STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION.

SHARES AUTHORIZED FOR STOCK-BASED COMPENSATION PROGRAMS.

At December 31, 2021, a total of 20,226,619 shares of unissued common stock were authorized for issuance under our stock-based compensation plans. Additionally, a total of 1,320,803 shares are authorized for issuance under a plan whereby substantially all employees may acquire common stock through payroll deductions at prevailing market prices.

STOCK OPTIONS.

The following table summarizes the status of, and changes in, our stock options during 2021.


	Options	Weighted- average exercise price		Weighted-average remaining contractual term in years
Outstanding at December 31, 2020	4,379,663	$	71.67

Exercised	(1,533,084)	$	69.44


Outstanding at December 31, 2021	2,846,579	$	72.87	2.5
Exercisable at December 31, 2021	2,846,579	$	72.87	2.5

Compensation and related costs includes a charge for stock option-based compensation expense of $2.0 million in 2020 and $5.1 million in 2019. There was no stock option-based compensation expense in 2021.

The total intrinsic value of options exercised was $177.2 million in 2021, $198.3 million in 2020, and $170.9 million in 2019. At December 31, 2021, the aggregate intrinsic value of in-the-money options outstanding was $352.3 million, all outstanding options are exercisable.

EFFECT OF SPECIAL CASH DIVIDEND.

As a result of the special cash dividend declared by the Board of Directors in June 2021, the anti-dilution provisions of our employee long-term incentive plans and non-employee director plans (collectively, the LTI plans) require an automatic adjustment to neutralize the effect of the special cash dividend. On the special cash dividend’s ex-dividend date (June 24, 2021), the number of shares authorized and the number of stock options outstanding and their exercise price were adjusted resulting in an increase of 50,607 stock options outstanding on the ex-dividend date, and no incremental compensation expense. In the table above, the number of options outstanding at December 31, 2020 was updated to reflect this adjustment.

RESTRICTED SHARES AND STOCK UNITS.

The following table summarizes the status of, and changes in, our nonvested restricted shares and restricted stock units during 2021.


	Restricted shares	Restricted stock units	Weighted- average fair value
Nonvested at December 31, 2020	7,412	6,367,059	$	116.51
Time-based grants	5,720	1,596,036	$	203.87
Performance-based grants	—	66,845	$	204.22
Vested (value at vest date was $426.6 million)	(7,412)	(2,154,853)	$	104.05
Nonvested dividend equivalents granted to non-employee directors	—	3,515	$	193.49
Forfeited	—	(176,737)	$	117.24
Nonvested at December 31, 2021	5,720	5,701,865	$	146.87

Nonvested at December 31, 2021 includes performance-based restricted stock units of 346,081. These nonvested performance-based restricted units include 132,686 units for which the performance period has lapsed, and the performance threshold has been met.

Compensation and related costs includes expenses for restricted shares and restricted stock units of $274.6 million in 2021, $244.1 million in 2020, and $201.5 million in 2019.

At December 31, 2021, non-employee directors held 93,530 vested stock units that will convert to common shares upon their separation from the Board.

FUTURE STOCK-BASED COMPENSATION EXPENSE.

The following table presents the compensation expense to be recognized over the remaining vesting periods of the stock-based awards outstanding at December 31, 2021. Estimated future compensation expense will change to reflect future grants, changes in the probability of performance thresholds being met, and adjustments for actual forfeitures.


(in millions)
First quarter 2022	$	67.4
Second quarter 2022	64.6
Third quarter 2022	63.7
Fourth quarter 2022	54.9
Total 2022	250.6
2023 through 2027	232.6
Total	$	483.2