Annual report pursuant to Section 13 and 15(d)

Stock-Based Compensation (Tables)

v3.22.4
Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement, Noncash Expense [Abstract]  
Incentive Equity Awards Granted By The Company
The activity related to incentive equity awards granted by the Company to key employees and senior officers for the year ended December 31, 2022, consisted of the following (in millions, except grant prices):
Balance as of December 31, 2021 Granted
Vested/Exercised (a)
Cancelled / Forfeited (b)
Balance as of December 31, 2022
RSUs
Number of RSUs 1.8  0.7  (0.5) (0.2) 1.8 
(c)
Weighted average grant price $ 47.83  $ 51.37  $ 47.63  $ 47.97  $ 48.79 
PSUs
Number of PSUs 0.4  0.3  —  (0.2) 0.5 
(d)
Weighted average grant price $ 48.18  $ 52.87  $ —  $ 45.11  $ 51.26 
NQs
Number of NQs 2.3  —  —  —  2.3 
(e)
Weighted average grant price $ 45.32  $ —  $ —  $ —  $ 45.36 
(a)Upon exercise of NQs and vesting of RSUs and PSUs, the Company issues new shares to participants.
(b)The Company recognizes cancellations and forfeitures as they occur.
(c)Aggregate unrecognized compensation expense related to RSUs was $50 million as of December 31, 2022, which is expected to be recognized over a weighted average period of 2.5 years.
(d)Aggregate unrecognized compensation expense related to PSUs that are probable of vesting was $14 million as of December 31, 2022, which is expected to be recognized over a weighted average period of 2.0 years. The maximum amount of compensation expense associated with PSUs that are not probable of vesting could range up to $20 million which would be recognized over a weighted average period of 1.3 years.
(e)There were 1.4 million NQs which were exercisable as of December 31, 2022. These NQs will expire over a weighted average period of 6.1 years and carry a weighted average grant date fair value of $8.52. Unrecognized compensation expense for the NQs was $4 million as of December 31, 2022, which is expected to be recognized over a weighted average period of 1.7 years.
Weighted Average Grant Date Fair Value Assumptions The Company did not grant any stock options during 2022. The fair value of stock options granted by the Company during 2021 and 2020 were estimated on the dates of these grants using the Black-Scholes option-pricing model with the relevant weighted average assumptions outlined in the table below. Expected volatility was based on both historical and implied volatilities of the Company’s stock and the stock of comparable companies over the estimated expected life for options.
The expected life represents the period of time these awards are expected to be outstanding. The risk-free interest rate is based on yields on U.S. Treasury strips with a maturity similar to the estimated expected life of the options. The projected dividend yield was based on the Company’s anticipated annual dividend divided by the price of the Company’s stock on the date of the grant.
Stock Options 2021 2020
    Grant date fair value $18.87 $7.27 - $7.28
    Grant date strike price $59.00 $41.04
    Expected volatility 44.80% 32.60  % - 32.88%
    Expected life (a)
6.25 years 6.25 - 7.50 years
    Risk-free interest rate 1.09% 0.95  % - 1.03%
Projected dividend yield 3.12% 4.87%
(a)The maximum contractual term for these options is 10 years.