Science Applications International CorpSAIC
Science Applications International Corp Stock Compensation Disclosure
Note 8—Stock-Based Compensation:
Plan Summaries
As of January 30, 2026, the Company had stock-based compensation awards outstanding under the following plans: “2023 Equity Incentive Plan” ("2023 EIP"), “2013 Equity Incentive Plan” ("2013 EIP"), “Management Stock Compensation Plan” ("MSCP"), "Key Executive Stock Deferral Plan" ("KESDP"), and the “Amended and Restated 2013 Employee Stock Purchase Plan” ("ESPP") which are herein referred to together as the “Plans.” The Company issues new shares on the vesting of stock awards or exercise of stock options under these Plans. During fiscal year 2024, the Company terminated the Third Amended and Restated 2012 Long Term Performance Plan ("LTPP") and deregistered all remaining unissued shares thereunder.
On June 7, 2023, the Company’s stockholders approved the 2023 EIP. The 2023 EIP authorized 2.2 million new shares of the Company’s common stock, par value $0.0001 per share, to be issued as various types of stock-based compensation and cash awards. Awards previously issued and outstanding under the 2013 EIP will continue to remain outstanding and be subject to the terms of the 2013 EIP. After June 7, 2023, no new awards may be issued under the 2013 EIP and any awards that subsequently expire, are forfeited or canceled, are settled in cash, or are used to cover recipient tax obligations, will become available for issuance under the 2023 Plan. As of January 30, 2026, the total authorized shares of common stock for issuance under the 2023 EIP is 1.5 million.
The 2023 EIP and 2013 EIP both provide the Company’s employees and directors the opportunity to receive various types of stock-based compensation and cash awards. The terms of the stock-based awards granted to employees and directors are the same, except that those for directors cliff vest within one year of the grant date. As of January 30, 2026, the Company has unvested stock awards under the 2023 EIP and 2013 EIP, unvested performance shares under the 2023 EIP, and outstanding stock options under the 2013 EIP. Vesting stock awards granted in fiscal 2020 and thereafter generally vest equally over three years, while vesting stock awards granted prior to fiscal 2020 generally vest equally over four years. Stock options generally become exercisable evenly over three years. The maximum contractual term for stock options is ten years, but historically the Company has granted stock options with a seven-year contractual term. As of January 30, 2026, remaining stock options expected to be exercised are immaterial. The requisite service period for stock-based awards is accelerated for employees meeting certain retirement eligibility conditions. Certain officers are eligible for continued vesting of previously granted awards upon termination of employment or voluntary retirement, subject to the conditions set forth in the Company’s
Executive Severance, Change in Control and Retirement Policy effective September 5, 2023. Stock-based awards generally provide for accelerated vesting if there is a change in control (as defined in the 2023 EIP and 2013 EIP, as applicable). Vesting stock awards and performance share awards have forfeitable rights to dividends.
Performance shares are rights to receive shares of the Company’s stock upon satisfaction of certain requirements. Performance-based stock awards include service, performance, and market conditions. For performance-based stock awards granted in fiscal 2023 and thereafter, the performance metrics are based on three year cumulative operating cash flows and a three year cumulative measure of earnings. The market conditions are based on the Company's total shareholder return over the three year performance period as compared to the total shareholder return for a specified group of companies over the same period. These awards cliff vest at the end of the third fiscal year following the grant date, subject to meeting the minimum service requirements and the achievement of the Company’s performance metrics and market conditions, with the number of shares ultimately issued, if any, ranging up to 200% of the specified target shares. If performance is below a minimum threshold level of performance, no shares will be issued.
The Science Applications International Corporation KESDP was closed on December 31, 2014, and no further deferrals are allowed. Benefits from the KESDP are payable in shares of the Company’s stock that may be held in trust for the purpose of funding benefit payments to KESDP participants. The MSCP provides for awards in share units to eligible employees. Benefits are payable in shares of the Company’s stock that are held in a trust for the purpose of funding benefit payments to the participants. During fiscal 2017, all remaining outstanding awards in the MSCP vested. Vested deferred balances in both plans are paid on retirement based on the participant’s payout election, or upon termination.
On June 7, 2023, the Company’s stockholders approved an amended and restated ESPP which limits the total number of shares reserved for issuance to 2.0 million and extends the plan’s expiration date from September 26, 2023 to the earlier of its termination by the Board of Directors or the issuance of all shares available for issuance thereunder. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount of up to 15% of the fair market value on the date of purchase. During the three fiscal years ended January 30, 2026, the ESPP discount was 5% of the fair market value on the date of purchase, thereby resulting in the ESPP being non-compensatory. As of January 30, 2026, 1.5 million shares of the Company’s common stock are authorized for issuance under the ESPP.
Expense and Related Tax Benefits Recognized
Stock-based compensation expense and related tax benefits recognized under the Plans were:
| Year Ended | |||||||||||||||||
| January 30, 2026 | January 31, 2025 | February 2, 2024 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Stock-based compensation expense: | |||||||||||||||||
| Vesting stock awards | $ | 43 | $ | 37 | $ | 45 | |||||||||||
| Performance share awards | 21 | 16 | 23 | ||||||||||||||
| Total stock-based compensation expense | $ | 64 | $ | 53 | $ | 68 | |||||||||||
| Tax benefits recognized from stock-based compensation | $ | 18 | $ | 18 | $ | 25 | |||||||||||
The Company did not have stock-based compensation expense for stock options for fiscal 2026 or fiscal 2025. Stock-based compensation expense for stock options was not material for fiscal 2024.
Vesting Stock Awards
Vesting stock award activity for the fiscal year ended January 30, 2026 was:
| Shares of stock under vesting stock awards | Weighted-average grant date fair value | ||||||||||
| (in millions) | |||||||||||
| Unvested at January 31, 2025 | 0.7 | $ | 115.43 | ||||||||
| Awards granted | 0.5 | 109.06 | |||||||||
| Awards forfeited | (0.1) | 114.71 | |||||||||
| Awards vested | (0.3) | 109.06 | |||||||||
| Unvested at January 30, 2026 | 0.8 | $ | 114.11 | ||||||||
The grant date fair value of vesting stock awards is based on the closing market price of the Company’s common stock on the last trading day preceding the grant date. The weighted-average grant date fair value of the vesting stock awards granted in fiscal 2026, 2025 and 2024 was $109.06, $127.33 and $108.64, respectively. As of January 30, 2026 there was $41 million of unrecognized compensation cost, net of estimated forfeitures, related to vesting stock awards, which is expected to be recognized over a weighted-average period of 1.8 years. The fair value of vesting stock awards that vested in fiscal 2026, 2025 and 2024 was $38 million, $61 million and $48 million, respectively.
Performance Share Awards
Performance share award activity for the year ended January 30, 2026 was:
| Shares of stock under performance shares | Weighted-average grant date fair value | ||||||||||
| (in millions) | |||||||||||
| Unvested at January 31, 2025 | 0.3 | $ | 116.97 | ||||||||
| Awards granted | 0.2 | 136.72 | |||||||||
| Awards forfeited | (0.1) | 128.43 | |||||||||
| Awards vested | (0.2) | 109.69 | |||||||||
| Performance adjustments | — | 122.66 | |||||||||
| Unvested at January 30, 2026 | 0.2 | $ | 137.76 | ||||||||
The actual number of shares to be issued upon vesting ranges between 0-200% of the specified target shares. In the table above, the number of performance shares are presented at 100% of the specified target shares, except for awards that vested and the performance adjustment. The vested amount reflects the number of shares to be issued based on the actual achievement of the performance goals for shares that vested during the period. The performance adjustment amount reflects the increase or decrease in the number of performance shares vested compared to the number of performance shares that would have vested at target.
The weighted-average grant date fair value of the performance share awards granted in fiscal 2026, 2025 and 2024 was $136.72, $128.17 and $116.25, respectively. The grant date fair value of performance shares was determined using a Monte Carlo simulation model that incorporated multiple valuation assumptions, including the Company's expected total shareholder return relative to a specified group of companies defined within the award agreement. The primary assumptions included an expected volatility of 27.73%, 24.16%, and 27.35% for fiscal 2026, 2025 and 2024, respectively, and a risk-free interest rate of 3.59%, 4.46% and 3.68% for fiscal 2026, 2025 and 2024, respectively. The expected volatility was based on the historical volatility of the Company's stock price over a period commensurate with the expected term of the award as of the date of grant. The risk-free interest rate was based on the yield curve of a zero-coupon U.S. Treasury bond with a maturity equal to the expected term of the award on the date of grant.
The fair value of performance share awards that vested in fiscal 2026 was $17 million. As of January 30, 2026 there was $10 million of unrecognized compensation cost, net of estimated forfeitures, related to performance share awards, which is expected to be recognized over a weighted-average period of 1.6 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 16, 2026 | Showing above |
| 2025 | Mar 17, 2025 | |
| 2024 | Mar 20, 2024 | |
| 2023 | Apr 3, 2023 | |
| 2022 | Mar 28, 2022 | |
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.