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Share-Based Compensation (Tables) | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Valuation assumptions | The table below summarizes the assumptions used:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Dividend yield | — | % |  | — | % |  | — | %
Expected volatility (1) | 26.5 | % |  | 25.1 | % |  | 24.0 | %
Risk free interest rate (1) | 4.4 | % |  | 4.1 | % |  | 2.0 | %
Expected option life (1) | 9.0 years |  | 6.0 years |  | 6.0 years
(1) The 2024 period includes an expected volatility, risk free interest rate and expected option life of 26.65%, 4.39% and 10 years, respectively, related to the grant of 1.75 million premium-priced stock options.
Option activity | A summary of stock option and SAR activity under the Company’s Long Term Incentive and Share Award Plans during 2024 is presented below:
| Year Ended December 31, 2024
| Number of Options / SARs |  | Weighted Average Exercise Price |  | Weighted Average Contractual Term |  | Aggregate Intrinsic Value
Outstanding, beginning of year | 12,536,593 |  |  | $ | 31.14 |  |  |  |  |
Granted (1) | 2,172,916 |  |  | $ | 145.88 |  |  |  |  |
Exercised | (2,270,334) |  |  | $ | 22.82 |  |  |  |  |
Forfeited or expired | (10,141) |  |  | $ | 46.47 |  |  |  |  |
Outstanding, end of year | 12,429,034 |  |  | $ | 48.54 |  |  | 4.69 |  | $ | 665 |
Exercisable, end of year | 9,710,426 |  |  | $ | 26.55 |  |  | 3.40 |  | $ | 639 |
(1) Includes 1.75 million premium-priced stock options with a weighted average exercise price of $161.24 per share.
Weighted average grant date fair value |
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Weighted average grant date fair value | $ | 29.03 |  |  | $ | 23.50 |  |  | $ | 13.26 |
Aggregate intrinsic value of Options/SARs exercised (in millions) | $ | 153 |  |  | $ | 116 |  |  | $ | 113 |
Unvested restricted share and unit activity | A summary of restricted share and restricted unit activity under the Company’s Long Term Incentive and Share Award Plans for 2024 is presented below:
| Number of Restricted Common Shares |  | Number of Restricted Unit Awards
Unvested Shares: |  |  |
Unvested balance, beginning of year | 1,524,605 |  |  | 305,928 |
Granted | 835,843 |  |  | 146,496 |
Vested | (809,174) |  |  | (154,710) |
Forfeited | (22,733) |  |  | (16,621) |
Unvested balance, end of year | 1,528,541 |  |  | 281,093 |
Weighted Average Grant Date Fair Value: |  |  |
Unvested balance, beginning of year | $ | 54.57 |  |  | $ | 55.63 |
Granted | $ | 90.32 |  |  | $ | 87.21 |
Vested | $ | 49.88 |  |  | $ | 50.57 |
Forfeited | $ | 72.05 |  |  | $ | 77.53 |
Unvested balance, end of year | $ | 76.34 |  |  | $ | 73.58 |
Performance shares and units, valuation assumptions |
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Expected volatility | 25.3 | % |  | 30.4 | % |  | 38.1 | %
Risk free interest rate | 4.5 | % |  | 4.6 | % |  | 1.7 | %
Unvested performance share and unit activity |
| Number of Performance Shares |  | Number of Performance Units
Unvested Shares: |  |  |
Unvested balance, beginning of year | 1,880,696 |  |  | 49,594 |
Granted | 476,906 |  |  | 15,728 |
Performance adjustment (1) (2) | — |  |  | 10,698 |
Vested | (674,406) |  |  | (21,396) |
Forfeited | (3,820) |  |  | (1,687) |
Unvested balance, end of year | 1,679,376 |  |  | 52,937 |
Weighted Average Grant Date Fair Value: |  |  |
Unvested balance, beginning of year | $ | 52.47 |  |  | $ | 56.15 |
Granted | $ | 93.28 |  |  | $ | 93.24 |
Performance adjustment (1) (2) | $ | 0.00 |  |  | $ | 37.38 |
Vested | $ | 37.38 |  |  | $ | 37.38 |
Forfeited | $ | 75.41 |  |  | $ | 68.61 |
Unvested balance, end of year | $ | 70.07 |  |  | $ | 70.57 |
(1) The performance adjustment represents the difference between the number of performance shares granted and earned, which vested following the end of the performance period. The performance shares were granted at the maximum level of achievement. (2) The performance adjustment represents the change in PSUs, which vested following the end of the performance period. The performance units were granted at the target level of achievement.
Share based compensation expense | The following tables present pre-tax and after-tax share-based compensation expense recognized as well as the unrecognized compensation cost associated with unvested awards and the weighted average period over which it is expected to be recognized:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Pre-Tax |  |  |  |  |
Stock options and SARs | $ | 15 |  |  | $ | 11 |  |  | $ | 12 |
Restricted share and unit awards | 57 |  |  | 54 |  |  | 50 |
Performance awards | 55 |  |  | 23 |  |  | 22 |
ESPP | 6 |  |  | 4 |  |  | 4 |
Total | $ | 133 |  |  | $ | 92 |  |  | $ | 88 |
After-Tax |  |  |  |  |
Stock options and SARs | $ | 13 |  |  | $ | 10 |  |  | $ | 11 |
Restricted share and unit awards | 48 |  |  | 45 |  |  | 42 |
Performance awards | 50 |  |  | 21 |  |  | 20 |
ESPP | 5 |  |  | 4 |  |  | 4 |
Total | $ | 116 |  |  | $ | 80 |  |  | $ | 77 |
Unrecognized compensation cost |
| December 31, 2024
| Stock Options and SARs (1) |  | Restricted Common Shares and Units (1) |  | Performance Common Shares and Units
Unrecognized compensation cost related to unvested awards | $ | 55 |  |  | $ | 70 |  |  | $ | 12 |
Weighted average recognition period (years) | 2.08 |  | 1.21 |  | 0.38
(1) Includes awards granted in connection with 1.75 million premium-priced stock options and 0.3 million time-vested restricted shares granted in November 2024.
Restricted Common Shares And Restricted Units |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] |
Weighted average grant date fair value of restricted stock | The following table presents the weighted average grant date fair value of restricted shares and restricted unit awards granted and the aggregate fair value of restricted shares and unit awards vesting in each year.
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Number of restricted shares and restricted unit awards granted | 982,339 |  |  | 825,191 |  |  | 1,089,393 |
Weighted average grant date fair value | $ | 89.86 |  |  | $ | 69.42 |  |  | $ | 47.45 |
Aggregate fair value of vested restricted share and unit awards (in millions) | $ | 85 |  |  | $ | 122 |  |  | $ | 51 |
Performance Common Shares and Units |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] |
Weighted average grant date fair value of restricted stock | The following table presents the weighted average grant date fair values of performance awards granted.
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Number of performance awards | 492,634 |  |  | 568,576 |  |  | 690,772 |
Weighted average grant date fair value | $ | 93.28 |  |  | $ | 74.09 |  |  | $ | 49.91 |
Aggregate fair value of vested performance share and unit awards (in millions) | $ | 61 |  |  | $ | 14 |  |  | $ | 27 |

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