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Share-based Compensation | 12 Months Ended
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Sep. 30, 2022
Share-Based Payment Arrangement, Noncash Expense [Abstract] |
Share-based Compensation | Note 17—Share-based Compensation 2007 Equity Incentive Compensation Plan The Company’s 2007 Equity Incentive Compensation Plan, or the EIP, authorizes the compensation committee of the board of directors to grant non-qualified stock options (options), RSUs, performance-based shares and restricted stock awards to its employees and non-employee directors. On January 26, 2021, the EIP was amended to extend the termination date from January 31, 2022 to January 26, 2031 and reduce the number of shares of class A common stock authorized for grant from 236 million to 198 million. Shares available for grant may be either authorized and unissued or previously issued shares subsequently acquired by the Company. Under the amended EIP, shares withheld for taxes, or shares used to pay the exercise or purchase price of an award, shall not again be available for future grant. The EIP will continue to be in effect until all of the common stock available under the EIP is delivered and all restrictions on those shares have lapsed, unless the EIP is terminated earlier by the Company’s board of directors. For fiscal 2022, 2021 and 2020, the Company recorded share-based compensation cost related to the EIP of $571 million, $518 million and $393 million, respectively, in personnel expense on its consolidated statements of operations. The related tax benefits for fiscal 2022, 2021 and 2020 were $82 million, $73 million and $63 million, respectively. Options Options issued under the EIP expire 10 years from the date of grant and primarily vest ratably over 3 years from the date of grant, subject to earlier vesting in full under certain conditions. The fair value of each stock option was estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:
| For the Years Ended September 30,
| 2022 |  | 2021 |  | 2020
Expected term (in years)(1) | 4.11 |  | 4.07 |  | 4.03
Risk-free rate of return(2) | 1.1 | % |  | 0.3 | % |  | 1.6 | %
Expected volatility(3) | 27.1 | % |  | 25.1 | % |  | 18.7 | %
Expected dividend yield(4) | 0.7 | % |  | 0.6 | % |  | 0.7 | %
Fair value per option granted | $ | 43.16 |  | $ | 39.51 |  | $ | 29.37
(1)Based on Visa’s historical exercise experience. (2)Based on the zero-coupon U.S. Treasury constant maturity yield curve, continuously compounded over the expected term of the awards. (3)Based on the Company’s implied and historical volatilities. (4)Based on the Company’s annual dividend rate on the date of grant. The following table summarizes the Company’s option activity:
| Options |  | Weighted- Average Exercise Price Per Share |  | Weighted- Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value(1) (in millions)
Outstanding at September 30, 2021 | 5,839,779 |  |  | $ | 134.56 |  |  |  |  |
Granted | 961,570 |  |  | $ | 200.86 |  |  |  |  |
Forfeited | (134,247) |  |  | $ | 199.34 |  |  |  |  |
Expired | (1,264) |  |  | $ | 207.57 |  |  |  |  |
Exercised | (497,214) |  |  | $ | 104.15 |  |  |  |  |
Outstanding at September 30, 2022 | 6,168,624 |  |  | $ | 145.92 |  |  | 6.09 |  | $ | 250 |
Options exercisable at September 30, 2022 | 4,299,455 |  |  | $ | 122.49 |  |  | 5.14 |  | $ | 250 |
Options exercisable and expected to vest at September 30, 2022(2) | 6,122,504 |  |  | $ | 145.50 |  |  | 6.07 |  | $ | 250 |
(1)Calculated using the closing stock price on the last trading day of fiscal 2022 of $177.65, less the option exercise price, multiplied by the number of instruments. (2)Applied a forfeiture rate to unvested options outstanding at September 30, 2022 to estimate the options expected to vest in the future. During fiscal 2022, 2021 and 2020, the total intrinsic value of options exercised was $56 million, $124 million and $146 million, respectively, and the tax benefit realized was $11 million, $23 million and $31 million, respectively. As of September 30, 2022, there was $22 million of total unrecognized compensation cost related to unvested options, which is expected to be recognized over a weighted-average period of approximately 0.38 year. Restricted Stock Units RSUs issued under the EIP primarily vest ratably over 3 years from the date of grant, subject to earlier vesting in full under certain conditions. Upon vesting, RSUs can be settled in class A common stock on a one-for-one basis or in cash, or a combination thereof, at the Company’s option. The Company does not currently intend to settle any RSUs in cash. During the vesting period, RSU award recipients are eligible to receive dividend equivalents, but do not participate in the voting rights granted to the holders of the underlying class A common stock. The fair value and compensation cost before estimated forfeitures for RSUs is calculated using the closing price of class A common stock on the date of grant. During fiscal 2022, 2021 and 2020, the weighted-average grant date fair value of RSUs granted was $204.73, $209.00 and $183.61, respectively. During fiscal 2022, 2021 and 2020, the total grant date fair value of RSUs vested was $380 million, $331 million and $284 million, respectively. The following table summarizes the Company’s RSU activity:
| Units |  | Weighted- Average Grant Date Fair Value |  | Weighted- Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value(1) (in millions)
Outstanding at September 30, 2021 | 4,526,448 |  |  | $ | 188.16 |  |  |  |  |
Granted | 3,967,313 |  |  | $ | 204.73 |  |  |  |  |
Vested | (2,166,662) |  |  | $ | 175.23 |  |  |  |  |
Forfeited | (532,779) |  |  | $ | 200.24 |  |  |  |  |
Outstanding at September 30, 2022 | 5,794,320 |  |  | $ | 203.23 |  |  | 1.07 |  | $ | 1,029 |
(1)Calculated by multiplying the closing stock price on the last trading day of fiscal 2022 of $177.65 by the number of instruments. At September 30, 2022, there was $692 million of total unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately 1.07 years. Performance-based Shares For the Company’s performance-based shares, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of both performance and market conditions. The performance condition is based on the Company’s earnings per share target. The market condition is based on the Company’s total shareholder return ranked against that of other companies that are included in the Standard & Poor’s 500 Index. The fair value of each performance-based shares incorporating the market condition was estimated on the date of grant using a Monte Carlo simulation model with the following weighted-average assumptions:
| For the Years Ended September 30,
| 2022 |  | 2021 |  | 2020
Expected term (in years) | 2.05 |  | 2.00 |  | 1.90
Risk-free rate of return(1) | 0.5 | % |  | 0.2 | % |  | 1.6 | %
Expected volatility(2) | 28.3 | % |  | 27.2 | % |  | 20.9 | %
Expected dividend yield(3) | 0.8 | % |  | 0.6 | % |  | 0.7 | %
Fair value per performance-based share granted | $ | 186.50 |  | $ | 229.81 |  | $ | 211.08
(1)Based on the zero-coupon U.S. treasury constant maturity yield curve, continuously compounded over the expected term of the awards (2)Based on the Company’s implied and historical volatilities. (3)Based on the Company’s annual dividend rate on the date of grant. Performance-based shares vest over three years and are subject to earlier vesting in full under certain conditions. During fiscal 2022, 2021 and 2020, the total grant date fair value of performance-based shares vested and earned was $49 million, $47 million and $65 million, respectively. Compensation cost for performance-based shares is initially estimated based on target performance. It is recorded net of estimated forfeitures and adjusted as appropriate throughout the performance period. The following table summarizes the maximum number of performance-based shares which could be earned and related activity:
| Shares |  | Weighted- Average Grant Date Fair Value |  | Weighted- Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value(1) (in millions)
Outstanding at September 30, 2021 | 863,860 |  |  | $ | 204.82 |  |  |  |  |
Granted(2) | 440,722 |  |  | $ | 186.50 |  |  |  |  |
Vested and earned | (245,922) |  |  | $ | 200.90 |  |  |  |  |
Unearned | (200,800) |  |  | $ | 190.43 |  |  |  |  |
Forfeited | (23,664) |  |  | $ | 199.20 |  |  |  |  |
Outstanding at September 30, 2022 | 834,196 |  |  | $ | 199.92 |  |  | 0.89 |  | $ | 148 |
(1)Calculated by multiplying the closing stock price on the last trading day of fiscal 2022 of $177.65 by the number of instruments. (2)Represents the maximum number of performance-based shares which could be earned. At September 30, 2022, there was $39 million of total unrecognized compensation cost related to unvested performance-based shares, which is expected to be recognized over a weighted-average period of approximately 0.89 year. Employee Stock Purchase Plan The Visa Inc. Employee Stock Purchase Plan (ESPP) permits eligible employees to purchase the Company’s class A common stock at a 15% discount of the stock price on the purchase date, subject to certain restrictions. A total of 20 million shares of class A common stock have been reserved for issuance under the ESPP. In fiscal 2022, 2021 and 2020, the ESPP did not have a material impact on the consolidated financial statements.

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