Stock Plans

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

In 2020, the Board of Directors adopted, and shareholders approved, the Altria Group, Inc. 2020 Performance Incentive Plan (the “2020 Plan”). The 2020 Plan succeeded the 2015 Performance Incentive Plan, under which no new awards were permitted to be made after May 31, 2020. Under the 2020 Plan, Altria may grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance stock units (“PSUs”) and other stock-based awards, as well as cash-based annual and long-term incentive awards to employees of Altria or any of its subsidiaries or affiliates. Any awards granted pursuant to the 2020 Plan may be in the form of performance-based awards, including PSUs subject to the achievement or satisfaction of performance goals and performance cycles. Up to 25 million shares of common stock may be issued under the 2020 Plan. In addition, under the 2015 Stock Compensation Plan for Non-Employee Directors (the “Directors Plan”), Altria may grant up to one million shares of common stock to members of the Board of Directors who are not employees of Altria.

Shares available to be granted under the 2020 Plan and the Directors Plan at December 31, 2020, were 24,827,160 and 759,234, respectively.

▪RSUs: During the vesting period, RSUs include nonforfeitable rights to dividends or dividend equivalents and may not be sold, assigned, pledged or otherwise encumbered. RSUs are subject to forfeiture if certain employment conditions are not met. Altria estimates the number of awards expected to be forfeited and adjusts this estimate when subsequent information indicates that the actual number of forfeitures is likely to differ from previous estimates. RSUs generally vest three years after the grant date.

The fair value of the RSUs at the date of grant, net of estimated forfeitures, is amortized to expense ratably over the restriction period, which is generally three years. Altria recorded pre-tax compensation expense related to RSUs for the years ended December 31, 2020, 2019 and 2018 of $31 million, $28 million and $39 million, respectively. The deferred tax benefit recorded related to this compensation expense was $8 million, $7 million and $9 million for the years ended December 31, 2020, 2019 and 2018, respectively. The unamortized compensation expense related to RSUs was $54 million at December 31, 2020 and is expected to be recognized over a weighted-average period of approximately two years.

RSU activity was as follows for the year ended December 31, 2020:


	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
Balance at December 31, 2019	1,909,642	$	61.46
Granted	1,162,118	$	42.59
Vested	(542,331)	$	66.22
Forfeited	(290,050)	$	51.91
Balance at December 31, 2020	2,239,379	$	51.76

The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2020, 2019 and 2018 was $49 million, $37 million and $60 million, respectively, or $42.59, $52.03 and $67.17 per RSU, respectively. The total vesting date fair value of restricted stock and RSUs that vested during the years ended December 31, 2020, 2019 and 2018 was $25 million, $30 million and $65 million, respectively.

▪PSUs: Altria granted an aggregate of 275,288, 181,409 and 177,338 of PSUs during 2020, 2019 and 2018, respectively. The payout of the PSUs is based on the achievement of certain performance measures over the three-year performance period. For the 2020 grant, these performance measures consist of Altria’s adjusted diluted earnings per share compounded annual growth rate and a cash conversion measure for Altria. Additionally, the payout resulting from the performance measures is then adjusted up or down by a total shareholder return (“TSR”) performance multiplier, which depends on Altria’s relative TSR to a predetermined peer group. For the

2019 and 2018 grants, the performance measures consist of Altria’s adjusted diluted earnings per share compounded annual growth rate and Altria’s TSR relative to a predetermined peer group. PSUs are subject to forfeiture if certain employment conditions are not met. At December 31, 2020, Altria had 409,392 PSUs outstanding, with a weighted-average grant date fair value of $49.63 per PSU. The fair value of PSUs at the date of grant, net of estimated forfeitures, is amortized to expense over the performance period. Altria recorded pre-tax compensation expense related to PSUs for the years ended December 31, 2020, 2019 and 2018 of $4 million, $4 million and $7 million, respectively. The unamortized compensation expense related to PSUs was $9 million at December 31, 2020.