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Stock-Based Compensation (Notes) | 6 Months Ended
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Mar. 31, 2022
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"). Both 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. Awards are typically granted annually in the Company’s fiscal first quarter. A summary of the stock-based awards granted is presented below:
| Six Months Ended March 31, |  |
| 2022 |  |  |  | 2021 |  |
| Number Granted |  | Weighted Average Grant Date Fair Value |  |  |  | Number Granted |  | Weighted Average Grant Date Fair Value |  |
Stock options | 548,398 |  |  | $ | 18.59 |  |  |  |  | 932,678 |  |  | $ | 9.36 |  |  |
Stock appreciation rights | 19,768 |  |  | 18.59 |  |  |  |  | 35,254 |  |  | 9.36 |  |  |
Restricted stock/units | 1,267,490 |  |  | 78.50 |  |  |  |  | 1,697,257 |  |  | 46.20 |  |  |
Performance shares | 482,030 |  |  | 82.88 |  |  |  |  | 410,934 |  |  | 50.53 |  |  |
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. 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 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.
| Six Months Ended March 31,
| 2022 |  | 2021
Expected life of option (years) | 6.0 |  | 6.5
Risk-free interest rate | 1.35% |  | 0.6%
Expected volatility of the Company’s stock | 27.8% |  | 27.6%
Expected dividend yield on the Company’s stock | 1.71% |  | 2.28%
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 the 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 and assumptions as 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. 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. Performance Share Awards Performance-based share unit ("PSU") awards are generally contingent on the achievement of predetermined performance goals over a performance period of one to three years as well as on the award holder's continuous employment until the vesting date. The majority of 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, unless the employee is a non-U.S. employee, in which case the awards are settled in cash. The fair value of the portion of PSUs linked to the achievement of performance goals is based on the closing market value of the Company's ordinary shares on the date of grant. Share-based compensation expense for these PSUs is recognized over the performance period based on the probability of achieving the performance targets. The fair value of the portion of PSUs indexed to total shareholder return 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. 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. Share-based compensation expense for these PSUs is not adjusted based upon performance subsequent to the grant date as the likelihood of achieving the market condition is incorporated in the grant date fair value of the award.
| Six Months Ended March 31,
| 2022 |  | 2021
Risk-free interest rate | 0.99% |  | 0.20%
Expected volatility of the Company’s stock | 30.0% |  | 30.9%

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