BED BATH & BEYOND, INC.BBBY
BED BATH & BEYOND, INC. Stock Compensation Disclosure
17. STOCK-BASED AWARDS
We have equity incentive and compensatory plans that provide for the grant of stock-based awards, including restricted stock and performance shares, to employees and board members. Those plans include the Company's Amended and Restated 2005 Equity Incentive Plan (the "Plan") and the newly adopted Bed Bath & Beyond, Inc. 2025 Employment Inducement Equity Incentive Plan (the "Inducement Plan") (collectively, the "Plans"). Employee accounting applies to equity incentives and compensation granted by the Company to its own employees. When an award is forfeited prior to the vesting date, we recognize an adjustment for the previously recognized expense in the period of the forfeiture.
Stock-based compensation expense is classified within the corresponding operating expense categories on our consolidated statements of operations as follows (in thousands):
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cost of goods sold | $ | 6 | $ | 7 | $ | 37 | |||||||||||
| Sales and marketing | 332 | 594 | 796 | ||||||||||||||
| Technology | 1,747 | 6,263 | 8,733 | ||||||||||||||
| General and administrative | 8,768 | 12,391 | 13,452 | ||||||||||||||
| Total stock-based compensation expense | $ | 10,853 | $ | 19,255 | $ | 23,018 | |||||||||||
For the year ended December 31, 2025, there was a total $14.8 million of unrecognized compensation cost related to unvested restricted stock units, performance shares, and share options, which is expected to be recognized over a weighted-average period of approximately 2.09 years. At December 31, 2025, 1.1 million shares of stock remained available for future grants under the Plans.
Restricted stock unit awards
The Plans provide for the grant of restricted stock units and other types of equity awards to employees and directors of the Company. The Compensation Committee of the Board of Directors approves grants of restricted stock unit awards to our officers, board members and employees. These restricted stock unit awards generally vest on an annual ratable basis over a period of to four years. During the year ended December 31, 2025, we granted 1.8 million restricted stock unit awards under the Plan. In addition, during the year ended December 31, 2025, we granted 0.3 million restricted stock unit awards under the Inducement Plan to eligible recipients.
The cost of restricted stock units is determined using the fair value of our common stock on the date of the grant and compensation expense is either recognized on a straight-line basis over the vesting schedule or on an accelerated schedule when vesting of restricted stock awards exceeds a straight-line basis. The cumulative amount of compensation expense recognized at any point in time is at least equal to the portion of the grant date fair value of the award that is vested at that date.
Performance Shares
During the year ended December 31, 2025, we granted 0.8 million performance-based shares ("PSUs") to our executive management team under the Plan. For the 2025 PSUs granted, each grant of PSUs is eligible to vest based on achieving three performance metrics, with 50% of the grant subject to achievement of an Adjusted EBITDA goal, 25% of the grant subject to a Gross Margin goal, and the remaining 25% of the grant subject to a Contribution Margin goal, with a potential maximum payout of 135% of the "Target" number of PSUs. In addition, during the year ended December 31, 2025, we granted 0.2 million PSUs under the Inducement Plan to eligible recipients. To the extent any of the PSUs become earned based on the Company's achievement of the three aforementioned performance metrics, such earned PSUs will vest as to one-third of the earned PSUs on each of the first, second, and third anniversaries of the grant date, subject to the recipient’s continued service through the vesting date. To be eligible to vest in any tranche of the PSUs, the Company must meet the threshold performance metrics established for the performance period. Expense is recognized as compensation cost based on the fair value on the date of grant over the performance period, taking into account the probability that the Company will satisfy the performance goals.
Stock-based compensation related to the PSUs is included in the stock-based compensation expense table above combined with the expense associated with our restricted stock units, share options, and ESPP. Stock-based compensation related to the PSUs was a credit of $17,000 due to staff-related reductions and $5.9 million for the years ended December 31, 2025 and 2024, respectively.
The following table summarizes restricted stock unit and PSU award activity (in thousands, except fair value data):
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Units | Weighted Average Grant Date Fair Value | Units | Weighted Average Grant Date Fair Value | Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||||||||||||||
| Outstanding—beginning of year | 1,314 | $ | 20.98 | 984 | $ | 29.60 | 781 | $ | 50.17 | ||||||||||||||||||||||||||
| Granted at fair value | 3,035 | 6.28 | 1,818 | 19.73 | 1,101 | 20.92 | |||||||||||||||||||||||||||||
| Vested | (366) | 23.40 | (441) | 35.33 | (550) | 40.27 | |||||||||||||||||||||||||||||
| Forfeited | (946) | 13.75 | (1,047) | 18.89 | (348) | 31.43 | |||||||||||||||||||||||||||||
| Outstanding—end of year | 3,037 | $ | 8.21 | 1,314 | $ | 20.98 | 984 | $ | 29.60 | ||||||||||||||||||||||||||
Share Options
During the year ended December 31, 2024, we granted a stock option award with market conditions tied to our common stock price, to purchase 2.3 million shares of our common stock to our Executive Chairman and Chief Executive Officer (the "Share Options"). The Share Options will be eligible to vest in three installments upon the achievement of three separate stock price hurdles during the four-year period following the grant date. The weighted-average grant date fair value per share for the Share Options was $3.37. Stock-based compensation related to the Share Options is included in stock-based compensation expense table above combined with the expense associated with our restricted stock units, PSUs, and ESPP. Stock-based compensation related to the Share Options was $3.3 million and $2.4 million for the years ended December 31, 2025 and 2024, respectively.
The following table summarizes Share Options award activity for the year ended December 31, 2025 (in thousands, except fair value data and remaining contractual term):
| Units | Weighted Average Exercise Price Per Share | Weighted Average Contractual Term Remaining (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| Outstanding—beginning of year | 2,250 | $ | 53.33 | ||||||||||||||||||||
| Granted at fair value | — | — | |||||||||||||||||||||
| Vested | — | — | |||||||||||||||||||||
| Forfeited | — | — | |||||||||||||||||||||
| Outstanding—end of year | 2,250 | $ | 53.33 | 1.36 | $ | — | |||||||||||||||||
Vested and expected to vest as of December 31, 2025 | 2,250 | $ | 53.33 | 1.36 | $ | — | |||||||||||||||||
Vested and exercisable as of December 31, 2025 | — | $ | — | — | $ | — | |||||||||||||||||
Employee Stock Purchase Plan
The 2021 Employee Stock Purchase Plan (the "ESPP") grants our eligible employees a right to purchase shares of our common stock at a discount through payroll deductions of up to 25% of eligible compensation, subject to a cap of $21,250 in any calendar year. The ESPP provides for consecutive 24-month offering periods beginning March 1 and September 1 of each year. Each offering period shall consist of four consecutive six-month purchase periods. The first offering period under the ESPP commenced on September 1, 2021, with the first purchase date occurring on February 28, 2022.
On each purchase date, participating employees will purchase shares of our common stock at a price per share equal to 85% of the lesser of the fair market value of our common stock on (i) the offering date of the offering period or (ii) the purchase date (the "look-back" period). If the stock price of our common stock on any purchase date in an offering period is lower than the stock price on the offering date of that offering period, every participant in the offering will automatically be withdrawn from the offering after the purchase of shares on such purchase date and automatically enrolled in a new offering period commencing immediately subsequent to such purchase date.
The maximum number of shares of common stock that may be issued under the ESPP in aggregate is 3.0 million shares. For the years ended December 31, 2025, 2024, and 2023, 0.1 million shares, 0.1 million shares, and 0.1 million shares, respectively were purchased at an average price per share of $5.32, $12.23, and $16.25, respectively. At December 31, 2025, approximately 2.5 million shares of common stock remained available under the ESPP.
The ESPP is considered a compensatory plan and the fair value of the discount and the look-back period will be estimated using the Black-Scholes option pricing model and expense will be recognized straight-line over the 24-month offering period. We recognized $0.7 million, $1.1 million and $1.7 million in share-based compensation expense related to the ESPP for the years ended December 31, 2025, 2024 and 2023, respectively, which are included in the stock compensation expense table above combined with the expense associated with our restricted stock units, PSUs, and share options.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 23, 2024 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.