XML 52 R22.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Stock-Based Compensation | 12 Months Ended
--- | ---
Dec. 31, 2019
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation During 2019, 2018 and 2017, we recorded non-cash stock-based compensation expense totaling $189 million, $173 million and $158 million, which is included as a component of other unallocated, net on our consolidated statements of earnings. The net impact to earnings for the respective years was $149 million, $137 million and $103 million. As of December 31, 2019, we had $129 million of unrecognized compensation cost related to nonvested awards, which is expected to be recognized over a weighted average period of 1.8 years. We received cash from the exercise of stock options totaling $66 million, $43 million and $71 million during 2019, 2018 and 2017. In addition, our income tax liabilities for 2019, 2018 and 2017 were reduced by $103 million, $75 million and $203 million due to recognized tax benefits on stock-based compensation arrangements. Stock-Based Compensation Plans Under plans approved by our stockholders, we are authorized to grant key employees stock-based incentive awards, including options to purchase common stock, stock appreciation rights, RSUs, PSUs or other stock units. The exercise price of options to purchase common stock may not be less than the fair market value of our stock on the date of grant. No award of stock options may become fully vested prior to the third anniversary of the grant and no portion of a stock option grant may become vested in less than one year. The minimum vesting period for restricted stock or stock units payable in stock is three years. Award agreements may provide for shorter or pro-rated vesting periods or vesting following termination of employment in the case of death, disability, divestiture, retirement, change of control or layoff. The maximum term of a stock option or any other award is 10 years. At December 31, 2019, inclusive of the shares reserved for outstanding stock options, RSUs and PSUs, we had approximately 7 million shares reserved for issuance under the plans. At December 31, 2019, approximately 4 million of the shares reserved for issuance remained available for grant under our stock-based compensation plans. We issue new shares upon the exercise of stock options or when restrictions on RSUs and PSUs have been satisfied. RSUs The following table summarizes activity related to nonvested RSUs:
|  | Number of RSUs (In thousands) |  | Weighted Average Grant-Date Fair Value Per Share
Nonvested at December 31, 2016 |  | 788 |  |  |  | $ | 183.00 |  |
Granted |  | 519 |  |  |  | 254.58 |  |
Vested |  | (624 | ) |  |  | 201.65 |  |
Forfeited |  | (32 | ) |  |  | 223.23 |  |
Nonvested at December 31, 2017 |  | 651 |  |  |  | $ | 220.21 |  |
Granted |  | 406 |  |  |  | 353.99 |  |
Vested |  | (470 | ) |  |  | 271.50 |  |
Forfeited |  | (24 | ) |  |  | 282.07 |  |
Nonvested at December 31, 2018 |  | 563 |  |  |  | $ | 271.23 |  |
Granted |  | 581 |  |  |  | 305.30 |  |
Vested |  | (523 | ) |  |  | 269.00 |  |
Forfeited |  | (21 | ) |  |  | 302.78 |  |
Nonvested at December 31, 2019 |  | 600 |  |  |  | $ | 305.06 |  |
In 2019, we granted certain employees approximately 0.6 million RSUs with a weighted average grant-date fair value of $305.30 per RSU. The grant-date fair value of these RSUs is equal to the closing market price of our common stock on the grant date less a discount to reflect the delay in payment of dividend-equivalent cash payments that are made only upon vesting, which is generally three years from the grant date. We recognize the grant-date fair value of RSUs, less estimated forfeitures, as compensation expense ratably over the requisite service period, which is shorter than the vesting period if the employee is retirement eligible on the date of grant or will become retirement eligible before the end of the vesting period. Stock Options We generally recognize compensation cost for stock options ratably over the three-year vesting period. At December 31, 2019 and 2018, there were 1.0 million (weighted average exercise price of $80.29) and 1.8 million (weighted average exercise price of $79.76) stock options outstanding. All of the stock options outstanding are vested as of December 31, 2019 and have a weighted average remaining contractual life of approximately 1.5 years and an aggregate intrinsic value of $296 million. There were 0.8 million (weighted average exercise price of $79.16) stock options exercised during 2019. We have not granted stock options to employees since 2012. The intrinsic value of all stock options exercised was $223 million, $104 million, and $139 million in 2019, 2018 and 2017. PSUs In 2019, we granted certain employees PSUs with an aggregate target award of approximately 0.1 million shares of our common stock. The PSUs vest three years from the grant date based on continuous service, with the number of shares earned (0% to 200% of the target award) depending upon the extent to which we achieve certain financial and market performance targets measured over the period from January 1, 2019 through December 31, 2021. About half of the PSUs were valued at $303.59 per PSU in a manner similar to RSUs mentioned above as the financial targets are based on our operating results. We recognize the grant-date fair value of these PSUs, less estimated forfeitures, as compensation expense ratably over the vesting period based on the number of awards expected to vest at each reporting date. The remaining PSUs were valued at $301.03 per PSU using a Monte Carlo model as the performance target is related to our total shareholder return relative to our peer group. We recognize the grant-date fair value of these awards, less estimated forfeitures, as compensation expense ratably over the vesting period.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration