Savers Value Village, Inc.SVV
Savers Value Village, Inc. Stock Compensation Disclosure
Stock-Based Compensation
2019 Management Incentive Plan
On March 28, 2019, the Company adopted the 2019 Management Incentive Plan (the “2019 Plan”) which allowed for the issuance of stock options to directors, officers and key employees. Stock options awarded under the 2019 Plan may contain both service and performance conditions and have a 10-year maximum contractual term. In connection with the adoption of the Omnibus Incentive Compensation Plan (as defined below), the Company ceased issuing awards under the 2019 Plan. As a result, no shares remain available for issuance under the 2019 Plan; however, the 2019 Plan continues to govern awards that are outstanding under it. As of January 3, 2026, 11.5 million shares remain subject to outstanding options under the 2019 Plan.
Omnibus Incentive Plan
In connection with the IPO, the Company’s Board of Directors (the “Board”) approved the Omnibus Incentive Compensation Plan (the “Omnibus Incentive Plan”), which became effective on June 28, 2023, the date the SEC declared our IPO registration statement on Form S-1 effective.
The Omnibus Incentive Plan allows for issuance of up to 15.0 million new shares of common stock. In addition, should any awards under the 2019 Plan expire, terminate or be canceled, the shares of common stock underlying those awards will become available for issuance under the Omnibus Incentive Plan. Awards under the Omnibus Incentive Plan may be in the form of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, other stock-based awards and cash awards. Awards issued under the Omnibus Incentive Plan have a maximum contractual term of 10 years. As of January 3, 2026, there were 11.6 million shares available for future issuance under the Omnibus Incentive Plan.
Stock-based compensation
The Company classifies stock-based compensation expense in salaries, wages and benefits in the Consolidated Statements of Operations and Comprehensive Income. The Company recognized stock-based compensation expense of $38.6 million, $61.6 million and $72.6 million during fiscal 2025, 2024 and 2023, respectively. The total tax benefit associated with stock-based compensation for fiscal 2025, 2024 and 2023 was $4.7 million, $6.0 million and $7.2 million, respectively.
Equity-classified time-based options
Stock option awards containing only a service condition (“time-based options”) generally vest in equal annual installments over a one-year, three-year or five-year period from the date of grant provided the participant continues to be employed by, or provide service to, the Company through each vesting date. Stock-based compensation cost for time-based options is measured at the grant date based on the fair value of the award using the Black-Scholes-Merton option pricing model and is recognized on a straight-line basis over the requisite service period of the award. The Company accounts for forfeitures of time-based options as they occur.
The following assumptions apply to time-based options awarded during fiscal 2025, 2024 and 2023 under the Black-Scholes-Merton option pricing model:
| Fiscal Year | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Expected volatility | 35.4% to 35.9% | 35.9% to 43.0% | 35.4% to 35.7% | ||||||||||||||
| Risk-free interest rate | 3.8% to 4.1% | 3.9% to 4.3% | 3.4% to 4.2% | ||||||||||||||
| Expected term (in years) | 6.0 | 6.0 to 6.5 | 6.5 | ||||||||||||||
The dividend yield assumption is zero for fiscal 2025, 2024 and 2023. Although the Company paid a cash dividend in February 2023 and December 2022, the Company has no history of making regular dividends, nor does it anticipate paying any cash dividends in the foreseeable future.
The weighted average grant-date fair value of time-based stock options awarded during fiscal 2025, 2024 and 2023 was $2.98, $9.26 and $6.01, respectively.
Expected volatility is based on historic share price volatilities of comparable publicly traded companies over a term consistent with the expected term. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of each grant, which corresponds to the expected term of the stock options. Based upon limited exercise history, the Company has elected to use the simplified method for estimating the expected term. The expected term of options granted represents the period of time that options are expected to be outstanding.
The following table summarizes activity related to time-based options:
| (in thousands, except per share amounts and remaining term) | Number of Options (#) | Weighted Average Exercise Price Per Share ($) | Weighted Average Remaining Contractual Term (in Years) | Aggregate Intrinsic Value ($) | |||||||||||||||||||
| Outstanding at December 28, 2024 | 5,946 | 7.06 | 6.30 | 29,842 | |||||||||||||||||||
| Granted | 1,621 | 7.11 | |||||||||||||||||||||
| Exercised | (713) | 1.53 | |||||||||||||||||||||
| Forfeited or expired | (34) | 13.57 | |||||||||||||||||||||
| Outstanding at January 3, 2026 | 6,820 | 7.62 | 6.36 | 24,793 | |||||||||||||||||||
| Exercisable at January 3, 2026 | 3,899 | 5.11 | 4.84 | 20,950 | |||||||||||||||||||
The total intrinsic value of time-based options exercised during fiscal 2025, 2024 and 2023 was $7.0 million, $21.8 million and $2.6 million, respectively. As of January 3, 2026, unrecognized compensation expense related to outstanding time-based options was $9.6 million, which is expected to be recognized over a weighted average remaining vesting period of 2.12 years.
Equity-classified performance-based options
Stock option awards containing a performance condition (“performance-based options”) vest in 25% increments as performance conditions are achieved through the term of the options. Twenty-five percent of outstanding performance-based options vested upon completion of the Company’s IPO, with the remainder scheduled to vest in equal increments over three years starting on June 30, 2024 provided market-specific conditions, including stock price performance, are achieved. The vesting of performance-based options is subject to continued employment through the vesting date. To the extent that the requisite service is rendered, compensation cost for accounting purposes is not reversed; rather, it is recognized regardless of whether the market-specific conditions are achieved. The Company accounts for forfeitures of performance-based options as they occur.
In October 2022, May 2023 and July 2023, the Company modified the vesting terms of its performance-based options to reflect the vesting terms above. The Company determined that the modified vesting terms constituted modifications under Topic 718, Compensation - Stock Compensation and thus remeasured the fair value of the outstanding performance-based options as of their respective modification dates. Forty-one grantees were affected by the modifications that occurred in October 2022, May 2023 and July 2023. A Black-Scholes-Merton option pricing model was used to determine the grant-date fair value of the performance-based options that were tied to the Company’s IPO and a Monte Carlo simulation under the option pricing framework was used to determine the grant-date fair value of the performance-based options subject to market-specific conditions.
During fiscal 2025, 2024 and 2023, we recognized $22.3 million, $51.3 million and $38.8 million, respectively, of expense related to amortization of the remaining outstanding performance-based options that is recognized on a graded vesting basis over their expected vesting period. During fiscal 2023, we also recognized $28.0 million of expense related to performance-based options that vested upon completion of our IPO.
Black-Scholes-Merton option pricing model
The following assumptions were used to remeasure the fair value of performance-based options resulting from the October 2022 and May 2023 modifications under the Black-Scholes-Merton option pricing model:
| Fiscal Year | |||||||||||
| 2023 | 2022 | ||||||||||
| Expected volatility | 35.5% | 35.1% | |||||||||
| Risk-free interest rate | 3.5% | 3.8% | |||||||||
| Expected term (in years) | 6.5 | 6.5 | |||||||||
The dividend yield assumption was zero for fiscal 2023 and 2022. Although the Company paid a cash dividend in February 2023 and December 2022, the Company did not have a history of making regular dividends, nor did it anticipate paying any cash dividends in the foreseeable future.
The weighted average grant-date fair value of performance-based stock options modified during fiscal 2023 and 2022 was $16.32 and $13.51, respectively.
Expected volatility is based on historic share price volatilities of comparable publicly traded companies over a term consistent with the expected term. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of each grant, which corresponds to the expected term of the stock options. Based upon limited exercise history, the Company has elected to use the simplified method for estimating the expected term. The expected term of options granted represents the period of time that options are expected to be outstanding.
Monte Carlo simulation
The following assumptions were used to remeasure the fair value of performance-based options resulting from the July 2023 modification under the Monte Carlo simulation:
| Fiscal Year | |||||
| 2023 | |||||
| Expected volatility | 35.0% | ||||
| Risk-free interest rate | 3.55% to 3.74% | ||||
| Expected term (in years) | 3.1 to 6.6 | ||||
The dividend yield assumption was zero. Although the Company paid a cash dividend in February 2023 and December 2022, the Company did not have a history of making regular dividends, nor did it anticipate paying any cash dividends in the foreseeable future.
The weighted average grant-date fair value of performance-based stock options modified during July 2023 was $21.18.
Expected volatility is based on historic share price volatilities of comparable publicly traded companies over a term consistent with the expected term. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of each grant, which corresponds to the expected term of the stock options. Based upon limited exercise history, the Company has elected to use the simplified method for estimating the expected term. The expected term of options granted represents the period of time that options are expected to be outstanding.
The following table summarizes activity related to performance-based options:
| (in thousands, except per share amounts and remaining term) | Number of Options (#) | Weighted Average Exercise Price Per Share ($) | Weighted Average Remaining Contractual Term (in Years) | Aggregate Intrinsic Value ($) | |||||||||||||||||||
| Outstanding at December 28, 2024 | 7,245 | 2.10 | 5.07 | 59,455 | |||||||||||||||||||
| Exercised | (471) | 1.58 | |||||||||||||||||||||
| Forfeited or expired | (29) | 1.93 | |||||||||||||||||||||
| Outstanding at January 3, 2026 | 6,745 | 2.14 | 4.05 | 49,296 | |||||||||||||||||||
| Exercisable at January 3, 2026 | 3,045 | 2.20 | 4.09 | 22,079 | |||||||||||||||||||
The total intrinsic value of performance-based options exercised during fiscal 2025 and 2024 was $4.4 million and $4.1 million, respectively. No performance-based options were exercised during fiscal 2023. The Company did not award performance-based options during fiscal 2025, 2024 or 2023. As of January 3, 2026, unrecognized compensation expense related to outstanding performance-based options was $6.0 million, which is expected to be fully recognized by the second quarter of fiscal 2026.
Equity-classified restricted stock units
RSUs containing only a service condition generally vest in equal annual installments over a one-year or three-year period from the date of grant, provided the participant continues to be employed by, or provide service to, the Company through each vesting date. The fair value of RSUs is determined using the closing price of the Company’s common stock on the date of the grant. All RSUs were granted after the Company’s common stock commenced trading on June 29, 2023.
The following table summarizes activity related to RSUs as of January 3, 2026:
| (in thousands, except per share amounts) | Number of Units (#) | Weighted Average Grant-Date Fair Value Per Share ($) | |||||||||
| Unvested at December 28, 2024 | 839 | 20.13 | |||||||||
| Granted | 1,543 | 7.72 | |||||||||
| Vested | (235) | 20.60 | |||||||||
| Forfeited | (65) | 13.11 | |||||||||
| Unvested at January 3, 2026 | 2,082 | 11.09 | |||||||||
As of January 3, 2026, unrecognized compensation expense related to outstanding RSUs was $14.2 million, which is expected to be recognized over a weighted average remaining vesting period of 2.0 years.
Liability-classified restricted stock units
The Company’s annual incentive compensation program for certain employees includes awards of RSUs that are earned based on the achievement of Company-specific performance metrics for a given fiscal year, and continued employee service over a defined period. The level of performance determines the compensation cost, and the number of RSUs to be issued will be determined based on the attained award amount divided by the market price of the Company’s common stock on the date of grant.
Prior to grant, the RSUs are considered liability-classified awards. Upon issuance, the awards will become equity-classified as they no longer meet the criteria for liability classification. The grant date of the awards typically occurs during the first quarter following the performance year, and the awards vest on the one-year anniversary of the date of grant, subject to continued employment until that date. As of January 3, 2026, $2.0 million was accrued and included in accrued payroll and related taxes in the Consolidated Balance Sheets.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Feb 20, 2026 | Showing above |
| 2024 | Feb 21, 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.