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Stock-based Compensation (Notes) | 12 Months Ended
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Sep. 30, 2021
Share-based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION On March 10, 2021, the shareholders of the Company approved the Johnson Controls International plc 2021 Equity and Incentive Plan, which terminated the 2012 Share and Incentive Plan, as amended in September 2016 (collectively, the "Plans"). The Plans authorize stock options, stock appreciation rights, restricted (non-vested) stock/units, performance shares, performance units and other stock-based awards. The Compensation and Talent Development Committee of the Company's Board of Directors determines the types of awards to be granted to individual participants and the terms and conditions of the awards. As of September 30, 2021, there were 55 million shares of the Company's common stock reserved and 54 million shares available for issuance under the 2021 Equity and Incentive Plan. The Company has four share-based compensation awards, which are described below. For the fiscal years ended September 30, 2021, 2020 and 2019, compensation cost charged against income for continuing operations, excluding the offsetting impact of outstanding equity swaps, for those plans was approximately $97 million, $66 million and $103 million, respectively, all of which was recorded in selling, general and administrative expenses. The total income tax benefit recognized for continuing operations in the consolidated statements of income for share-based compensation arrangements was approximately $24 million, $16 million and $26 million for the fiscal years ended September 30, 2021, 2020 and 2019, respectively. The tax impact from the exercise and vesting of equity settled awards was $12 million of tax benefit, less than $1 million of tax benefit and $6 million of tax expense for the fiscal years ended September 30, 2021, 2020 and 2019, respectively. The Company does not settle stock options granted under share-based payment arrangements to cash. Stock Options Stock options are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Stock option awards typically vest between two and three years after the grant date and expire ten years from the grant date. The fair value of each option is estimated on the date of grant using a Black-Scholes option valuation model that uses the assumptions noted in the following table. The expected life of options represents the period of time that options granted are expected to be outstanding, assessed separately for executives and non-executives. The risk-free interest rate for periods during the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on the historical volatility of the Company's stock since October 2016 blended with the historical volatility of certain peer companies' stock prior to October 2016 over the most recent period corresponding to the expected life as of the grant date. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of the Company’s ordinary shares as of the grant date. The Company uses historical data to estimate option exercises and employee terminations within the valuation model.
| Year Ended September 30,
| 2021 |  | 2020 |  | 2019
Expected life of option (years) | 6.5 |  | 6.5 |  | 6.4
Risk-free interest rate | 0.60% |  | 1.67% |  | 2.77%
Expected volatility of the Company’s stock | 27.60% |  | 22.40% |  | 21.80%
Expected dividend yield on the Company’s stock | 2.28% |  | 2.49% |  | 3.29%
A summary of stock option activity at September 30, 2021, and changes for the year then ended, is presented below:
| Weighted Average Option Price |  | Shares Subject to Option |  | Weighted Average Remaining Contractual Life (years) |  | Aggregate Intrinsic Value (in millions)
Outstanding, September 30, 2020 | $ | 37.14 |  |  | 10,114,905 |  |  |  |  |
Granted | 45.69 |  |  | 932,678 |  |  |  |  |
Exercised | 36.70 |  |  | (4,840,511) |  |  |  |  |
Forfeited or expired | 37.16 |  |  | (256,061) |  |  |  |  |
Outstanding, September 30, 2021 | $ | 38.84 |  |  | 5,951,011 |  |  | 5.9 |  | $ | 174 |
Exercisable, September 30, 2021 | $ | 37.01 |  |  | 3,536,889 |  |  | 4.3 |  | $ | 110 |
The weighted-average grant-date fair value of options granted during the fiscal years ended September 30, 2021, 2020 and 2019 was $9.36, $7.29 and $5.56, respectively. The total intrinsic value of options exercised during the fiscal years ended September 30, 2021, 2020 and 2019 was approximately $94 million, $30 million and $73 million, respectively. In conjunction with the exercise of stock options, the Company received cash payments for the fiscal years ended September 30, 2021, 2020 and 2019 of approximately $178 million, $75 million and $171 million, respectively. At September 30, 2021, the Company had approximately $10 million of total unrecognized compensation cost related to non-vested stock options granted for continuing operations which is expected to be recognized over a weighted-average period of 1.6 years. Stock Appreciation Rights ("SARs") SARs vest under the same terms and conditions as stock option awards; however, they are settled in cash for the difference between the market price on the date of exercise and the exercise price. As a result, SARs are recorded in the Company’s consolidated statements of financial position as a liability until the date of exercise. The fair value of each SAR award is estimated using a similar method described for stock options. The fair value of each SAR award is recalculated at the end of each reporting period and the liability and expense are adjusted based on the new fair value. The assumptions used to determine the fair value of the SAR awards at September 30, 2021 were as follows:
Expected life of SAR (years) | 0.01 - 4.29
Risk-free interest rate | 0.07% - 0.88%
Expected volatility of the Company’s stock | 27.60%
Expected dividend yield on the Company’s stock | 2.28%
A summary of SAR activity at September 30, 2021, and changes for the year then ended, is presented below:
| Weighted Average SAR Price |  | Shares Subject to SAR |  | Weighted Average Remaining Contractual Life (years) |  | Aggregate Intrinsic Value (in millions)
Outstanding, September 30, 2020 | $ | 30.14 |  |  | 212,637 |  |  |  |  |
Granted | 45.69 |  |  | 35,254 |  |  |  |  |
Exercised | 28.16 |  |  | (88,600) |  |  |  |  |
Forfeited or expired | 32.45 |  |  | (18,708) |  |  |  |  |
Outstanding, September 30, 2021 | $ | 34.99 |  |  | 140,583 |  |  | 3.1 |  | $ | 5 |
Exercisable, September 30, 2021 | $ | 31.40 |  |  | 105,329 |  |  | 1.0 |  | $ | 4 |
In conjunction with the exercise of SARs granted, the Company made payments of $3 million, $2 million and $3 million during the fiscal years ended September 30, 2021, 2020 and 2019, respectively. Restricted (Non-vested) Stock / Units Restricted stock or restricted stock units are typically share settled unless the employee is a non-U.S. employee, in which case the awards are settled in cash. Restricted awards typically vest over a period of three years from the grant date. The Plans allow for different vesting terms on specific grants with approval by the Compensation and Talent Development Committee. The fair value of each share-settled restricted award is based on the closing market value of the Company’s ordinary shares on the date of grant. The fair value of each cash-settled restricted award is recalculated at the end of each reporting period based on the closing market value of the Company's ordinary shares at the end of the reporting period, and the liability and expense are adjusted based on the new fair value. A summary of non-vested restricted stock awards at September 30, 2021, and changes for the fiscal year then ended, is presented below:
| Weighted Average Price |  | Shares/Units Subject to Restriction
Non-vested, September 30, 2020 | $ | 38.58 |  |  | 3,229,879 |
Granted | 48.29 |  |  | 1,865,566 |
Vested | 37.80 |  |  | (1,439,284) |
Forfeited | 41.32 |  |  | (321,724) |
Non-vested, September 30, 2021 | $ | 44.06 |  |  | 3,334,437 |
At September 30, 2021, the Company had approximately $103 million of total unrecognized compensation cost related to non-vested restricted stock arrangements granted for continuing operations which is expected to be recognized over a weighted-average period of 2.0 years. Performance Share Awards Performance-based share unit ("PSU") awards are generally contingent on the achievement of predetermined performance goals over a performance period of three years as well as on the award holder's continuous employment until the vesting date. The PSUs are also indexed to the achievement of specified levels of total shareholder return versus a peer group over the performance period. Each PSU that is earned is settled with shares of the Company's ordinary shares following the completion of the performance period. The fair value of each PSU is estimated on the date of grant using a Monte Carlo simulation that uses the assumptions noted in the following table. The risk-free interest rate for periods during the contractual life of the PSU is based on the U.S. Treasury yield curve in effect at the time of grant. For fiscal years ended 2021 and 2020, the expected volatility is based on the historical volatility of the Company's stock over the most recent three-year period as of the grant date. For fiscal year ended 2019, the expected volatility is based on the historical volatility of the Company's stock since October 2016 blended with the historical volatility of certain peer companies' stock prior to October 2016 over the most recent three-year period as of the grant date.
| Year Ended September 30,
| 2021 |  | 2020 |  | 2019
Risk-free interest rate | 0.20% |  | 1.60% |  | 2.76%
Expected volatility of the Company’s stock | 30.90% |  | 21.80% |  | 22.90%
A summary of the status of the Company’s non-vested PSUs at September 30, 2021, and changes for the fiscal year then ended, is presented below:
| Weighted Average Price |  | Shares/Units Subject to PSU
Non-vested, September 30, 2020 | $ | 39.06 |  |  | 1,617,944 |
Granted | 50.53 |  |  | 410,934 |
Vested | 38.75 |  |  | (789,129) |
Forfeited | 41.86 |  |  | (43,431) |
Non-vested, September 30, 2021 | $ | 43.11 |  |  | 1,196,318 |
At September 30, 2021, the Company had approximately $29 million of total unrecognized compensation cost related to non-vested performance-based share unit awards granted for continuing operations which is expected to be recognized over a weighted-average period of 1.8 years.

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- Definition The entire disclosure for share-based payment arrangement. + 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 + Details
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