, 2027, January 31, 2026, and February 1, 2025, respectively. Whether units are earned at the end of the performance period will be determined based on the achievement of certain performance objectives over the performance period. The performance objectives for the 2024, 2023 and 2022 awards include achieving a relative total shareholder return (TSR) external metric. The 2024 and 2023 awards also include an internal metric of adjusted EBITDA margin and the 2022 awards include internal metrics of digital sales and comparable store sales. Relative TSR reflects the change in the value of the Company's common stock over the performance period in relation to the change in the value of the common stock of a peer group index over the performance period, assuming the reinvestment of dividends. Depending on the results achieved during the approximate three-year performance periods, the actual number of shares that a grant recipient receives at the end of the period may range from 0% to 200% of the Target Shares granted for the 2024, 2023 and 2022 performance-based restricted stock units, The fair value of the Target Shares and restricted stock awards are based on the fair value of the underlying shares on the date of grant. The fair value of the portion of the Target Shares that relate to a relative TSR performance objective was determined using a Monte Carlo simulation analysis to estimate the total shareholder return ranking of the Company among a peer group over the remaining performance periods. The expected volatility of the Company's common stock at the date of grant was estimated based on a historical average volatility rate for the approximate three-year performance period. The dividend yield assumption was based on historical and anticipated dividend payouts. The risk-free interest rate assumption was based on observed interest rates consistent with the approximate three-year performance measurement period. The fair value of a restricted stock unit award at the grant date is equal to the market price of the Company's common stock on the grant date. Compensation expense is recorded for all restricted stock unit awards based on the amortization of the fair market value at the date of grant over the period the restrictions lapse or over the performance period of the performance-based restricted stock units. As of February 1, 2025, the Company had $55.0 million of unrecognized compensation costs related to nonvested restricted stock units, which is expected to be recognized over a weighted average period of approximately 2.4 years. Activity related to restricted stock units for 2024 is as follows:
| Shares |  | Weighted Average Grant Date Fair Value
| (thousands)
Nonvested, beginning of period | 8,647 |  | $ | 17.19 |
Granted – performance-based | 940 |  | 18.79 |
Performance adjustment | 45 |  | 20.36 |
Granted – time-based | 3,136 |  | 18.15 |
Forfeited | (783) |  | 18.50 |
Vested | (3,251) |  | 16.35 |
Nonvested, end of period | 8,734 |  | $ | 17.92 |

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