WOLVERINE WORLD WIDE INC /DE/WWW
WOLVERINE WORLD WIDE INC /DE/ Stock Compensation Disclosure
STOCK-BASED COMPENSATION
The Company recognized stock-based compensation expense of $24.4 million, $19.1 million and $15.2 million and related income tax benefits of $4.8 million, $3.7 million and $2.9 million for grants under its stock-based compensation plans in the statements of operations for fiscal years 2025, 2024 and 2023, respectively.
As of January 3, 2026, the Company had 4,790,839 stock incentive units (stock options, stock appreciation rights, restricted stock, restricted stock units and common stock) available for issuance under the Stock Incentive Plan of 2024 ("Stock Plan"). Each stock option or stock appreciation right granted counts as 1.0 stock incentive unit. Stock options granted under the Stock Plan have an exercise price equal to the fair market value of the underlying stock on the grant date, expire no later than ten years from the grant date and generally vest over three years. All other awards granted, including Restricted Awards and Performance Awards, count as 1.0 stock incentive units for each share, restricted share or restricted stock unit granted. Restricted Awards issued under the Stock Plan are subject to certain restrictions, including a prohibition against any sale, transfer or other disposition by the officer or employee during the vesting period (except for certain transfers for estate planning purposes for certain officers), and a requirement to forfeit all or a certain portion of the award upon certain terminations of employment. These restrictions typically lapse over a three-year period from the date of the award. The Company has elected to recognize expense for these stock-based incentive plans ratably over the vesting term on a straight-line basis. Certain option and restricted awards provide for accelerated vesting under various scenarios, including retirement, death and disability, and upon a change in control of the Company. Awards issued to employees that meet the specified retirement age and service requirements are vested upon the employee's retirement in accordance with plan provisions and the applicable award agreements issued under the Stock Plan. The Company issues shares to plan participants upon exercise or vesting of stock-based incentive awards from either authorized, but unissued shares or treasury shares.
The Board of Directors awards an annual grant of Performance Awards to certain plan participants. The number of Performance Awards that will be earned (and eligible to vest) during the performance period will depend on the Company’s level of success
in achieving two specifically identified performance targets. Any portion of the Performance Awards that are not earned by the end of the three-year measurement period will be forfeited. The final determination of the number of Performance Awards to be issued in respect to an award is determined by the Compensation Committee of the Company’s Board of Directors.
Restricted Awards and Performance Awards
A summary of the unvested Restricted Awards and Performance Awards is as follows:
| Restricted Awards | Weighted- Average Grant Date Fair Value | Performance Awards | Weighted- Average Grant Date Fair Value | ||||||||||||||||||||
| Unvested at December 31, 2022 | 1,516,478 | $ | 28.95 | 774,654 | $ | 34.14 | |||||||||||||||||
| Granted | 1,678,585 | 13.66 | 686,294 | 14.82 | |||||||||||||||||||
| Vested | (760,333) | 28.49 | (186,407) | 33.88 | |||||||||||||||||||
| Forfeited | (494,426) | 21.71 | (134,237) | 26.92 | |||||||||||||||||||
| Unvested at December 30, 2023 | 1,940,304 | $ | 17.23 | 1,140,304 | $ | 23.78 | |||||||||||||||||
| Granted | 1,961,114 | 8.89 | 1,293,404 | 13.21 | |||||||||||||||||||
| Vested | (781,487) | 17.83 | (57,529) | 36.68 | |||||||||||||||||||
| Forfeited | (351,036) | 14.01 | (263,893) | 16.85 | |||||||||||||||||||
| Unvested at December 28, 2024 | 2,768,895 | $ | 11.32 | 2,112,286 | $ | 18.72 | |||||||||||||||||
| Granted | 801,891 | 20.36 | 421,475 | 22.19 | |||||||||||||||||||
| Vested | (1,331,678) | 12.50 | (218,758) | 28.05 | |||||||||||||||||||
| Forfeited | (193,012) | 13.64 | (188,956) | 13.06 | |||||||||||||||||||
| Unvested at January 3, 2026 | 2,046,096 | $ | 13.96 | 2,126,047 | $ | 13.20 | |||||||||||||||||
As of January 3, 2026, there was $14.8 million of unrecognized compensation expense related to unvested Restricted Awards, which is expected to be recognized over a weighted-average period of 1.3 years. The total fair value of Restricted Awards vested during the year ended January 3, 2026 was $27.1 million. As of December 28, 2024, there was $17.0 million of unrecognized compensation expense related to unvested Restricted Awards, which was expected to be recognized over a weighted-average period of 1.2 years. The total fair value of Restricted Awards vested during the year ended December 28, 2024 was $8.5 million. As of December 30, 2023, there was $19.0 million of unrecognized compensation expense related to unvested Restricted Awards, which was expected to be recognized over a weighted-average period of 1.5 years. The total fair value of Restricted Awards vested during the year ended December 30, 2023 was $11.1 million.
As of January 3, 2026, there was $9.8 million of unrecognized compensation expense related to unvested Performance Awards, which is expected to be recognized over a weighted-average period of 1.7 years. The total fair value of Performance Awards vested during the year ended January 3, 2026 was $4.6 million. As of December 28, 2024, there was $8.2 million of unrecognized compensation expense related to unvested Performance Awards, which was expected to be recognized over a weighted-average period of 1.7 years. The total fair value of Performance Awards vested during the year ended December 28, 2024 was $0.5 million. As of December 30, 2023, there was $5.0 million of unrecognized compensation expense related to unvested Performance Awards, which was expected to be recognized over a weighted-average period of 1.7 years. The total fair value of Performance Awards vested during the year ended December 30, 2023 was $5.7 million.
Stock Options
A summary of the stock option transactions is as follows:
| Shares Under Option | Weighted-Average Grant Date Price | Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||||||||||||
| Outstanding at December 31, 2022 | 2,333,410 | $ | 22.43 | 2.4 | $ | — | |||||||||||||||||
| Exercised | (6,042) | 16.51 | |||||||||||||||||||||
| Canceled | (366,352) | 21.81 | |||||||||||||||||||||
| Outstanding at December 30, 2023 | 1,961,016 | $ | 22.56 | 1.7 | $ | — | |||||||||||||||||
| Exercised | (187,955) | 16.51 | |||||||||||||||||||||
| Canceled | (442,532) | 27.60 | |||||||||||||||||||||
| Outstanding at December 28, 2024 | 1,330,529 | $ | 21.74 | 1.0 | $ | 4.2 | |||||||||||||||||
| Exercised | (717,533) | 16.94 | |||||||||||||||||||||
| Canceled | (459,334) | 28.56 | |||||||||||||||||||||
| Outstanding and exercisable at January 3, 2026 | 153,662 | $ | 23.68 | 1.5 | $ | — | |||||||||||||||||
The total pretax intrinsic value of stock options exercised during fiscal years 2025, 2024 and 2023 was $8.2 million, $0.9 million and $0.0 million, respectively. There was no unrecognized compensation expense related to stock option grants as of January 3, 2026 and as of December 28, 2024.
The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the Company’s closing stock price as of each fiscal year end, which would have been received by the option holders had all option holders exercised options, where the market price of the Company's stock was above the strike price ("in-the-money"), as of that date. As of January 3, 2026, 11,088 outstanding options were exercisable and in-the-money. There were 750,351 in-the-money options exercisable as of December 28, 2024. The Company’s closing stock price was $18.21 per share as of January 3, 2026 and $22.48 per share as of December 28, 2024.
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.