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Preferred and Common Stock | 12 Months Ended
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Dec. 31, 2023
Equity [Abstract] |
Preferred and Common Stock | Preferred and Common Stock Preferred Stock. Howmet has two classes of preferred stock: $3.75 Cumulative Preferred Stock (“Class A Preferred Stock”) and Class B Serial Preferred Stock. Class A Preferred Stock has 660,000 shares authorized at a par value of $100 per share with an annual $3.75 cumulative dividend preference per share. There were 546,024 shares of Class A Preferred Stock outstanding as of both December 31, 2023 and 2022. Class B Serial Preferred Stock has 10,000,000 shares authorized at a par value of $1 per share. There were no shares of Class B Serial Preferred Stock outstanding as of both December 31, 2023 and 2022. Common Stock. As of December 31, 2023, there were 600,000,000 shares authorized at a par value of $1 per share, and 409,914,461 shares issued and outstanding. Dividends paid were $0.17 per share in 2023 ($0.04 per share in each of the first, second, and third quarters of 2023 and $0.05 per share in the fourth quarter of 2023), $0.10 per share in 2022 ($0.02 per share in each of the first, second, and third quarters of 2022 and $0.04 per share in the fourth quarter of 2022), and $0.04 per share in 2021 ($0.02 per share in each of the third and fourth quarters of 2021). As of December 31, 2023, 47 million shares of common stock were reserved for issuance under Howmet’s stock-based compensation plans. As of December 31, 2023, 26 million shares remain available for issuance. Howmet issues new shares to satisfy the exercise of stock options and the conversion of stock awards. Common Stock Outstanding and Share Activity (number of shares)
Balance at December 30, 2020 |  |  | 432,906,377 |
Issued for stock-based compensation plans |  |  | 2,195,681 |
Repurchase and retirement of common stock |  |  | (13,410,146) |
Balance at December 31, 2021 |  |  | 421,691,912 |
Issued for stock-based compensation plans |  |  | 1,819,651 |
Repurchase and retirement of common stock |  |  | (11,356,506) |
Balance at December 31, 2022 |  |  | 412,155,057 |
Issued for stock-based compensation plans |  |  | 2,993,340 |
Repurchase and retirement of common stock |  |  | (5,233,936) |
Balance at December 31, 2023 |  |  | 409,914,461 |
The following table provides details for share repurchases during 2023, 2022, and 2021:
| Number of shares |  | Average price per share(1) |  | Total
Q1 2023 open market repurchase | 576,629 |  |  | $43.36 |  | $25
Q2 2023 open market repurchase | 2,246,294 |  |  | $44.52 |  | $100
Q3 2023 open market repurchase | 506,800 |  |  | $49.32 |  | $25
Q4 2023 open market repurchase | 1,904,213 |  |  | $52.52 |  | $100
2023 Share repurchase total | 5,233,936 |  |  | $47.76 |  | $250
Q1 2022 open market repurchase | 5,147,307 |  |  | $34.00 |  | $175
Q2 2022 open market repurchase | 1,770,271 |  |  | $33.89 |  | $60
Q3 2022 open market repurchase | 2,764,846 |  |  | $36.17 |  | $100
Q4 2022 open market repurchase | 1,674,082 |  |  | $38.83 |  | $65
2022 Share repurchase total | 11,356,506 |  |  | $35.22 |  | $400
Q2 2021 accelerated share repurchase | 5,878,791 |  |  | $34.02 |  | $200
Q3 2021 open market repurchase | 769,274 |  |  | $32.50 |  | $25
Q4 2021 open market repurchase | 6,762,081 |  |  | $30.32 |  | $205
2021 Share repurchase total | 13,410,146 |  |  | $32.07 |  | $430
(1)Excludes commissions cost. The total value of shares repurchased during 2023, 2022, and 2021 were $250, $400, and $430, respectively. All of the shares repurchased during 2023, 2022, and 2021 were immediately retired. After giving effect to the share repurchases made through December 31, 2023, approximately $697 remained available for share repurchases as of January 1, 2024 under the prior authorizations by the Board. Under the Company’s share repurchase program (the “Share Repurchase Program”), the Company may repurchase shares by means of trading plans established from time to time in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, block trades, private transactions, open market repurchases and/or accelerated share repurchase agreements, or other derivative transactions. There is no stated expiration for the Share Repurchase Program. Under its Share Repurchase Program, the Company may repurchase shares from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations. The Company is not obligated to repurchase any specific number of shares or to do so at any particular time, and the Share Repurchase Program may be suspended, modified, or terminated at any time without prior notice. The Inflation Reduction Act of 2022 imposes a 1% excise tax on net stock repurchases after December 31, 2022. The Company recorded $1 to additional capital for excise tax on net repurchases in 2023. Stock-Based Compensation Howmet has a stock-based compensation plan under which stock options and/or restricted stock unit awards are granted, generally, in the first half of each year to eligible employees. Stock options are granted at the closing market price of Howmet’s common stock on the date of grant and typically vest over a three-year service period (1/3 each year) with a ten-year contractual term. Restricted stock unit awards typically vest over a three-year service period from the date of grant. As part of Howmet’s stock-based compensation plan design, individuals who are retirement-eligible have a six-month requisite service period in the year of grant. Certain of the restricted stock unit awards include performance and market conditions and are granted to certain eligible employees. For annual performance stock awards, the final number of shares earned will be based on Howmet’s achievement of profitability targets over the respective performance periods and will be earned at the end of the third year. Additionally, the annual performance stock awards include a total shareholder return (“TSR”) component, which depends upon relative performance against the TSRs of a group of peer companies. In 2023, 2022, and 2021, Howmet recognized stock-based compensation expense of $50 ($44 after-tax), $54 ($49 after-tax), and $40 ($36 after-tax), respectively. Senior executive performance awards granted in April 2020 were modified in June 2020, resulting in incremental compensation expense of $12, which was amortized over the remaining service period that ended April 1, 2023. All stock-based compensation expense recorded in 2023, 2022, and 2021 relates to restricted stock unit awards. No stock-based compensation expense was capitalized in any of those years. Stock-based compensation expense was reduced by $2 in 2021 for certain executive pre-vest cancellations, which were recorded in Restructuring and other charges within the Statement of Consolidated Operations. As of December 31, 2023, there was $24 (pre-tax) of unrecognized compensation expense related to non-vested restricted stock unit award grants. This expense is expected to be recognized over a weighted average period of 1.5 years. Stock-based compensation expense is based on the grant date fair value of the applicable equity grant. For restricted stock unit awards, the fair value is equivalent to the closing market price of Howmet’s common stock on the date of grant. The weighted average grant date fair value per share of the 2023, 2022, and 2021 performance stock awards with a market condition including a TSR component is $47.59, $44.44, and $43.41 respectively. The 2023, 2022, and 2021 performance awards were valued using a Monte Carlo model. A Monte Carlo simulation uses assumptions of stock price behavior to estimate the probability of satisfying market conditions and the resulting fair value of the award. The risk-free interest rate (4.4% in 2023, 2.0% in 2022, and 0.2% in 2021) was based on a yield curve of interest rates at the time of the grant based on the remaining performance period. In 2023, 2022, and 2021, volatility of 39.0%, 39.4%, and 56.0%, respectively, was estimated using Howmet's historical volatility in 2023 and 2022 and a blended rate of Howmet's historical volatility and a peer-based volatility in 2021 due to changes in the nature of the business. Stock options were last granted in 2018. The activity for stock options and stock awards during 2023 was as follows (options and awards in millions in the table below):
| Stock options |  | Stock awards
| Number of options |  | Weighted average exercise price per option |  | Number of awards |  | Weighted average FMV per award
Outstanding, December 31, 2022 | 0.9 |  |  | $ | 23.86 |  |  | 6.5 |  |  | $ | 17.77 |
Granted | — |  |  | — |  |  | 0.6 |  |  | 45.25 |
Exercised | (0.4) |  |  | 25.14 |  |  | — |  |  | — |
Converted | — |  |  | — |  |  | (4.3) |  |  | 10.31 |
Expired or forfeited | — |  |  | — |  |  | (0.1) |  |  | 34.88 |
Performance share adjustment | — |  |  | — |  |  | 0.3 |  |  | 21.33 |
Outstanding, December 31, 2023 | 0.5 |  |  | $ | 22.67 |  |  | 3.0 |  |  | $ | 34.23 |
As of December 31, 2023, the stock options outstanding had a weighted average remaining contractual life of 1.7 years and a total intrinsic value of $15. All of the stock options outstanding were fully vested and exercisable. In 2023, 2022, and 2021, the cash received from stock option exercises was $11, $16, and $22, respectively, and the total tax benefit realized from these exercises was $2, $2, and $2, respectively. The total intrinsic value of stock options exercised during 2023, 2022, and 2021 was $9, $10, and $10, respectively. The total intrinsic value of stock awards converted during 2023, 2022, and 2021 was $187, $61, and $55, respectively.

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