Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]


	Third Quarter				First Nine Months
	2020		2019		2020		2019
	($ in millions)

Stock-based compensation expense	$	13	$	10	$	25	$	46
Total tax benefit	10		3		39		34

During 2020, a committee of nonemployee members of our Board of Directors (and the Chief Executive Officer when delegated authority by such committee) granted stock options, restricted stock units (RSUs) and performance share units (PSUs) pursuant to the Long-Term Incentive Plan (LTIP), as follows:


	Third Quarter			First Nine Months
	Granted	Weighted-Average Grant-Date Fair Value		Granted	Weighted-Average Grant-Date Fair Value

Stock options	—	$	—	43,770	$	52.05
RSUs	10,230	211.90		177,770	210.13
PSUs	—	—		78,720	212.67

Stock Options


	Third Quarter				First Nine Months
	2020		2019		2020		2019
	($ in millions)

Stock options exercised	313,358		55,155		998,996		677,072
Cash received upon exercise	$	27	$	3	$	82	$	47
Related tax benefit realized	8		1		24		16

Restricted Stock Units

RSUs granted primarily have a four-year ratable restriction period and will be settled through the issuance of shares of Norfolk Southern common stock (Common Stock). Certain RSU grants include cash dividend equivalent payments during the restriction period in an amount equal to the regular quarterly dividends paid on Common Stock.


	Third Quarter				First Nine Months
	2020		2019		2020		2019
	($ in millions)

RSUs vested	1,635		142		203,934		166,197
Common Stock issued net of tax withholding	1,630		102		145,342		119,346
Related tax benefit realized	$	—	$	—	$	4	$	2

Performance Share Units

PSUs provide for awards based on the achievement of certain predetermined corporate performance goals at the end of a three-year cycle and are settled through the issuance of shares of Common Stock. All PSUs will earn out based on the achievement of performance conditions and some will also earn out based on a market condition. The market condition fair value was measured on the date of grant using a Monte Carlo simulation model. No PSUs were earned or paid out during the third quarters of 2020 or 2019.


	First Nine Months
	2020		2019
	($ in millions)

PSUs earned	235,935		331,099
Common Stock issued net of tax withholding	156,450		221,241
Related tax benefit realized	$	7	$	9