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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | STOCK-BASED COMPENSATION Vistra 2016 Omnibus Incentive Plan On the Effective Date, the Board adopted the 2016 Omnibus Incentive Plan (2016 Incentive Plan), under which an aggregate of 22,500,000 shares of our common stock were reserved for issuance as equity-based awards to our non-employee directors, employees, and certain other persons. Following approval of the Board and approval by the stockholders at the 2019 annual meeting of the Company, the 2016 Incentive Plan was amended to increase the maximum number of shares reserved for issuance under the 2016 Incentive Plan to 37,500,000. The Board or any committee duly authorized by the Board will administer the 2016 Incentive Plan and has broad authority under the 2016 Incentive Plan to, among other things: (a) select participants, (b) determine the types of awards that participants are to receive and the number of shares that are to be subject to such awards and (c) establish the terms and conditions of awards, including the price (if any) to be paid for the shares of the award. The types of awards that may be granted under the 2016 Incentive Plan include stock options, RSUs, restricted stock, performance awards and other forms of awards granted or denominated in shares of Vistra common stock, as well as certain cash-based awards. If any stock option or other stock-based award granted under the 2016 Incentive Plan expires, terminates or is canceled for any reason without having been exercised in full, the number of shares of Vistra common stock underlying any unexercised award shall again be available for awards under the 2016 Incentive Plan. If any shares of restricted stock, performance awards or other stock-based awards denominated in shares of Vistra common stock awarded under the 2016 Incentive Plan are forfeited for any reason, the number of forfeited shares shall again be available for purposes of awards under the 2016 Incentive Plan. Any award under the 2016 Incentive Plan settled in cash shall not be counted against the maximum share limitation. No awards under the 2016 Incentive Plan have been settled in cash since the Effective Date. As is customary in incentive plans of this nature, each share limit and the number and kind of shares available under the 2016 Incentive Plan and any outstanding awards, as well as the exercise or purchase price of awards, and performance targets under certain types of performance-based awards, are required to be adjusted in the event of certain reorganizations, mergers, combinations, recapitalizations, stock splits, stock dividends or other similar events that change the number or kind of shares outstanding, and extraordinary dividends or distributions of property to the Vistra stockholders. Stock-Based Compensation Expense Stock-based compensation expense is reported as SG&A in the consolidated statements of operations as follows:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Total stock-based compensation expense | $ | 77 |  |  | $ | 65 |  |  | $ | 51 |
Income tax benefit | (18) |  |  | (15) |  |  | (12) |
Stock based-compensation expense, net of tax | $ | 59 |  |  | $ | 50 |  |  | $ | 39 |
Stock Options The fair value of each stock option is estimated on the date of grant using a Black-Scholes option-pricing model. The risk-free interest rate used in the option valuation model was based on yields available on the grant dates for U.S. Treasury Strips with maturity consistent with the expected life assumption. The expected term of the option represents the period of time that options granted are expected to be outstanding and is based on the SEC Simplified Method (midpoint of average vesting time and contractual term). Expected volatility is based on an average of the historical, daily volatility of a peer group selected by Vistra over a period consistent with the expected life assumption ending on the grant date. We assumed a 2.3% dividend yield in the valuation of options granted in 2020. These options may be exercised over a three year graded vesting period and will expire 10 years from the grant date. No options were issued in 2021, 2022, or 2023. Stock options outstanding at December 31, 2023 are all held by current or former employees. The following table summarizes our stock option activity:
| Year Ended December 31, 2023
| Stock Options (in thousands) |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (in millions)
Total outstanding at beginning of period | 10,918 |  |  | $ | 20.10 |  |  | 5.1 |  | $ | 39.2 |
Exercised | (4,702) |  |  | $ | 20.20 |  |  |  |  |
Forfeited or expired | (90) |  |  | $ | 21.68 |  |  |  |  |
Total outstanding at end of period | 6,126 |  |  | $ | 20.01 |  |  | 4.2 |  | $ | 113.5 |
Exercisable at December 31, 2023 | 6,126 |  |  | $ | 20.01 |  |  | 4.2 |  | $ | 113.5 |
As of December 31, 2023, there was no unrecognized compensation cost related to unvested stock options granted under the 2016 Incentive Plan. Restricted Stock Units The following table summarizes our restricted stock unit activity:
| Year Ended December 31, 2023
| Restricted Stock Units (in thousands) |  | Weighted Average Grant Date Fair Value |  |  |  |
Total nonvested at beginning of period | 3,615 |  |  | $ | 21.49 |  |  |  |  |
Granted | 2,119 |  |  | $ | 22.68 |  |  |  |  |
Vested | (1,610) |  |  | $ | 22.08 |  |  |  |  |
Forfeited | (216) |  |  | $ | 21.28 |  |  |  |  |
Total nonvested at end of period | 3,908 |  |  | $ | 21.90 |  |  |  |  |
As of December 31, 2023, $50 million of unrecognized compensation cost related to unvested restricted stock units granted under the 2016 Incentive Plan are expected to be recognized over a weighted average period of approximately 2 years. We also issue Performance Stock Units (PSUs) to certain members of management on an annual basis. All PSUs have a three year performance period and a payout opportunity of 0-200% of target (100%), which is intended to be settled in shares of Vistra common stock. We recognized compensation expense associated with PSUs of $36 million, $22 million and $9 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, we have $33 million of unrecognized compensation cost associated with PSUs.

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