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Share-based Compensation | 12 Months Ended
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Dec. 31, 2022
Share-based Payment Arrangement [Abstract] |
Share-based Compensation |
Share-based Compensation
The Company maintains a share-based compensation plan, which authorizes the granting of various equity-based incentives including stock options and RSUs to employees and nonemployee directors. The number of shares of common stock reserved for issuance under the plan was 34.4 million at December 31, 2022, including 21.8 million available for future grants. Share-based compensation expense and the effect on diluted earnings per common share were as follows:
In millions, except per share data | 2022 |  | 2021 |  | 2020
Share-based compensation expense | $ | 166.7 |  |  | $ | 139.2 |  |  | $ | 92.4 |
After tax | $ | 145.9 |  |  | $ | 120.4 |  |  | $ | 78.3 |
Earnings per common share-diluted | $ | 0.20 |  |  | $ | 0.16 |  |  | $ | 0.10 |
As of December 31, 2022, there was $161.1 million of total unrecognized compensation cost related to nonvested share-based compensation that is expected to be recognized over a weighted-average period of 2.0 years. STOCK OPTIONS Stock options to purchase common stock are granted with an exercise price equal to the closing market price of the Company’s stock on the date of grant. Substantially all of the options become exercisable in four equal installments, beginning a year from the date of the grant, and generally expire 10 years from the grant date. The following table presents the weighted-average assumptions used in the option pricing model for the 2022, 2021 and 2020 stock option grants. The expected life of the options represents the period of time the options are expected to be outstanding and is based on historical trends. Expected stock price volatility is generally based on the historical volatility of the Company’s stock for a period approximating the expected life. The expected dividend yield is based on the Company’s most recent annual dividend rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with a term equal to the expected life. Weighted-average assumptions
| 2022 | 2021 | 2020
Expected dividend yield | 2.2 | % | 2.4 | % | 2.3 | %
Expected stock price volatility | 21.3 | % | 21.8 | % | 19.1 | %
Risk-free interest rate | 1.9 | % | 0.7 | % | 1.4 | %
Expected life of options (in years) | 5.7 | 5.7 | 5.7
Fair value per option granted | $ | 42.12 |  | $ | 30.91 |  | $ | 29.40 |
Intrinsic value for stock options is defined as the difference between the current market value of the Company’s stock and the exercise price. During 2022, 2021 and 2020, the total intrinsic value of stock options exercised was $242.2 million, $302.0 million and $290.4 million, respectively. Cash received from stock options exercised during 2022 was $248.2 million and the tax benefit realized from stock options exercised totaled $48.3 million. The Company uses treasury shares purchased under the Company’s share repurchase program to satisfy share-based exercises. A summary of the status of the Company’s stock option grants as of December 31, 2022, 2021 and 2020, and changes during the years then ended, is presented in the following table:
| 2022 |  | 2021 |  | 2020
Options | Shares in millions |  | Weighted- average exercise price |  | Weighted- average remaining contractual life in years |  | Aggregate intrinsic value in millions |  | Shares in millions |  | Weighted- average exercise price |  | Shares in millions |  | Weighted- average exercise price
Outstanding at beginning of year | 12.0 |  |  |  | $ | 156.13 |  |  |  |  |  |  |  | 13.4 |  |  |  | $ | 139.44 |  |  | 14.6 |  |  |  | $ | 124.21 |
Granted | 1.6 |  |  |  | 252.97 |  |  |  |  |  |  |  | 2.1 |  |  |  | 215.73 |  |  | 1.8 |  |  |  | 214.18 |
Exercised | (1.9) |  |  |  | 128.08 |  |  |  |  |  |  |  | (2.4) |  |  |  | 115.29 |  |  | (2.8) |  |  |  | 104.58 |
Forfeited/expired | (0.3) |  |  |  | 225.93 |  |  |  |  |  |  |  | (1.1) |  |  |  | 160.50 |  |  | (0.2) |  |  |  | 184.69 |
Outstanding at end of year | 11.4 |  |  |  | $ | 172.27 |  |  | 5.6 |  |  | $ | 1,041.6 |  |  | 12.0 |  |  |  | $ | 156.13 |  |  | 13.4 |  |  |  | $ | 139.44 |
Exercisable at end of year | 7.7 |  |  |  | $ | 145.87 |  |  | 4.4 |  |  | $ | 904.2 |  |  | 7.8 |  |  |  |  |  | 8.8 |  |  |  |
RSUs RSUs generally vest 100% on the third anniversary of the grant and are payable in either shares of the Company’s common stock or cash, at the Company’s discretion. The fair value of each RSU granted is equal to the market price of the Company’s stock at date of grant. Separately, Company officers have been awarded RSUs that vest based on Company performance. For performance-based RSUs, the Company includes a relative TSR modifier to determine the number of shares earned at the end of the performance period. The fair value of performance-based RSUs that include the TSR modifier is determined using a Monte Carlo valuation model. A summary of the Company’s RSU activity during the years ended December 31, 2022, 2021 and 2020 is presented in the following table:
| 2022 |  | 2021 |  | 2020
RSUs | Shares in millions |  | Weighted- average grant date fair value |  | Shares in millions |  | Weighted- average grant date fair value |  | Shares in millions |  | Weighted- average grant date fair value
Nonvested at beginning of year | 1.3 |  |  |  | $ | 197.10 |  |  | 1.3 |  |  |  | $ | 176.81 |  |  | 1.4 |  |  |  | $ | 150.95 |
Granted | 0.5 |  |  |  | 242.82 |  |  | 0.6 |  |  |  | 206.92 |  |  | 0.6 |  |  |  | 201.92 |
Vested | (0.4) |  |  |  | 173.31 |  |  | (0.4) |  |  |  | 153.55 |  |  | (0.6) |  |  |  | 127.99 |
Forfeited | (0.2) |  |  |  | 205.61 |  |  | (0.2) |  |  |  | 168.38 |  |  | (0.1) |  |  |  | 172.45 |
Nonvested at end of year | 1.2 |  |  |  | $ | 222.32 |  |  | 1.3 |  |  |  | $ | 197.10 |  |  | 1.3 |  |  |  | $ | 176.81 |
The total fair value of RSUs vested during 2022, 2021 and 2020 was $110.3 million, $80.0 million and $119.4 million, respectively. The tax benefit realized from RSUs vested during 2022 was $18.5 million.

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