Barnes & Noble Education, Inc.BNED
Barnes & Noble Education, Inc. Stock Compensation Disclosure
Long-Term Incentive Compensation Expense
We have reserved 2,179,093 shares of our common stock for future grants in accordance with the Barnes & Noble Education Inc. Equity Incentive Plan. Types of equity awards that can be granted under the Equity Incentive Plan include options, restricted stock (“RS”), restricted stock units (“RSU”), performance shares (“PS”), performance share units (“PSU”), and phantom share units (or "Phantom Shares").
We recognize compensation expense for restricted stock awards and performance share awards ratably over the requisite service period of the award, which is generally three years. We recognize compensation expense for these awards based on the number of awards expected to vest, which includes an estimated average forfeiture rate. We calculate the fair value of these awards based on the closing stock price on the date the award was granted. For those awards with market conditions, we have determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the requisite service period regardless of whether the market condition is satisfied.
Restricted Stock Awards
An RS award is an award of common stock that is subject to certain restrictions during a specified period. RS awards are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares of unvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon (although payment may be deferred until the shares have vested) and are considered to be currently issued and outstanding. RS awards will have a minimum vesting period of one year.
An RSU is a grant valued in terms of our common stock, but no stock is issued at the time of grant. Each RSU may be redeemed for one share of our common stock once vested. RSUs are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the units except in very limited circumstances and with the consent of the compensation committee. Shares associated with unvested RSUs have no voting rights but are entitled to receive dividends and other distributions thereon (although payment may be deferred until the units have vested). RSUs generally vest over a period of three years, but will have a minimum vesting period of one year.
Phantom Shares
Phantom Shares were granted to employees. Each Phantom Share represents the economic equivalent to one share of the Company's common stock and will be settled in cash based on the fair market value of a share of common stock at each vesting date in an amount not to exceed a specific value per share. The Phantom Shares vest and settle in three equal installments commencing one year after the date of grant. The fair value of the Phantom Shares was determined using the closing stock price on the date of the award less the fair value of the call option which was estimated using the Black-Scholes model. The fair value of the liability for the cash-settled Phantom Share awards will be remeasured at the end of each reporting period through settlement to reflect current risk-free rate and volatility assumptions.
As of May 3, 2025 and April 27, 2024, respectively, we recorded an immaterial liability (Level 2 input) related to phantom share unit grants which is reflected in accrued liabilities on the Consolidated Balance Sheets.
Stock Options
For stock options granted with an "at market" exercise price, we determined the grant fair value using the Black-Scholes model and for stock options granted with "a premium" exercise price, we determined the grant date fair value using the Monte Carlo simulation model. The fair value models for stock options use assumptions that include the risk-free interest rate, expected volatility, expected dividend yield and expected term of the options. The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected stock option term. The expected stock option term represents the weighted average period of time that stock options granted are expected to be outstanding, based on vesting schedules and the contractual term of the stock options. Volatility is based on the historical volatility of the Company’s common stock over a period of time corresponding to the expected stock option term. The stock options are exercisable in four equal annual installments commencing one year after the date of grant and have a ten-year term. Holders are not entitled to receive dividends (if any) prior to vesting and exercise of the options.
Long-Term Incentive Compensation Activity
On June 11, 2024, we completed the Reverse Stock Split, which was approved by stockholders at a special meeting held on June 5, 2024. In connection with the Reverse Stock Split, every 100 shares of the common stock issued and outstanding were converted into one share of the Company’s common stock. The following table presents a summary of awards activity related to our current Equity Incentive Plan and reflects the Reverse Stock Split for all periods presented:
| Restricted Stock Awards | Restricted Stock Units | Phantom Shares | Performance Share Units | |||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||||||||||||||||||||||||||||||||
| Balance, April 27, 2024 | — | $ | — | 4,853 | $ | 503.72 | 468 | $ | 850.00 | — | $ | — | ||||||||||||||||||||||||||||||||||||||
| Granted | 111,484 | $ | 9.79 | 68,731 | $ | 9.46 | — | $ | — | 1,729,750 | $ | 9.55 | ||||||||||||||||||||||||||||||||||||||
| Vested | (29,764) | $ | 9.79 | (9,515) | $ | 147.17 | (428) | $ | — | — | $ | — | ||||||||||||||||||||||||||||||||||||||
| Forfeited | — | $ | — | (2,076) | $ | 448.33 | (40) | $ | — | (92,800) | $ | 9.61 | ||||||||||||||||||||||||||||||||||||||
| Balance, May 3, 2025 | 81,720 | $ | 9.79 | 61,993 | $ | 12.39 | — | $ | — | 1,636,950 | $ | 9.55 | ||||||||||||||||||||||||||||||||||||||
As of the 53 weeks ended May 3, 2025, we granted the following awards under the Equity Incentive Plan:
•On June 18, 2024, we granted 7,441 RSUs and 29,764 RSAs to members of the Board of Directors. The RSAs vested on September 18, 2024.
•On September 20, 2024, we granted 61,290 RSUs and 81,720 RSAs to members of the Board of Directors. The RSUs vest on the earlier of one year from the date of grant or the next annual meeting of stockholders.
•On September 20, 2024, we granted 1,533,250 PSUs to employees that include both a service condition and a market condition in order for PSUs to vest. The PSUs vest upon our Common Stock achieving a specified price per share (measured using a 100-day average volume weighted average price ("VWAP") for each of three tranches), and continued employment through a specified date. There is a period of seven years from the grant date in order to achieve the specific target share price. We have determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the derived service period regardless of whether the market condition is satisfied. The fair value models for the PSUs use assumptions that include the risk-free interest rate and expected volatility. The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected PSU term. Volatility is based on the historical volatility of the Company’s Common Stock over a period of time corresponding to the expected PSU term.
•On February 21, 2025, March 12, 2025, and March 31, 2025, we granted 77,000, 112,000 and 7,500 PSUs, respectively, to employees that include both a service condition and market condition in order for PSUs to vest. The PSUs vest upon our Common Stock achieving a specified price per share (measured using a 100-trading-day average VWAP for each of three tranches), and continued employment through a specified date. There is a period of seven years from the grant date in order to achieve the specific target share price. We have determined the grant date fair value using the Monte Carlo simulation model and compensation expense is recognized ratably over the derived
service period regardless of whether the market condition is satisfied. The fair value models for the PSUs use assumptions that include the risk-free interest rate and expected volatility. The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected PSU term. Volatility is based on the historical volatility of the Company’s Common Stock over a period of time corresponding to the expected PSU term.
| September 20, 2024 | PSU Tranche #1 | PSU Tranche #2 | PSU Tranche #3 | |||||||||||||||||
| Performance Milestone (VWAP) | $ | 10.00 | $ | 15.00 | $ | 20.00 | ||||||||||||||
| Valuation method utilized | Monte Carlo | Monte Carlo | Monte Carlo | |||||||||||||||||
| Risk-free interest rate | 3.53 | % | 3.53 | % | 3.53 | % | ||||||||||||||
| Company volatility | 119.84 | % | 119.84 | % | 119.84 | % | ||||||||||||||
| Derived service period | 1.0 year | 2.0 years | 3.0 years | |||||||||||||||||
| Grant date fair value per award | $ | 9.74 | $ | 9.62 | $ | 9.46 | ||||||||||||||
| February 21, 2025 | PSU Tranche #1 | PSU Tranche #2 | PSU Tranche #3 | |||||||||||||||||
| Performance Milestone (VWAP) | $ | 10.00 | $ | 15.00 | $ | 20.00 | ||||||||||||||
| Valuation method utilized | Monte Carlo | Monte Carlo | Monte Carlo | |||||||||||||||||
| Risk-free interest rate | 4.27 | % | 4.27 | % | 4.27 | % | ||||||||||||||
| Company volatility | 120.50 | % | 120.50 | % | 120.50 | % | ||||||||||||||
| Derived service period | 0.40 years | 0.67 years | 1.00 year | |||||||||||||||||
| Grant date fair value per award | $ | 10.10 | $ | 10.02 | $ | 9.94 | ||||||||||||||
| March 12, 2025 | PSU Tranche #1 | PSU Tranche #2 | PSU Tranche #3 | |||||||||||||||||
| Performance Milestone (VWAP) | $ | 10.00 | $ | 15.00 | $ | 20.00 | ||||||||||||||
| Valuation method utilized | Monte Carlo | Monte Carlo | Monte Carlo | |||||||||||||||||
| Risk-free interest rate | 4.13 | % | 4.13 | % | 4.13 | % | ||||||||||||||
| Company volatility | 120.51 | % | 120.51 | % | 120.51 | % | ||||||||||||||
| Derived service period | 0.41 years | 0.87 years | 1.21 years | |||||||||||||||||
| Grant date fair value per award | $ | 8.46 | $ | 8.38 | $ | 8.29 | ||||||||||||||
| March 31, 2025 | PSU Tranche #1 | PSU Tranche #2 | PSU Tranche #3 | |||||||||||||||||
| Performance Milestone (VWAP) | $ | 10.00 | $ | 15.00 | $ | 20.00 | ||||||||||||||
| Valuation method utilized | Monte Carlo | Monte Carlo | Monte Carlo | |||||||||||||||||
| Risk-free interest rate | 4.03 | % | 4.03 | % | 4.03 | % | ||||||||||||||
| Company volatility | 120.68 | % | 120.68 | % | 120.68 | % | ||||||||||||||
| Derived service period | 0.40 years | 0.63 years | 0.96 years | |||||||||||||||||
| Grant date fair value per award | $ | 10.41 | $ | 10.32 | $ | 10.24 | ||||||||||||||
| Stock Options | ||||||||||||||||||||
| Number of Shares | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | ||||||||||||||||||
| Balance, April 27, 2024 | 25,190 | $ | 241.00 | $ | 524.00 | |||||||||||||||
| Granted | — | $ | — | $ | — | |||||||||||||||
Exercised | — | $ | — | $ | — | |||||||||||||||
| Forfeited | (6,978) | $ | 269.24 | $ | 562.92 | |||||||||||||||
| Expired | (14,394) | $ | 222.71 | $ | 496.92 | |||||||||||||||
| Balance, May 3, 2025 | 3,818 | $ | 261.35 | $ | 552.07 | |||||||||||||||
| Exercisable, May 3, 2025 | 3,200 | $ | 248.85 | $ | 533.70 | |||||||||||||||
The aggregate grant date fair value of stock options that vested during the 53 weeks ended May 3, 2025 and the 52 weeks ended April 27, 2024 was $566 and $1,540, respectively.
Total fair value of vested share awards during the periods ended May 3, 2025 and April 27, 2024 was $2,258 and $4,405, respectively.
Long-Term Incentive Compensation Expense
We recognized compensation expense for long-term incentive plan awards in selling and administrative expenses as follows:
| 53 weeks ended | 52 weeks ended | ||||||||||
| May 3, 2025 | April 27, 2024 | ||||||||||
| Stock-based awards | |||||||||||
| Restricted stock expense | $ | 667 | $ | 11 | |||||||
| Restricted stock units expense | 604 | 2,041 | |||||||||
Performance share units expense (a) | 4,913 | — | |||||||||
Stock option expense(b) | (798) | 1,328 | |||||||||
| Sub-total stock-based awards: | $ | 5,386 | $ | 3,380 | |||||||
| Cash settled awards | |||||||||||
| Phantom share units expense | $ | (4) | $ | (154) | |||||||
| Total compensation expense for long-term incentive awards | $ | 5,382 | $ | 3,226 | |||||||
(a) Long-term incentive compensation expense reflects cumulative adjustments to reflect changes to the expected level of achievement of the respective grants.
(b) The stock option expense for the 53 weeks ended May 3, 2025 was primarily impacted due to forfeitures resulting from the resignation of our former Chief Executive Officer on June 11, 2024.
Total unrecognized compensation cost related to unvested awards as of May 3, 2025 was $11,384 and is expected to be recognized over a weighted-average period of 1.86 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 23, 2025 | Showing above |
| 2024 | Jul 1, 2024 | |
| 2023 | Jul 31, 2023 | |
| 2022 | Jun 29, 2022 | |
| 2021 | Jun 30, 2021 | |
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.