Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]


	First Quarter
	2023		2022
	($ in millions)

Stock-based compensation expense	$	11	$	23
Total tax benefit	6		13

During the first quarter of 2023, we granted stock options, restricted stock units (RSUs) and performance share units (PSUs) pursuant to the Long-Term Incentive Plan (LTIP), as follows:


	First Quarter
	Granted	Weighted-Average Grant-Date Fair Value

Stock options	69,580	$	77.60
RSUs	173,221	237.70
PSUs	58,040	236.68

Stock Options


	First Quarter
	2023		2022
	($ in millions)

Options exercised	66,811		119,343
Cash received upon exercise	$	5	$	10
Related tax benefits realized	3		5

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.


	First Quarter
	2023		2022
	($ in millions)

RSUs vested	149,122		243,301
Common Stock issued net of tax withholding	104,608		172,364
Related tax benefits realized	$	1	$	5

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.


	First Quarter
	2023		2022
	($ in millions)

PSUs earned	58,599		86,420
Common Stock issued net of tax withholding	40,255		54,651
Related tax benefits realized	$	—	$	1