Designer Brands Inc.DBI

Designer Brands Inc. Stock Compensation Disclosure

10-KFiled Mar 30, 20263 min read
STOCK-BASED COMPENSATION
The Designer Brands Inc. 2014 Long-Term Incentive Plan, as amended and restated (the "Plan"), provides for the issuance of stock-based compensation awards to eligible recipients. Eligible recipients include associates, including executive officers, and non-employee directors. The maximum number of shares of Class A common shares underlying awards that may be issued over the term of the Plan cannot exceed 43.5 million shares. As of January 31, 2026, 23.9 million Class A common shares remain available for future stock-based compensation grants under the Plan. During 2025, 2024 and 2023, we recorded stock-based compensation expense of $19.0 million, $18.7 million and $29.4 million, respectively.

RESTRICTED STOCK UNITS

Grants of time-based RSUs generally cliff vest after three years, and performance-based RSUs generally vest based upon the achievement of pre-established goals and over the defined period of service. RSUs receive dividend equivalents in the form of additional RSUs, which are subject to the same restrictions and forfeiture provisions as the original award. The grant date fair value of RSUs is based on the closing market price of the Class A common shares on the date of the grant.

The following table presents activity related to RSUs for 2025:
Time-Based RSUsPerformance-Based RSUs
(shares in thousands)Number of SharesWeighted Average Grant Date Fair ValueNumber of SharesWeighted Average Grant Date Fair Value
Outstanding at beginning of period4,743$10.57 1,013 $11.75 
Granted6,638 $4.10 904 $4.05 
Vested(1,233)$13.23 (269)$14.02 
Forfeited(1,739)$6.18 (564)$6.55 
Outstanding at end of period8,409 $5.98 1,084 $7.47 

The total fair value of time-based RSUs that vested during 2025, 2024 and 2023, was $16.3 million, $14.2 million and $35.5 million, respectively. As of January 31, 2026, the total compensation cost related to unvested time-based RSUs not yet recognized was $15.8 million, with a weighted average expense recognition period remaining of 1.7 years.

The total fair value of performance-based RSUs that vested during 2025, 2024 and 2023 was $3.8 million, $4.4 million and $4.6 million, respectively. As of January 31, 2026, the total compensation cost related to unvested performance-based RSUs not yet recognized was approximately $2.0 million, with a weighted average expense recognition period remaining of 1.8 years.

DIRECTOR STOCK UNITS

We issue stock units to non-employee directors. Stock units are granted to each director on the date of each annual meeting of shareholders based on the closing market price of the Class A common shares. In addition, each director that is eligible to receive compensation for board service may elect to have the cash portion of such compensation paid in the form of stock units. Director stock units vest immediately, and directors are given the option to settle their units 30 days after the grant date, at a specified date more than 30 days following the grant date, or defer receipt until completion of board service. Director stock units not yet settled, which are not subject to forfeiture, are considered to be outstanding for the purposes of computing basic earnings per share. As of January 31, 2026, we had 1.1 million director stock units not yet settled.

Historical Timeline

Fiscal YearFiled
2026Mar 30, 2026Showing above
2025Mar 24, 2025
2018Mar 23, 2018

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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