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Share-based compensation | 12 Months Ended
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Jan. 29, 2022
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” as further described below. Share-based compensation expense and the associated tax benefits recognized in the consolidated statements of operations are as follows:
(in millions) | Fiscal 2022 |  | Fiscal 2021 |  | Fiscal 2020
Share-based compensation expense | $ | 45.8 |  |  | $ | 14.5 |  |  | $ | 16.9 |
Income tax benefit | $ | (5.9) |  |  | $ | (3.6) |  |  | $ | (4.2) |
On March 25, 2020, in light of the economic situation as a result of the COVID-19 pandemic, the Company implemented temporary base salary reductions for members of senior management, with half of the salary reduction amount to be awarded in the Company’s common shares in lieu of cash. The base salaries were reinstated in September 2020. In Fiscal 2021, $1.3 million of Common Shares with no vesting requirements were awarded to senior management. As of January 29, 2022, 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 | $ | 50.4 |  |  | 1.9 years
Total | $ | 50.4 |  |  |
The Company satisfies share option exercises and the vesting of time-based restricted stock (“RSAs”), time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) 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 (as amended to the date here to, 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”, and 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 Plan. Awards that may be granted under the 2018 Omnibus Plan include RSAs, RSUs, PSUs, Common Shares, stock options, stock appreciation rights and other stock-based awards. The Fiscal 2022, Fiscal 2021 and Fiscal 2020 annual awards granted under the Omnibus Plans have four elements: RSAs, RSUs, PSUs, and Common Shares. The RSAs generally have a three-year vesting period, subject to continued employment, and have the same voting rights and dividend rights as Common Shares (which are payable once the RSAs have vested). PSUs awarded in Fiscal 2020 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. PSUs awarded in Fiscal 2021 and Fiscal 2022 include two performance measures: revenue and free cash flow (defined as cash flow from operations less capital expenditures). For the performance measures, cumulative results achieved during the relevant three- year performance period for Fiscal 2020 and a two-year performance period for Fiscal 2021 and Fiscal 2022 are compared to target metrics established in the underlying grant agreements. The time-based stock options generally vest on the third anniversary of the grant date and have a ten year contractual term, subject to continued employment. RSUs generally have a one or 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 6,075,000 common shares. RSU and PSU awards do not have dividend rights until vesting, and thus the grant date fair value of these awards is impacted by the dividend yield and term of the awards. However, RSAs do have dividend rights from the date of grant, and thus are valued at the market price of the Company’s stock on the grant date, consistent with awards of Common Shares. The significant assumptions utilized to estimate the weighted-average fair value of RSAs, Common Shares, RSUs, and PSUs granted under the Omnibus Plans are as follows:
| Omnibus Plan
| Fiscal 2022 |  | Fiscal 2021 |  | Fiscal 2020
Share price | $ | 60.65 |  |  | $ | 11.10 |  |  | $ | 20.76 |
Expected term | 2.9 years |  | 2.9 years |  | 2.8 years
Dividend yield | 4.3 | % |  | 5.5 | % |  | 7.5 | %
Fair value | $ | 53.58 |  |  | $ | 9.37 |  |  | $ | 18.14 |
The significant assumptions utilized to estimate the weighted-average fair value of stock options granted under the Omnibus Plans are as follows:
|  |  |  |  | Fiscal 2020
Share price |  |  |  |  | $ | 22.17 |
Exercise price |  |  |  |  | $ | 25.18 |
Risk free interest rate |  |  |  |  | 2.4 | %
Expected term |  |  |  |  | 6.0 years
Expected volatility |  |  |  |  | 42.7 | %
Dividend yield |  |  |  |  | 6.7 | %
Fair value |  |  |  |  | $ | 4.27 |
No stock options were granted during Fiscal 2022 or Fiscal 2021. 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 2022 activity for Common Shares, RSAs, RSUs and PSUs 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 January 30, 2021 | 4.8 |  |  | $ | 15.24 |  |  | 1.8 years |  | $ | 192.3 |
Fiscal 2022 activity: |  |  |  |  |  |  |
Granted | 1.0 |  |  | 54.22 |  |  |  |  |
Vested | (0.9) |  |  | 10.90 |  |  |  |  |
Lapsed or forfeited | (0.6) |  |  | 37.06 |  |  |  |  |
Outstanding at January 29, 2022 | 4.3 |  |  | $ | 22.28 |  |  | 1.1 years |  | $ | 369.3 |
(1) Intrinsic value for outstanding RSAs, RSUs, and PSUs is based on the fair market value of Signet’s common stock on the last business day of the fiscal year. The Fiscal 2022 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 January 30, 2021 | 0.5 |  |  | $ | 38.98 |  |  | 7.3 years |  | $ | 0.8 |
Fiscal 2022 activity: |  |  |  |  |  |  |
Exercised | (0.3) |  |  | 39.15 |  |  |  |  |
Outstanding at January 29, 2022 | 0.2 |  |  | $ | 38.70 |  |  | 6.3 years |  | $ | 8.9 |
(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 Plans:
(in millions) | Fiscal 2022 |  | Fiscal 2021 |  | Fiscal 2020
Total intrinsic value of awards vested | $ | 76.6 |  |  | $ | 5.0 |  |  | $ | 3.5 |
Share saving plans Signet has three share option savings plans available to employees as follows: •Employee Share Purchase Plan (“ESPP”), for US employees •Sharesave Plan, for UK employees •Irish Sub-Plan to the Sharesave Plan, for Republic of Ireland employees The ESPP 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 ESPP. The Company suspended participation in the ESPP in August 2019, thus no shares were issued in Fiscal 2022, Fiscal 2021 or Fiscal 2020. The Sharesave Plan and Irish Sub-Plan (collectively, the “Sharesave Plans”) 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 Plans 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. No awards have been granted under the Sharesave plans in Fiscal 2022, Fiscal 2021, or Fiscal 2020. At January 29, 2022, 0.1 million share awards granted under the Sharesave Plans were fully vested and had an ending weighted average exercise price of $43.72

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