Stock Plans

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Note 12. Stock Plans

Under our Amended and Restated 2005 Performance Incentive Plan (the “2005 Plan”), we are authorized through May 21, 2024 to issue a maximum of 243.7 million shares of our Class A common stock (“Common Stock”) to employees and non-employee directors. As of December 31, 2023, there were 41.5 million shares available to be granted under the 2005 Plan.

Stock Options

We recorded compensation expense related to stock options held by our employees of $25 million in 2023, $20 million in 2022 and $23 million in 2021 in our results from continuing operations. The deferred tax benefit recorded related to this compensation expense was $4 million in 2023, $3 million in 2022 and $4 million in 2021. The unamortized compensation expense related to our employee stock options was $26 million at December 31, 2023 and is expected to be recognized over a weighted-average period of 1.7 years.

Our weighted-average Black-Scholes Model fair value assumptions were:


	Risk-Free Interest Rate	Expected Life	Expected Volatility	Expected Dividend Yield	Fair Value at Grant Date
2023	4.18%	5 years	20.97%	2.32%	$13.57
2022	1.87%	5 years	22.05%	2.13%	$11.24
2021	0.57%	5 years	23.45%	2.20%	$9.08

The risk-free interest rate represents the constant maturity U.S. government treasuries rate with a remaining term equal to the expected life of the options. The expected life is the period over which our employees are expected to hold their options. Volatility reflects historical movements in our stock price for a period commensurate with the expected life of the options. The dividend yield reflects the dividend yield in place at the time of the historical grants.

Stock option activity is reflected below:


	Shares Subject to Option	Weighted- Average Exercise or Grant Price Per Share		Average Remaining Contractual Term	Aggregate Intrinsic Value
Balance at January 1, 2021	27,751,894	$	39.51		$	527	million
Annual grant to eligible employees	2,412,710	56.13
Additional options issued	160,640	58.17
Total options granted	2,573,350	56.26
Options exercised (1)	(6,249,330)	33.68			$	169	million
Options cancelled	(572,155)	49.65
Balance at December 31, 2021	23,503,759	42.65			$	556	million
Annual grant to eligible employees	2,180,540	64.65
Additional options issued	63,490	64.39
Total options granted	2,244,030	64.64
Options exercised (1)	(4,780,086)	35.96			$	142	million
Options cancelled	(477,453)	55.89
Balance at December 31, 2022	20,490,250	46.31			$	417	million
Annual grant to eligible employees	2,452,110	65.36
Additional options issued	24,210	68.93
Total options granted	2,476,320	65.39
Options exercised (1)	(3,894,213)	39.59			$	123	million
Options cancelled	(394,237)	59.41
Balance at December 31, 2023	18,678,120	49.96		5 years	$	420	million
Exercisable at December 31, 2023	14,500,549	45.98		4 years	$	384	million

(1)Cash received from options exercised was $152 million in 2023, $158 million in 2022 and $206 million in 2021. The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $21 million in 2023, $22 million in 2022 and $24 million in 2021.

Deferred Stock Units, Performance Share Units and Other Stock-Based Awards

We recorded compensation expense related to DSUs, PSUs and other stock-based awards of $121 million in 2023, $100 million in 2022 and $98 million in 2021 in our results from continuing operations. The deferred tax benefit recorded related to this compensation expense was $18 million in 2023, $17 million in 2022 and $16 million in 2021. The unamortized compensation expense related to our DSUs, PSUs and other stock-based awards was $146 million at December 31, 2023 and is expected to be recognized over a weighted-average period of 1.7 years.

Our PSU, DSU and other stock-based award activity is reflected below:


	Number of Shares	Grant Date	Weighted-Average Fair Value Per Share (4)		Weighted-Average Aggregate Fair Value (3)
Balance at January 1, 2021	4,896,990		$	53.80
Annual grant to eligible employees:		Feb 18, 2021
Performance share units	903,250		59.35
Deferred stock units	550,090		56.13
Additional shares granted (1)	1,163,644	Various	53.76
Total shares granted	2,616,984		56.19		$	147	million
Vested (2) (3)	(2,459,427)		49.59		$	122	million
Forfeited (2)	(386,501)		57.52
Balance at December 31, 2021	4,668,046		57.04
Annual grant to eligible employees:		Feb 24, 2022
Performance share units	806,590		61.87
Deferred stock units	505,090		64.65
Additional shares granted (1)	836,117	Various	59.37
Total shares granted	2,147,797		61.55		$	132	million
Vested (2) (3)	(1,925,556)		54.13		$	104	million
Forfeited (2)	(438,613)		60.68
Balance at December 31, 2022	4,451,674		60.12
Annual grant to eligible employees:		Mar 2, 2023
Performance share units	895,410		68.59
Deferred stock units	578,570		65.36
Additional shares granted (1)	765,128	Various	65.99
Total shares granted	2,239,108		66.86		$	150	million
Vested (2) (3)	(1,772,439)		61.92		$	110	million
Forfeited (2)	(365,177)		62.66
Balance at December 31, 2023	4,553,166		62.53

(1)Includes PSUs and DSUs.

(2)Includes PSUs, DSUs and other stock-based awards.

(3)The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled $3 million in 2023, $5 million in 2022 and $6 million in 2021.

(4)The grant date fair value of PSUs is determined based on the Monte Carlo simulation model for the market-based total shareholder return component and the closing market price of the Company’s stock on the grant date for performance-based components. The Monte Carlo simulation model incorporates the probability of achieving the total shareholder return market condition. Compensation expense is recognized using the grant date fair values regardless of whether the market condition is achieved, so long as the requisite service has been provided.