We grant stock-based compensation to employees and directors. As of June 30, 2021, an aggregate of 251 million shares were authorized for future grant under our stock plans. Awards that expire or are canceled without delivery of shares generally become available for issuance under the plans. We issue new shares of Microsoft common stock to satisfy vesting of awards granted under our stock plans. We also have an ESPP for all eligible employees.

Stock-based compensation expense and related income tax benefits were as follows:

(In millions)


Year Ended June 30,	2021		2020		2019

Stock-based compensation expense	$	6,118	$	5,289	$	4,652
Income tax benefits related to stock-based compensation		1,065		938		816

Stock awards entitle the holder to receive shares of Microsoft common stock as the award vests. Stock awards generally vest over a service period of four years or five years.

Under the Executive Incentive Plan, the Compensation Committee approves stock awards to executive officers and certain senior executives. RSUs generally vest ratably over a service period of four years. PSUs generally vest over a performance period of three years. The number of shares the PSU holder receives is based on the extent to which the corresponding performance goals have been achieved.

The fair value of stock awards was estimated on the date of grant using the following assumptions:



Year ended June 30,				2021				2020				2019



Dividends per share (quarterly amounts)	$	0.51	–	0.56	$	0.46	–	0.51	$	0.42	–	0.46
Interest rates		0.01%	–	1.5%		0.1%	–	2.2%		1.8%	–	3.1%

Shares			Weighted Average Grant-Date Fair Value


(In millions)

Stock Awards

Nonvested balance, beginning of year	126		$	105.23
Granted ^(a)	40			221.13
Vested	(58	)		99.41
Forfeited	(8	)		129.92


Nonvested balance, end of year	100		$	152.51

As of June 30, 2021, there was approximately $12.0 billion of total unrecognized compensation costs related to stock awards. These costs are expected to be recognized over a weighted average period of three years. The weighted average grant-date fair value of stock awards granted was $221.13, $140.49, and $107.02 for fiscal years 2021, 2020, and 2019, respectively. The fair value of stock awards vested was $13.4 billion, $10.1 billion, and $8.7 billion, for fiscal years 2021, 2020, and 2019, respectively.

We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. Under the terms of the ESPP that were approved in 2012, the plan will terminate on December 31, 2022. We intend to request shareholder approval for a successor ESPP with a January 1, 2022 effective date and ten-year expiration of December 31, 2031 at our 2021 Annual Shareholders Meeting. No additional shares will be requested at this meeting. Employees purchased the following shares during the periods presented:

(Shares in millions)


Year Ended June 30,	2021		2020		2019

Shares purchased		8		9		11
Average price per share	$	207.88	$	142.22	$	104.85

As of June 30, 2021, 88 million shares of our common stock were reserved for future issuance through the ESPP.

We have savings plans in the U.S. that qualify under Section 401(k) of the Internal Revenue Code, and a number of savings plans in international locations. Eligible U.S. employees may contribute a portion of their salary into the savings plans, subject to certain limitations. We contribute fifty cents for each dollar a participant contributes into the plans, with a maximum employer contribution of 50% of the IRS contribution limit for the calendar year. Employer-funded retirement benefits for all plans were $1.2 billion, $1.0 billion, and $877 million in fiscal years 2021, 2020, and 2019, respectively, and were expensed as contributed.