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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | Share-Based Compensation The Company recognizes the fair value of share-based compensation awards granted to employees in cost of processing and services, cost of product, and selling, general and administrative expense in its consolidated statements of income. The Company’s share-based compensation awards are typically granted in the first quarter of the year; however, grants may also occur throughout the year in conjunction with acquisitions of businesses, and primarily consist of the following: Restricted Stock Units and Awards – The Company grants restricted stock units and awards to employees and non-employee directors. Time-based restricted stock units and award grants generally vest over a three- or four-year period. Performance-based restricted stock units generally vest over a three- to five-year period based upon the achievement of defined performance goals including revenue growth, achievement of integration milestones, and completion of strategic initiatives. The Company recognizes compensation expense for restricted stock units and awards based on the market price of its common stock on the grant date over the period during which the units and awards vest. Performance Share Units – The Company grants performance share units to employees. The number of shares issued at the end of the performance period is determined by the level of achievement of predefined performance goals, including earnings, revenue growth, synergy and integration attainment, and shareholder return. The Company recognizes compensation expense on performance share units ratably over the requisite performance period of the award, generally two to five years, to the extent management views the performance goals as probable of attainment. The Company recognizes compensation expense for the fair value of the shareholder return component over the requisite service period of the award. Stock Options – The Company grants stock options to employees and non-employee directors at exercise prices equal to the fair market value of the Company’s stock on the dates of grant. Stock option grants generally vest over a three- or four-year period. All stock options expire ten years from the date of the award. The Company recognizes compensation expense for the fair value of the stock options over the requisite service period of the stock option award. Employee Stock Purchase Plan – The Company maintains an employee stock purchase plan that allows eligible employees to purchase a limited number of shares of common stock each quarter through payroll deductions at a discount of the closing price of the Company’s common stock on the last business day of each calendar quarter. Effective April 9, 2020, the Company temporarily suspended the employee discount of 10% under the employee stock purchase plan to help manage discretionary costs in response to the COVID-19 pandemic. Effective January 1, 2021, the discount under the employee stock purchase plan was re-established at 5%, which is considered noncompensatory and therefore does not give rise to recognizable compensation cost. The Company recognized $323 million, $239 million and $369 million of share-based compensation expense during the years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, the total remaining unrecognized compensation cost for restricted stock units and awards, performance share units, and unvested stock options, net of estimated forfeitures, of $495 million is expected to be recognized over a weighted-average period of 2.1 years. During the years ended December 31, 2022, 2021 and 2020, stock options to purchase 3.7 million, 4.4 million and 2.6 million shares, respectively, were exercised. Share-Based Compensation Activity No stock option awards were granted during the year ended December 31, 2022. The weighted-average estimated fair value of stock options granted during the years ended December 31, 2021 and 2020 was $33.35 and $35.02 per share, respectively. The fair values of stock options granted were estimated on the date of grant using a binomial option-pricing model with the following assumptions:
|  | 2021 |  | 2020
Expected life (in years) |  | 6.5 |  | 6.4
Average risk-free interest rate |  | 0.6 | % |  | 1.8 | %
Expected volatility |  | 29.3 | % |  | 28.3 | %
Expected dividend yield |  | 0 | % |  | 0 | %
The Company determined the expected life of stock options using historical data. The risk-free interest rate was based on the U.S. treasury yield curve in effect as of the grant date. Expected volatility was determined using weighted-average implied market volatility combined with historical volatility. The Company believes that a blend of historical volatility and implied volatility better reflects future market conditions and better indicates expected volatility than purely historical volatility. A summary of stock option activity is as follows:
| Shares (In thousands) |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (In millions)
Stock options outstanding - December 31, 2021 | 10,229 |  |  | $ | 56.36 |  |  |  |  |
Granted | — |  |  | — |  |  |  |  |
Forfeited | (204) |  |  | 111.39 |  |  |  |  |
Exercised | (3,689) |  |  | 42.06 |  |  |  |  |
Stock options outstanding - December 31, 2022 | 6,336 |  |  | $ | 62.91 |  |  | 3.92 |  | $ | 256 |
Stock options exercisable - December 31, 2022 | 5,696 |  |  | $ | 57.36 |  |  | 3.52 |  | $ | 256 |
A summary of restricted stock unit, restricted stock award and performance share unit activity is as follows:
|  | Restricted Stock Units and Awards |  | Performance Share Units
|  | Shares (In thousands) |  | Weighted- Average Grant Date Fair Value |  | Shares (In thousands) |  | Weighted- Average Grant Date Fair Value
Units and awards - December 31, 2021 |  | 5,074 |  |  | $ | 101.09 |  |  | 1,392 |  |  | $ | 96.32 |
Granted |  | 3,473 |  |  | 93.54 |  |  | 3,050 |  |  | 100.78 |
Forfeited |  | (759) |  |  | 100.21 |  |  | (122) |  |  | 97.00 |
Vested |  | (2,258) |  |  | 99.70 |  |  | (1,077) |  |  | 103.13 |
Units and awards - December 31, 2022 |  | 5,530 |  |  | $ | 96.88 |  |  | 3,243 |  |  | $ | 100.93 |
In conjunction with certain acquisitions, the Company granted restricted stock units with performance vesting provisions to be measured over two and five years, which are presented as performance share units within the table above. The table below presents additional information related to stock option and restricted stock unit activity:
(In millions) |  | 2022 |  | 2021 |  | 2020
Total intrinsic value of stock options exercised |  | $ | 226 |  |  | $ | 339 |  |  | $ | 194 |
Fair value of restricted stock units vested |  | 335 |  |  | 332 |  |  | 454 |
Income tax benefit from stock options exercised and restricted stock units vested |  | 109 |  |  | 142 |  |  | 156 |
Cash received from stock options exercised |  | 105 |  |  | 91 |  |  | 83 |
At December 31, 2022, 22.0 million share-based awards were available for grant under the Amended and Restated Fiserv, Inc. 2007 Omnibus Incentive Plan. Under its employee stock purchase plan, the Company issued 0.5 million shares during each of the years ended December 31, 2022, 2021 and 2020. At December 31, 2022, there were 23.3 million shares available for issuance under the employee stock purchase plan.

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