Bath & Body Works, Inc.BBWI

Bath & Body Works, Inc. Stock Compensation Disclosure

10-KFiled Mar 12, 20263 min read
Share-based Compensation
Plan Summary
In 2020, the Company’s stockholders approved the 2020 Stock Option and Performance Incentive Plan (“2020 Plan”). The 2020 Plan replaced the 2015 Stock Option and Performance Incentive Plan (together with the 2020 Plan, the “Plans”). The Plans provide for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, restricted stock, performance share units and unrestricted shares. Historically, the Company granted stock options at a price equal to the fair market value of the stock on the date of grant. Stock options have a maximum term of 10 years. Stock options and restricted stock units generally vest over three-to-five-years. Performance share units generally cliff vest at the end of a three-year performance period based upon the Company’s achievement of pre-established goals over the performance period.
Under the Plans, 206 million options, restricted and unrestricted shares have been authorized to be granted to associates and directors. There were 10 million shares of common stock available for future issuance under the Plans as of January 31, 2026.
Income Statement Impacts
The following table provides Share-based Compensation Expense included in the Consolidated Statements of Income for 2025, 2024 and 2023:
202520242023
 (in millions)
Costs of Goods Sold, Buying and Occupancy$9 $11 $13 
General, Administrative and Store Operating Expenses22 29 30 
Total Share-based Compensation Expense$31 $40 $43 
The Company recognized incremental tax expense associated with share-based compensation of $2 million in 2025 and $1 million for 2023. There was no incremental tax expense associated with share-based compensation in 2024.
Restricted Stock Units and Performance Share Units
The following table provides the Company’s restricted stock unit and performance share unit activity on a combined basis for the year ended January 31, 2026:
Number of
Shares		Weighted-average
Grant Date Fair Value
 (in thousands) 
Unvested as of February 1, 2025
2,195 $41.69 
Granted1,762 27.80 
Vested(904)41.86 
Cancelled(638)35.92 
Unvested as of January 31, 2026
2,415 $33.06 
The fair value of restricted stock unit and performance share unit awards is generally based on the market value of the Company’s common stock on the grant date adjusted for anticipated dividend yields. The weighted-average estimated fair value of awards granted was $27.80 per share for 2025, $44.65 per share for 2024 and $35.93 per share for 2023.
The Company’s total intrinsic value of awards that vested was $28 million for 2025, $50 million for 2024 and $31 million for 2023. The Company’s total fair value at grant date of awards that vested was $38 million for 2025, $48 million for 2024 and $36 million 2023.
Tax benefits realized from tax deductions associated with awards that vested were $4 million for 2025, $8 million for 2024 and $6 million for 2023.
As of January 31, 2026, there was $29 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested restricted stock and performance share units. This cost is expected to be recognized over a weighted-average period of 1.9 years.

Historical Timeline

Fiscal YearFiled
2026Mar 12, 2026Showing above
2025Mar 14, 2025

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.

Other Available Disclosures

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