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SHARE-BASED COMPENSATION | 3 Months Ended
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Mar. 31, 2023
Share-Based Payment Arrangement [Abstract] |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION As of March 31, 2023, the Company has outstanding share-based awards under the Aflac Incorporated Long-Term Incentive Plan (As Amended and Restated February 14, 2017), as further amended on August 9, 2022 (the Plan). Share-based awards are designed to reward employees for their long-term contributions to the Company and provide incentives for them to remain with the Company. The number and frequency of share-based awards are based on competitive practices, operating results of the Company, government regulations, and other factors. The Plan, allows for a maximum number of shares issuable over its term of 75 million shares including 38 million shares that may be awarded in respect of awards other than options or stock appreciation rights. If any awards granted under the Plan are forfeited or are terminated before being exercised or settled for any reason other than tax forfeiture, then the shares underlying the awards will again be available under the Plan. The Plan allows awards to Company employees for incentive stock options (ISOs), non-qualifying stock options (NQSOs), restricted stock, restricted stock units, and stock appreciation rights. Non-employee directors are eligible for grants of NQSOs, restricted stock, and stock appreciation rights. As of March 31, 2023, approximately 34.8 million shares were available for future grants under this plan. The ISOs and NQSOs have a term of 10 years, and the share-based awards generally vest upon time-based conditions or time and performance-based conditions. Time-based vesting generally occurs after three years. Performance-based vesting conditions generally include the attainment of goals related to Company financial performance. As of March 31, 2023, the only performance-based awards issued and outstanding were restricted stock awards and units. Stock options and stock appreciation rights granted under the amended Plan have an exercise price of at least the fair market value of the underlying stock on the grant date and have an expiration date no later than 10 years from the grant date. Time-based restricted stock awards, restricted stock units and stock options granted after January 1, 2017 generally vest on a ratable basis over three years, and awards granted prior to the amendment vest on a cliff basis over three years. The Compensation Committee of the Board of Directors has the discretion to determine vesting schedules. Share-based awards granted to U.S.-based grantees are settled with authorized but unissued Company stock, while those issued to Japan-based grantees are settled with treasury shares. The following table provides information on stock options outstanding and exercisable at March 31, 2023.
| Stock Option Shares (in thousands) |  | Weighted-Average Remaining Term (in years) |  | Aggregate Intrinsic Value (in millions) |  | Weighted-Average Exercise Price Per Share
Outstanding |  | 1,414 |  |  |  |  | 2.8 |  |  |  | $ | 45 |  |  |  |  | $ | 32.56 |  |
Exercisable |  | 1,414 |  |  |  |  | 2.8 |  |  |  | 45 |  |  |  |  | 32.56 |  |
The Company received cash from the exercise of stock options in the amount of $4 million during the first three months of 2023, compared with $8 million in the first three months of 2022. The tax benefit realized as a result of stock option exercises and restricted stock releases was $17 million in the first three months of 2023, compared with $16 million in the first three months of 2022. As of March 31, 2023, total compensation cost not yet recognized in the Company's consolidated financial statements related to restricted stock awards and units was $75 million, of which $43 million (1.8 million shares) was related to restricted stock awards and units with a performance-based vesting condition. The Company expects to recognize these amounts over a weighted-average period of approximately 1.9 years. There are no other contractual terms covering restricted stock awards once vested. The following table summarizes restricted stock activity during the three-month period ended March 31, 2023.
(In thousands of shares) |  | Shares |  | Weighted-Average Grant-Date Fair Value Per Share
Restricted stock at December 31, 2022 |  | 2,414 |  |  |  | $ | 56.21 |  |
Granted in 2023 |  | 1,066 |  |  |  | 70.52 |  |
Canceled in 2023 |  | (41) |  |  |  | 57.33 |  |
Vested in 2023 |  | (1,080) |  |  |  | 52.66 |  |
Restricted stock at March 31, 2023 |  | 2,359 |  |  |  | $ | 62.34 |  |
In February 2023, the Company granted 454 thousand performance-based stock awards and units, which are contingent on the achievement of the Company's financial performance metrics and its market-based conditions. On the date of grant, the Company estimated the fair value of restricted stock awards and units with market-based conditions using a Monte Carlo simulation model. The model discounts the value of the stock at the assumed vesting date based on the risk-free interest rate. Based on estimates of actual performance versus the vesting thresholds, the calculated fair value percentage pay-out estimate will be updated each quarter. The Company uses third-party analyses to assist in developing the assumptions used in, as well as calibrating, a Monte Carlo simulation model. The Company is responsible for determining the assumptions used in estimating the fair value of its share-based payment awards. For additional information on the Company's long-term share-based compensation plans and the types of share-based awards, see Note 12 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

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