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Stock Benefit Plans | 12 Months Ended
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Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock Benefit Plans | Stock Benefit Plans The Company maintains multiple stock-based payment arrangements under which employees are awarded grants of restricted stock units, stock options and other forms of stock-based benefits. Marsh & McLennan Companies, Inc. Incentive and Stock Award Plans On May 19, 2011, the Marsh & McLennan Companies, Inc. 2011 Incentive and Stock Award Plan (the "2011 Plan") was approved by the Company's stockholders. The 2011 Plan replaced the Company's two previous equity incentive plans (the 2000 Senior Executive Incentive and Stock Award Plan and the 2000 Employee Incentive and Stock Award Plan). The types of awards permitted under the 2011 Plan include stock options, restricted stock and restricted stock units payable in Company common stock or cash, and other stock-based and performance-based awards. The Compensation Committee of the Board of Directors (the "Compensation Committee") determines, at its discretion, which affiliates may participate in the 2011 Plan, which eligible employees will receive awards, the types of awards to be received, and the terms and conditions thereof. The right of an employee to receive an award may be subject to performance conditions as specified by the Compensation Committee. The 2011 Plan contains a provision which, in the event of a change in control of the Company, may accelerate the vesting of the awards. This provision requires both a change in control of the Company and a subsequent specified termination of employment for vesting to be accelerated. The 2011 Plan retains the remaining share authority of the two previous plans as of the date the 2011 Plan was approved by stockholders. Thus, approximately 23.2 million shares of common stock, plus shares remaining unused under the previous plans, are available for awards over the life of the 2011 Plan. The current practice is to grant non-qualified stock options, restricted stock units and/or performance stock units ("PSUs") on an annual basis to senior executives and a limited number of other employees as part of their total compensation. Restricted stock units are also granted to new hires or as retention awards for certain employees. Restricted stock has not been granted since 2005. Stock Options: Options granted under the 2011 Plan may be designated as either incentive stock options or non-qualified stock options. The Compensation Committee determines the terms and conditions of the option, including the time or times at which an option may be exercised, the methods by which such exercise price may be paid, and the form of such payment. Options are generally granted with an exercise price equal to the market value of the Company's common stock on the date of grant. These option awards generally vest 25% per annum and have a contractual term of 10 years. The estimated fair value of options granted is calculated using the Black-Scholes option pricing valuation model. This model takes into account several factors and assumptions. The risk-free interest rate is based on the yield on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumption at the time of grant. The expected life (estimated period of time outstanding) is estimated using the contractual term of the option and the effects of employees' expected exercise and post-vesting employment termination behavior. The Company uses a blended volatility rate based on the following: (i) volatility derived from daily closing price observations for the 10-year period ended on the valuation date, (ii) implied volatility derived from traded options for the period one week before the valuation date and (iii) average volatility for the 10-year periods ended on 15 anniversaries prior to the valuation date, using daily closing price observations. The expected dividend yield is based on expected dividends for the expected term of the stock options. The assumptions used in the Black-Scholes option pricing valuation model for options granted by the Company in 2018, 2017 and 2016 are as follows:
| 2018 |  | 2017 |  | 2016
Risk-free interest rate | 2.73 | % |  | 2.09 | % |  | 1.39 | %
Expected life (in years) | 6.0 |  |  | 6.0 |  |  | 6.0 |
Expected volatility | 23.23 | % |  | 23.23 | % |  | 25.55 | %
Expected dividend yield | 1.81 | % |  | 1.86 | % |  | 2.15 | %
A summary of the status of the Company’s stock option awards as of December 31, 2018 and changes during the year then ended is presented below:
| Shares |  |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value ($000)
Balance at January 1, 2018 | 10,200,702 |  |  | $ | 47.39 |  |  |  |  |
Granted | 1,381,391 |  |  | $ | 83.05 |  |  |  |  |
Exercised | (1,452,879 | ) |  | $ | 33.92 |  |  |  |  |
Forfeited | (161,176 | ) |  | $ | 69.64 |  |  |  |  |
Balance at December 31, 2018 | 9,968,038 |  |  | $ | 53.94 |  |  | 5.8 years |  | $ | 258,062 |
Options vested or expected to vest at December 31, 2018 | 9,830,816 |  |  | 53.72 |  |  | 5.8 years |  | 256,622 |
Options exercisable at December 31, 2018 | 6,321,055 |  |  | $ | 43.78 |  |  | 4.5 years |  | $ | 224,687 |
In the above table, forfeited options are unvested options whose requisite service period has not been met. Expired options are vested options that were not exercised. The weighted-average grant-date fair value of the Company's option awards granted during the years ended December 31, 2018, 2017 and 2016 was $18.29, $15.01 and $11.57, respectively. The total intrinsic value of options exercised during the same periods was $72.9 million, $195.3 million and $137.7 million, respectively. As of December 31, 2018, there was $17 million of unrecognized compensation cost related to the Company's option awards. The weighted-average period over which that cost is expected to be recognized is approximately 1.24 years. Cash received from the exercise of stock options for the years ended December 31, 2018, 2017 and 2016 was $46.7 million, $126.7 million and $105.4 million, respectively. The Company's policy is to issue treasury shares upon option exercises or share unit conversion. The Company intends to issue treasury shares as long as an adequate number of those shares is available. Restricted Stock Units and Performance Stock Units: Restricted stock units may be awarded under the Company's 2011 Incentive and Stock Award Plan. The Compensation Committee determines the restrictions on such units, when the restrictions lapse, when the units vest and are paid, and under what terms the units are forfeited. The cost of these awards is amortized over the vesting period, which is generally three years. Awards to senior executives and other employees may include three-year performance-based restricted stock units and three-year service-based restricted stock units. The payout of performance stock units (payable in shares of the Company's common stock) ranges, generally, from 0-200% of the number of units granted, based on the achievement of objective, pre-determined Company performance measure(s), generally, over a three-year performance period. The Company accounts for these awards as performance condition restricted stock units. The performance condition is not considered in the determination of grant date fair value of such awards. Compensation cost is recognized over the performance period based on management's estimate of the number of units expected to vest and shares to be paid and is adjusted to reflect the actual number of shares paid out at the end of the three-year performance period. Dividend equivalents are not paid out unless and until such time that the award vests. A summary of the status of the Company's restricted stock units and performance stock units as of December 31, 2018 and changes during the period then ended is presented below:
| Restricted Stock Units |  | Performance Stock Units
| Shares |  | Weighted Average Grant Date Fair Value |  |  | Shares |  | Weighted Average Grant Date Fair Value |
Non-vested balance at January 1, 2018 | 4,052,747 |  | $ | 66.97 |  |  | 690,601 |  | $ | 62.82 |
Granted | 2,390,859 |  | $ | 83.05 |  |  | 225,736 |  | $ | 83.05 |
Vested | (1,796,343 | ) | $ | 64.22 |  |  | (173,978 | ) | $ | 57.33 |
Forfeited | (317,032 | ) | $ | 73.81 |  |  | (43,561 | ) | $ | 69.20 |
Non-vested balance at December 31, 2018 | 4,330,231 |  | $ | 76.49 |  |  | 698,798 |  | $ | 70.33 |
The weighted-average grant-date fair value of the Company's restricted stock units granted during the years ended December 31, 2017 and 2016 was $73.23 and $57.54, respectively. The weighted average grant date fair value of the Company's performance stock units granted during the years ended December 31, 2017 and 2016 was $73.20 and $57.47, respectively. The total fair value of the shares distributed during the years ended December 31, 2018, 2017 and 2016 in connection with the Company's non-option equity awards was $170.3 million, $117.1 million and $91.4 million, respectively. The payout of shares in 2018 with respect to the PSUs awarded in 2015 was 117% of target based on performance for the three-year performance period. In aggregate, 203,590 shares became distributable in respect to PSUs vested in 2018. As of December 31, 2018, there was $238.9 million of unrecognized compensation cost related to the Company's restricted stock units and performance stock unit awards. The weighted-average period over which that cost is expected to be recognized is approximately 1.02 years. Marsh & McLennan Companies Stock Purchase Plans In May 1999, the Company's stockholders approved an employee stock purchase plan (the "1999 Plan") to replace the 1994 Employee Stock Purchase Plan (the "1994 Plan"), which terminated on September 30, 1999 following its fifth annual offering. Under the current terms of the Plan, shares are purchased four times during the plan year at a price that is 95% of the average market price on each quarterly purchase date. Under the 1999 Plan, after including the available remaining unused shares in the 1994 Plan and reducing the shares available by 10,000,000 consistent with the Company's Board of Directors' action in March 2007 and the addition of 4,750,000 shares due to a shareholder action in May 2018, no more than 40,350,000 shares of the Company's common stock may be sold. Employees purchased 424,631 shares during the year ended December 31, 2018 and at December 31, 2018, 5,678,536 shares were available for issuance under the 1999 Plan. Under the 1995 Company Stock Purchase Plan for International Employees (the "International Plan"), after reflecting the additional 5,000,000 shares of common stock for issuance approved by the Company's Board of Directors in July 2002, the addition of 4,000,000 shares due to a shareholder action in May 2007 and reducing the shares available by 1,000,000 consistent with the Company's Board of Directors' action in March 2018, no more than 11,000,000 shares of the Company's common stock may be sold. Employees purchased 117,175 shares during the year ended December 31, 2018 and there were 1,374,735 shares available for issuance at December 31, 2018 under the International Plan. The plans are considered non-compensatory.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + 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 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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