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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2018
Stock-Based Compensation [Line Items] |
Stock-Based Compensation | (PPL, PPL Electric and LKE) Under the ICP, SIP and the ICPKE (together, the Plans), restricted shares of PPL common stock, restricted stock units, performance units and stock options may be granted to officers and other key employees of PPL, PPL Electric, LKE and other affiliated companies. Awards under the Plans are made by the Compensation, Governance and Nominating Committee (CGNC) of the PPL Board of Directors, in the case of the ICP and SIP, and by the PPL Corporate Leadership Council (CLC), in the case of the ICPKE. The following table details the award limits under each of the Plans.
|  | Total Plan |  | Annual Grant Limit Total As % of Outstanding |  | Annual Grant |  | Annual Grant Limit For Individual Participants - Performance Based Awards
|  | Award Limit |  | PPL Common Stock On First Day of |  | Limit Options |  | For awards denominated in |  | For awards denominated in
Plan |  | (Shares) |  | Each Calendar Year |  | (Shares) |  | shares (Shares) |  | cash (in dollars)
SIP |  | 15,000,000 |  |  |  |  | 2,000,000 |  |  | 750,000 |  |  | $ | 15,000,000 |
ICPKE |  | 14,199,796 |  |  | 2 | % |  | 3,000,000 |  |  |  |  |  |  |
Any portion of these awards that has not been granted may be carried over and used in any subsequent year. If any award lapses, the rights of the participant terminate, or, with respect to certain awards, is forfeited, the shares of PPL common stock underlying such an award are again available for grant. Shares delivered under the Plans may be in the form of authorized and unissued PPL common stock, common stock held in treasury by PPL or PPL common stock purchased on the open market (including private purchases) in accordance with applicable securities laws. Restricted Stock Units Restricted stock units are awards based on the fair value of PPL common stock on the date of grant. Actual PPL common shares will be issued upon completion of a restriction period, generally three years. Under the SIP, each restricted stock unit entitles the executive to accrue additional restricted stock units equal to the amount of quarterly dividends paid on PPL stock. These additional restricted stock units are deferred and payable in shares of PPL common stock at the end of the restriction period. Dividend equivalents on restricted stock unit awards granted under the ICPKE are currently paid in cash when dividends are declared by PPL. The fair value of restricted stock units granted is recognized on a straight-line basis over the service period or through the date at which the employee reaches retirement eligibility. The fair value of restricted stock units granted to retirement-eligible employees is recognized as compensation expense immediately upon the date of grant. Recipients of restricted stock units granted under the ICPKE may also be granted the right to receive dividend equivalents through the end of the restriction period or until the award is forfeited. Restricted stock units are subject to forfeiture or accelerated payout under the plan provisions for termination, retirement, disability and death of employees. Restrictions lapse on restricted stock units fully, in certain situations, as defined by each of the Plans. The weighted-average grant date fair value of restricted stock units granted was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 30.58 |  |  | $ | 35.30 |  |  | $ | 33.84 |
PPL Electric | 30.00 |  |  | 35.45 |  |  | 34.32 |
LKE | 30.98 |  |  | 35.25 |  |  | 33.73 |
Restricted stock unit activity for 2018 was:
| Restricted Shares/Units |  | Weighted- Average Grant Date Fair Value Per Share
PPL |  |  |
Nonvested, beginning of period | 1,291,649 |  |  | $ | 34.07 |
Granted | 369,308 |  |  | 30.58 |
Vested | (529,263 | ) |  | 32.97 |
Forfeited | (33,491 | ) |  | 33.30 |
Nonvested, end of period (a) | 1,098,203 |  |  | 33.45 |
PPL Electric |  |  |
Nonvested, beginning of period | 184,416 |  |  | $ | 34.20 |
Transfer between registrants | (2,906 | ) |  | 33.95 |
Granted | 76,051 |  |  | 30.00 |
Vested | (56,352 | ) |  | 32.39 |
Forfeited | (13,872 | ) |  | 33.50 |
Nonvested, end of period | 187,337 |  |  | 33.09 |
LKE |  |  |
Nonvested, beginning of period | 231,557 |  |  | $ | 34.01 |
Transfer between registrants | (1,284 | ) |  | 33.98 |
Granted | 58,377 |  |  | 30.98 |
Vested | (154,606 | ) |  | 33.38 |
Forfeited | (1,014 | ) |  | 29.52 |
Nonvested, end of period | 133,030 |  |  | 33.45 |
(a) | Excludes 45,298 restricted stock units for which restrictions lapsed for former PPL Energy Supply employees as a result of the June 2015 spinoff, but for which distribution will not occur until the end of the original restriction period of the awards.
Substantially all restricted stock unit awards are expected to vest. The total fair value of restricted stock units vesting for the years ended December 31 was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 16 |  |  | $ | 20 |  |  | $ | 30 |
PPL Electric | 2 |  |  | 3 |  |  | 3 |
LKE | 5 |  |  | 4 |  |  | 5 |
Performance Units - Total Shareowner Return Performance units based on relative Total Shareowner Return (TSR) are intended to encourage and reward future corporate performance. Performance units represent a target number of shares (Target Award) of PPL's common stock that the recipient would receive upon PPL's attainment of the applicable performance goal. Performance is determined based on TSR during a three-year performance period. At the end of the period, payout is determined by comparing PPL's performance to the TSR of the companies included in the Philadelphia Stock Exchange Utility Index. Awards are payable on a graduated basis based on thresholds that measure PPL's performance relative to peers that comprise the applicable index on which each year's awards are measured. Awards can be paid up to 200% of the Target Award or forfeited with no payout if performance is below a minimum established performance threshold. Dividends payable during the performance cycle accumulate and are converted into additional performance units and are payable in shares of PPL common stock upon completion of the performance period based on the determination of the CGNC of whether the performance goals have been achieved. Under the plan provisions, TSR performance units are subject to forfeiture upon termination of employment except for retirement, one year or more from commencement of the performance period, disability or death of an employee. The fair value of TSR performance units granted to retirement-eligible employees is recognized as compensation expense on a straight-line basis over a one-year period, the minimum vesting period required for an employee to be entitled to payout of the awards with no proration. For employees who are not retirement-eligible, compensation expense is recognized over the shorter of the three-year performance period or the period until the employee is retirement-eligible, with a minimum vesting and recognition period of one-year. If an employee retires before the one-year vesting period, the performance units are forfeited. Performance units vest on a pro rata basis, in certain situations, as defined by each of the Plans. The fair value of each performance unit granted was estimated using a Monte Carlo pricing model that considers stock beta, a risk-free interest rate, expected stock volatility and expected life. The stock beta was calculated comparing the risk of the individual securities to the average risk of the companies in the index group. The risk-free interest rate reflects the yield on a U.S. Treasury bond commensurate with the expected life of the performance unit. Volatility over the expected term of the performance unit is calculated using daily stock price observations for PPL and all companies in the index group and is evaluated with consideration given to prior periods that may need to be excluded based on events not likely to recur that had impacted PPL and the companies in the index group. PPL uses a mix of historic and implied volatility to value awards. The weighted-average assumptions used in the model were:
| 2018 |  | 2017 |  | 2016
Expected stock volatility | 17.60 | % |  | 17.40 | % |  | 19.60 | %
Expected life | 3 years |  |  | 3 years |  |  | 3 years |
The weighted-average grant date fair value of TSR performance units granted was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 38.26 |  |  | $ | 38.38 |  |  | $ | 35.74 |
PPL Electric | 38.37 |  |  | 38.37 |  |  | 35.68 |
LKE | 38.32 |  |  | 38.24 |  |  | 35.28 |
TSR performance unit activity for 2018 was:
| TSR Performance Units |  | Weighted- Average Grant Date Fair Value Per Share
PPL |  |  |
Nonvested, beginning of period | 978,231 |  |  | $ | 36.67 |
Granted | 263,593 |  |  | 38.26 |
Vested | (89,015 | ) |  | 34.78 |
Forfeited (a) | (312,685 | ) |  | 35.26 |
Nonvested, end of period | 840,124 |  |  | 37.89 |
PPL Electric |  |  |
Nonvested, beginning of period | 75,513 |  |  | $ | 37.00 |
Granted | 22,394 |  |  | 38.37 |
Vested | (5,817 | ) |  | 35.34 |
Forfeited (a) | (24,227 | ) |  | 36.27 |
Nonvested, end of period | 67,863 |  |  | 37.86 |
| TSR Performance Units |  | Weighted- Average Grant Date Fair Value Per Share
LKE |  |  |
Nonvested, beginning of period | 180,289 |  |  | $ | 36.69 |
Granted | 53,961 |  |  | 38.32 |
Vested | (14,547 | ) |  | 35.04 |
Forfeited (a) | (70,707 | ) |  | 35.91 |
Nonvested, end of period | 148,996 |  |  | 37.81 |
(a) | Primarily related to the forfeiture of 2015 performance units as performance during the period was below the minimum established performance threshold, which resulted in no payout.
The total fair value of TSR performance units vesting for the year ended December 31, 2018, 2017 and 2016 was $3 million, $8 million and $12 million for PPL and insignificant for PPL Electric and LKE. Performance Units - Return on Equity Beginning in 2017, PPL changed its executive compensation mix to add performance units based on achievement of a corporate Return on Equity (ROE). ROE performance units are intended to further align compensation with the company’s strategy and reward for future corporate performance. Payout of these performance units will be based on the calculated average of the annual corporate ROE for each year of the three-year performance period for PPL Corporation. ROE performance units represent a target number of shares (Target Award) of PPL's common stock that the recipient would receive upon PPL's attainment of the applicable ROE performance goal. ROE performance units can be paid up to 200% of the Target Award or forfeited with no payout if performance is below a minimum established performance threshold. Dividends payable during the performance cycle accumulate and are converted into additional performance units and are payable in shares of PPL common stock upon completion of the performance period based on the determination of the CGNC of whether the performance goals have been achieved. Under the plan provisions, these performance units are subject to forfeiture upon termination of employment except for retirement, disability or death of an employee. The fair value of each ROE performance unit is based on the closing price of PPL Common Stock on the date of grant. The fair value of ROE performance units is recognized on a straight-line basis over the service period or through the date at which the employee reaches retirement eligibility. The fair value awards granted to retirement-eligible employees is recognized as compensation expense immediately upon the date of grant. As these awards are based on performance conditions, the level of attainment is monitored each reporting period and compensation expense is adjusted based on the expected attainment level. The weighted-average grant date fair value of ROE performance units granted was:
| 2018 |  | 2017
PPL | $ | 32.21 |  |  | $ | 32.42 |
PPL Electric | 32.32 |  |  | 34.41 |
LKE | 32.28 |  |  | 34.29 |
ROE performance unit activity for 2018 was:
| ROE Performance Unit |  | Weighted- Average Grant Date Fair Value Per Share
PPL |  |  |
Nonvested, beginning of period | 96,928 |  |  | $ | 34.42 |
Granted | 234,664 |  |  | 32.21 |
Forfeited | (2,634 | ) |  | 32.96 |
Nonvested, end of period | 328,958 |  |  | 32.86 |
PPL Electric |  |  |
Nonvested, beginning of period | 8,696 |  |  | $ | 34.41 |
Granted | 19,899 |  |  | 32.32 |
Forfeited | (2,635 | ) |  | 32.96 |
Nonvested, end of period | 25,960 |  |  | 32.96 |
LKE |  |  |
Nonvested, beginning of period | 20,539 |  |  | $ | 34.29 |
Granted | 49,081 |  |  | 32.28 |
Nonvested, end of period | 69,620 |  |  | 32.87 |
Stock Options PPL's CGNC eliminated the use of stock options due to changes in its long-term incentive mix beginning in January 2014. Under the Plans, stock options had been granted with an option exercise price per share not less than the fair value of PPL's common stock on the date of grant. Options outstanding at December 31, 2018, are fully vested. All options expire no later than 10 years from the grant date. The options become exercisable immediately in certain situations, as defined by each of the Plans. Stock option activity for 2018 was:
| Number of Options |  | Weighted Average Exercise Price Per Share |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Total Intrinsic Value
PPL |  |  |  |  |  |  |
Outstanding at beginning of period | 3,762,183 |  |  | $ | 29.42 |  |  |  |  |
Exercised | (151,750 | ) |  | 28.43 |  |  |  |  |
Forfeited | (695,908 | ) |  | 42.87 |  |  |  |  |
Outstanding and exercisable at end of period | 2,914,525 |  |  | 26.26 |  |  | 3.4 |  | $ | 6 |
For 2018, 2017 and 2016, PPL received $5 million, $19 million and $52 million in cash from stock options exercised. The related income tax benefits realized were not significant. The total intrinsic value of stock options exercised for 2018 was insignificant and was $8 million and $18 million for 2017 and 2016. Compensation Expense Compensation expense for restricted stock, restricted stock units, performance units and stock options accounted for as equity awards, which for PPL Electric and LKE includes an allocation of PPL Services' expense, was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 25 |  |  | $ | 32 |  |  | $ | 27 |
PPL Electric | 10 |  |  | 18 |  |  | 16 |
LKE | 8 |  |  | 8 |  |  | 7 |
The income tax benefit related to above compensation expense was as follows:
| 2018 |  | 2017 |  | 2016
PPL | $ | 10 |  |  | $ | 13 |  |  | $ | 12 |
PPL Electric | 3 |  |  | 8 |  |  | 7 |
LKE | 2 |  |  | 3 |  |  | 3 |
At December 31, 2018, unrecognized compensation expense related to nonvested stock awards was:
| Unrecognized Compensation Expense |  | Weighted- Average Period for Recognition
PPL | $ | 10 |  |  | 1.6
PPL Electric | 2 |  |  | 1.7
LKE | 1 |  |  | 1.4
PPL Electric Utilities Corp [Member] |
Stock-Based Compensation [Line Items] |
Stock-Based Compensation | (PPL, PPL Electric and LKE) Under the ICP, SIP and the ICPKE (together, the Plans), restricted shares of PPL common stock, restricted stock units, performance units and stock options may be granted to officers and other key employees of PPL, PPL Electric, LKE and other affiliated companies. Awards under the Plans are made by the Compensation, Governance and Nominating Committee (CGNC) of the PPL Board of Directors, in the case of the ICP and SIP, and by the PPL Corporate Leadership Council (CLC), in the case of the ICPKE. The following table details the award limits under each of the Plans.
|  | Total Plan |  | Annual Grant Limit Total As % of Outstanding |  | Annual Grant |  | Annual Grant Limit For Individual Participants - Performance Based Awards
|  | Award Limit |  | PPL Common Stock On First Day of |  | Limit Options |  | For awards denominated in |  | For awards denominated in
Plan |  | (Shares) |  | Each Calendar Year |  | (Shares) |  | shares (Shares) |  | cash (in dollars)
SIP |  | 15,000,000 |  |  |  |  | 2,000,000 |  |  | 750,000 |  |  | $ | 15,000,000 |
ICPKE |  | 14,199,796 |  |  | 2 | % |  | 3,000,000 |  |  |  |  |  |  |
Any portion of these awards that has not been granted may be carried over and used in any subsequent year. If any award lapses, the rights of the participant terminate, or, with respect to certain awards, is forfeited, the shares of PPL common stock underlying such an award are again available for grant. Shares delivered under the Plans may be in the form of authorized and unissued PPL common stock, common stock held in treasury by PPL or PPL common stock purchased on the open market (including private purchases) in accordance with applicable securities laws. Restricted Stock Units Restricted stock units are awards based on the fair value of PPL common stock on the date of grant. Actual PPL common shares will be issued upon completion of a restriction period, generally three years. Under the SIP, each restricted stock unit entitles the executive to accrue additional restricted stock units equal to the amount of quarterly dividends paid on PPL stock. These additional restricted stock units are deferred and payable in shares of PPL common stock at the end of the restriction period. Dividend equivalents on restricted stock unit awards granted under the ICPKE are currently paid in cash when dividends are declared by PPL. The fair value of restricted stock units granted is recognized on a straight-line basis over the service period or through the date at which the employee reaches retirement eligibility. The fair value of restricted stock units granted to retirement-eligible employees is recognized as compensation expense immediately upon the date of grant. Recipients of restricted stock units granted under the ICPKE may also be granted the right to receive dividend equivalents through the end of the restriction period or until the award is forfeited. Restricted stock units are subject to forfeiture or accelerated payout under the plan provisions for termination, retirement, disability and death of employees. Restrictions lapse on restricted stock units fully, in certain situations, as defined by each of the Plans. The weighted-average grant date fair value of restricted stock units granted was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 30.58 |  |  | $ | 35.30 |  |  | $ | 33.84 |
PPL Electric | 30.00 |  |  | 35.45 |  |  | 34.32 |
LKE | 30.98 |  |  | 35.25 |  |  | 33.73 |
Restricted stock unit activity for 2018 was:
| Restricted Shares/Units |  | Weighted- Average Grant Date Fair Value Per Share
PPL |  |  |
Nonvested, beginning of period | 1,291,649 |  |  | $ | 34.07 |
Granted | 369,308 |  |  | 30.58 |
Vested | (529,263 | ) |  | 32.97 |
Forfeited | (33,491 | ) |  | 33.30 |
Nonvested, end of period (a) | 1,098,203 |  |  | 33.45 |
PPL Electric |  |  |
Nonvested, beginning of period | 184,416 |  |  | $ | 34.20 |
Transfer between registrants | (2,906 | ) |  | 33.95 |
Granted | 76,051 |  |  | 30.00 |
Vested | (56,352 | ) |  | 32.39 |
Forfeited | (13,872 | ) |  | 33.50 |
Nonvested, end of period | 187,337 |  |  | 33.09 |
LKE |  |  |
Nonvested, beginning of period | 231,557 |  |  | $ | 34.01 |
Transfer between registrants | (1,284 | ) |  | 33.98 |
Granted | 58,377 |  |  | 30.98 |
Vested | (154,606 | ) |  | 33.38 |
Forfeited | (1,014 | ) |  | 29.52 |
Nonvested, end of period | 133,030 |  |  | 33.45 |
(a) | Excludes 45,298 restricted stock units for which restrictions lapsed for former PPL Energy Supply employees as a result of the June 2015 spinoff, but for which distribution will not occur until the end of the original restriction period of the awards.
Substantially all restricted stock unit awards are expected to vest. The total fair value of restricted stock units vesting for the years ended December 31 was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 16 |  |  | $ | 20 |  |  | $ | 30 |
PPL Electric | 2 |  |  | 3 |  |  | 3 |
LKE | 5 |  |  | 4 |  |  | 5 |
Performance Units - Total Shareowner Return Performance units based on relative Total Shareowner Return (TSR) are intended to encourage and reward future corporate performance. Performance units represent a target number of shares (Target Award) of PPL's common stock that the recipient would receive upon PPL's attainment of the applicable performance goal. Performance is determined based on TSR during a three-year performance period. At the end of the period, payout is determined by comparing PPL's performance to the TSR of the companies included in the Philadelphia Stock Exchange Utility Index. Awards are payable on a graduated basis based on thresholds that measure PPL's performance relative to peers that comprise the applicable index on which each year's awards are measured. Awards can be paid up to 200% of the Target Award or forfeited with no payout if performance is below a minimum established performance threshold. Dividends payable during the performance cycle accumulate and are converted into additional performance units and are payable in shares of PPL common stock upon completion of the performance period based on the determination of the CGNC of whether the performance goals have been achieved. Under the plan provisions, TSR performance units are subject to forfeiture upon termination of employment except for retirement, one year or more from commencement of the performance period, disability or death of an employee. The fair value of TSR performance units granted to retirement-eligible employees is recognized as compensation expense on a straight-line basis over a one-year period, the minimum vesting period required for an employee to be entitled to payout of the awards with no proration. For employees who are not retirement-eligible, compensation expense is recognized over the shorter of the three-year performance period or the period until the employee is retirement-eligible, with a minimum vesting and recognition period of one-year. If an employee retires before the one-year vesting period, the performance units are forfeited. Performance units vest on a pro rata basis, in certain situations, as defined by each of the Plans. The fair value of each performance unit granted was estimated using a Monte Carlo pricing model that considers stock beta, a risk-free interest rate, expected stock volatility and expected life. The stock beta was calculated comparing the risk of the individual securities to the average risk of the companies in the index group. The risk-free interest rate reflects the yield on a U.S. Treasury bond commensurate with the expected life of the performance unit. Volatility over the expected term of the performance unit is calculated using daily stock price observations for PPL and all companies in the index group and is evaluated with consideration given to prior periods that may need to be excluded based on events not likely to recur that had impacted PPL and the companies in the index group. PPL uses a mix of historic and implied volatility to value awards. The weighted-average assumptions used in the model were:
| 2018 |  | 2017 |  | 2016
Expected stock volatility | 17.60 | % |  | 17.40 | % |  | 19.60 | %
Expected life | 3 years |  |  | 3 years |  |  | 3 years |
The weighted-average grant date fair value of TSR performance units granted was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 38.26 |  |  | $ | 38.38 |  |  | $ | 35.74 |
PPL Electric | 38.37 |  |  | 38.37 |  |  | 35.68 |
LKE | 38.32 |  |  | 38.24 |  |  | 35.28 |
TSR performance unit activity for 2018 was:
| TSR Performance Units |  | Weighted- Average Grant Date Fair Value Per Share
PPL |  |  |
Nonvested, beginning of period | 978,231 |  |  | $ | 36.67 |
Granted | 263,593 |  |  | 38.26 |
Vested | (89,015 | ) |  | 34.78 |
Forfeited (a) | (312,685 | ) |  | 35.26 |
Nonvested, end of period | 840,124 |  |  | 37.89 |
PPL Electric |  |  |
Nonvested, beginning of period | 75,513 |  |  | $ | 37.00 |
Granted | 22,394 |  |  | 38.37 |
Vested | (5,817 | ) |  | 35.34 |
Forfeited (a) | (24,227 | ) |  | 36.27 |
Nonvested, end of period | 67,863 |  |  | 37.86 |
| TSR Performance Units |  | Weighted- Average Grant Date Fair Value Per Share
LKE |  |  |
Nonvested, beginning of period | 180,289 |  |  | $ | 36.69 |
Granted | 53,961 |  |  | 38.32 |
Vested | (14,547 | ) |  | 35.04 |
Forfeited (a) | (70,707 | ) |  | 35.91 |
Nonvested, end of period | 148,996 |  |  | 37.81 |
(a) | Primarily related to the forfeiture of 2015 performance units as performance during the period was below the minimum established performance threshold, which resulted in no payout.
The total fair value of TSR performance units vesting for the year ended December 31, 2018, 2017 and 2016 was $3 million, $8 million and $12 million for PPL and insignificant for PPL Electric and LKE. Performance Units - Return on Equity Beginning in 2017, PPL changed its executive compensation mix to add performance units based on achievement of a corporate Return on Equity (ROE). ROE performance units are intended to further align compensation with the company’s strategy and reward for future corporate performance. Payout of these performance units will be based on the calculated average of the annual corporate ROE for each year of the three-year performance period for PPL Corporation. ROE performance units represent a target number of shares (Target Award) of PPL's common stock that the recipient would receive upon PPL's attainment of the applicable ROE performance goal. ROE performance units can be paid up to 200% of the Target Award or forfeited with no payout if performance is below a minimum established performance threshold. Dividends payable during the performance cycle accumulate and are converted into additional performance units and are payable in shares of PPL common stock upon completion of the performance period based on the determination of the CGNC of whether the performance goals have been achieved. Under the plan provisions, these performance units are subject to forfeiture upon termination of employment except for retirement, disability or death of an employee. The fair value of each ROE performance unit is based on the closing price of PPL Common Stock on the date of grant. The fair value of ROE performance units is recognized on a straight-line basis over the service period or through the date at which the employee reaches retirement eligibility. The fair value awards granted to retirement-eligible employees is recognized as compensation expense immediately upon the date of grant. As these awards are based on performance conditions, the level of attainment is monitored each reporting period and compensation expense is adjusted based on the expected attainment level. The weighted-average grant date fair value of ROE performance units granted was:
| 2018 |  | 2017
PPL | $ | 32.21 |  |  | $ | 32.42 |
PPL Electric | 32.32 |  |  | 34.41 |
LKE | 32.28 |  |  | 34.29 |
ROE performance unit activity for 2018 was:
| ROE Performance Unit |  | Weighted- Average Grant Date Fair Value Per Share
PPL |  |  |
Nonvested, beginning of period | 96,928 |  |  | $ | 34.42 |
Granted | 234,664 |  |  | 32.21 |
Forfeited | (2,634 | ) |  | 32.96 |
Nonvested, end of period | 328,958 |  |  | 32.86 |
PPL Electric |  |  |
Nonvested, beginning of period | 8,696 |  |  | $ | 34.41 |
Granted | 19,899 |  |  | 32.32 |
Forfeited | (2,635 | ) |  | 32.96 |
Nonvested, end of period | 25,960 |  |  | 32.96 |
LKE |  |  |
Nonvested, beginning of period | 20,539 |  |  | $ | 34.29 |
Granted | 49,081 |  |  | 32.28 |
Nonvested, end of period | 69,620 |  |  | 32.87 |
Stock Options PPL's CGNC eliminated the use of stock options due to changes in its long-term incentive mix beginning in January 2014. Under the Plans, stock options had been granted with an option exercise price per share not less than the fair value of PPL's common stock on the date of grant. Options outstanding at December 31, 2018, are fully vested. All options expire no later than 10 years from the grant date. The options become exercisable immediately in certain situations, as defined by each of the Plans. Stock option activity for 2018 was:
| Number of Options |  | Weighted Average Exercise Price Per Share |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Total Intrinsic Value
PPL |  |  |  |  |  |  |
Outstanding at beginning of period | 3,762,183 |  |  | $ | 29.42 |  |  |  |  |
Exercised | (151,750 | ) |  | 28.43 |  |  |  |  |
Forfeited | (695,908 | ) |  | 42.87 |  |  |  |  |
Outstanding and exercisable at end of period | 2,914,525 |  |  | 26.26 |  |  | 3.4 |  | $ | 6 |
For 2018, 2017 and 2016, PPL received $5 million, $19 million and $52 million in cash from stock options exercised. The related income tax benefits realized were not significant. The total intrinsic value of stock options exercised for 2018 was insignificant and was $8 million and $18 million for 2017 and 2016. Compensation Expense Compensation expense for restricted stock, restricted stock units, performance units and stock options accounted for as equity awards, which for PPL Electric and LKE includes an allocation of PPL Services' expense, was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 25 |  |  | $ | 32 |  |  | $ | 27 |
PPL Electric | 10 |  |  | 18 |  |  | 16 |
LKE | 8 |  |  | 8 |  |  | 7 |
The income tax benefit related to above compensation expense was as follows:
| 2018 |  | 2017 |  | 2016
PPL | $ | 10 |  |  | $ | 13 |  |  | $ | 12 |
PPL Electric | 3 |  |  | 8 |  |  | 7 |
LKE | 2 |  |  | 3 |  |  | 3 |
At December 31, 2018, unrecognized compensation expense related to nonvested stock awards was:
| Unrecognized Compensation Expense |  | Weighted- Average Period for Recognition
PPL | $ | 10 |  |  | 1.6
PPL Electric | 2 |  |  | 1.7
LKE | 1 |  |  | 1.4
LG And E And KU Energy LLC [Member] |
Stock-Based Compensation [Line Items] |
Stock-Based Compensation | (PPL, PPL Electric and LKE) Under the ICP, SIP and the ICPKE (together, the Plans), restricted shares of PPL common stock, restricted stock units, performance units and stock options may be granted to officers and other key employees of PPL, PPL Electric, LKE and other affiliated companies. Awards under the Plans are made by the Compensation, Governance and Nominating Committee (CGNC) of the PPL Board of Directors, in the case of the ICP and SIP, and by the PPL Corporate Leadership Council (CLC), in the case of the ICPKE. The following table details the award limits under each of the Plans.
|  | Total Plan |  | Annual Grant Limit Total As % of Outstanding |  | Annual Grant |  | Annual Grant Limit For Individual Participants - Performance Based Awards
|  | Award Limit |  | PPL Common Stock On First Day of |  | Limit Options |  | For awards denominated in |  | For awards denominated in
Plan |  | (Shares) |  | Each Calendar Year |  | (Shares) |  | shares (Shares) |  | cash (in dollars)
SIP |  | 15,000,000 |  |  |  |  | 2,000,000 |  |  | 750,000 |  |  | $ | 15,000,000 |
ICPKE |  | 14,199,796 |  |  | 2 | % |  | 3,000,000 |  |  |  |  |  |  |
Any portion of these awards that has not been granted may be carried over and used in any subsequent year. If any award lapses, the rights of the participant terminate, or, with respect to certain awards, is forfeited, the shares of PPL common stock underlying such an award are again available for grant. Shares delivered under the Plans may be in the form of authorized and unissued PPL common stock, common stock held in treasury by PPL or PPL common stock purchased on the open market (including private purchases) in accordance with applicable securities laws. Restricted Stock Units Restricted stock units are awards based on the fair value of PPL common stock on the date of grant. Actual PPL common shares will be issued upon completion of a restriction period, generally three years. Under the SIP, each restricted stock unit entitles the executive to accrue additional restricted stock units equal to the amount of quarterly dividends paid on PPL stock. These additional restricted stock units are deferred and payable in shares of PPL common stock at the end of the restriction period. Dividend equivalents on restricted stock unit awards granted under the ICPKE are currently paid in cash when dividends are declared by PPL. The fair value of restricted stock units granted is recognized on a straight-line basis over the service period or through the date at which the employee reaches retirement eligibility. The fair value of restricted stock units granted to retirement-eligible employees is recognized as compensation expense immediately upon the date of grant. Recipients of restricted stock units granted under the ICPKE may also be granted the right to receive dividend equivalents through the end of the restriction period or until the award is forfeited. Restricted stock units are subject to forfeiture or accelerated payout under the plan provisions for termination, retirement, disability and death of employees. Restrictions lapse on restricted stock units fully, in certain situations, as defined by each of the Plans. The weighted-average grant date fair value of restricted stock units granted was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 30.58 |  |  | $ | 35.30 |  |  | $ | 33.84 |
PPL Electric | 30.00 |  |  | 35.45 |  |  | 34.32 |
LKE | 30.98 |  |  | 35.25 |  |  | 33.73 |
Restricted stock unit activity for 2018 was:
| Restricted Shares/Units |  | Weighted- Average Grant Date Fair Value Per Share
PPL |  |  |
Nonvested, beginning of period | 1,291,649 |  |  | $ | 34.07 |
Granted | 369,308 |  |  | 30.58 |
Vested | (529,263 | ) |  | 32.97 |
Forfeited | (33,491 | ) |  | 33.30 |
Nonvested, end of period (a) | 1,098,203 |  |  | 33.45 |
PPL Electric |  |  |
Nonvested, beginning of period | 184,416 |  |  | $ | 34.20 |
Transfer between registrants | (2,906 | ) |  | 33.95 |
Granted | 76,051 |  |  | 30.00 |
Vested | (56,352 | ) |  | 32.39 |
Forfeited | (13,872 | ) |  | 33.50 |
Nonvested, end of period | 187,337 |  |  | 33.09 |
LKE |  |  |
Nonvested, beginning of period | 231,557 |  |  | $ | 34.01 |
Transfer between registrants | (1,284 | ) |  | 33.98 |
Granted | 58,377 |  |  | 30.98 |
Vested | (154,606 | ) |  | 33.38 |
Forfeited | (1,014 | ) |  | 29.52 |
Nonvested, end of period | 133,030 |  |  | 33.45 |
(a) | Excludes 45,298 restricted stock units for which restrictions lapsed for former PPL Energy Supply employees as a result of the June 2015 spinoff, but for which distribution will not occur until the end of the original restriction period of the awards.
Substantially all restricted stock unit awards are expected to vest. The total fair value of restricted stock units vesting for the years ended December 31 was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 16 |  |  | $ | 20 |  |  | $ | 30 |
PPL Electric | 2 |  |  | 3 |  |  | 3 |
LKE | 5 |  |  | 4 |  |  | 5 |
Performance Units - Total Shareowner Return Performance units based on relative Total Shareowner Return (TSR) are intended to encourage and reward future corporate performance. Performance units represent a target number of shares (Target Award) of PPL's common stock that the recipient would receive upon PPL's attainment of the applicable performance goal. Performance is determined based on TSR during a three-year performance period. At the end of the period, payout is determined by comparing PPL's performance to the TSR of the companies included in the Philadelphia Stock Exchange Utility Index. Awards are payable on a graduated basis based on thresholds that measure PPL's performance relative to peers that comprise the applicable index on which each year's awards are measured. Awards can be paid up to 200% of the Target Award or forfeited with no payout if performance is below a minimum established performance threshold. Dividends payable during the performance cycle accumulate and are converted into additional performance units and are payable in shares of PPL common stock upon completion of the performance period based on the determination of the CGNC of whether the performance goals have been achieved. Under the plan provisions, TSR performance units are subject to forfeiture upon termination of employment except for retirement, one year or more from commencement of the performance period, disability or death of an employee. The fair value of TSR performance units granted to retirement-eligible employees is recognized as compensation expense on a straight-line basis over a one-year period, the minimum vesting period required for an employee to be entitled to payout of the awards with no proration. For employees who are not retirement-eligible, compensation expense is recognized over the shorter of the three-year performance period or the period until the employee is retirement-eligible, with a minimum vesting and recognition period of one-year. If an employee retires before the one-year vesting period, the performance units are forfeited. Performance units vest on a pro rata basis, in certain situations, as defined by each of the Plans. The fair value of each performance unit granted was estimated using a Monte Carlo pricing model that considers stock beta, a risk-free interest rate, expected stock volatility and expected life. The stock beta was calculated comparing the risk of the individual securities to the average risk of the companies in the index group. The risk-free interest rate reflects the yield on a U.S. Treasury bond commensurate with the expected life of the performance unit. Volatility over the expected term of the performance unit is calculated using daily stock price observations for PPL and all companies in the index group and is evaluated with consideration given to prior periods that may need to be excluded based on events not likely to recur that had impacted PPL and the companies in the index group. PPL uses a mix of historic and implied volatility to value awards. The weighted-average assumptions used in the model were:
| 2018 |  | 2017 |  | 2016
Expected stock volatility | 17.60 | % |  | 17.40 | % |  | 19.60 | %
Expected life | 3 years |  |  | 3 years |  |  | 3 years |
The weighted-average grant date fair value of TSR performance units granted was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 38.26 |  |  | $ | 38.38 |  |  | $ | 35.74 |
PPL Electric | 38.37 |  |  | 38.37 |  |  | 35.68 |
LKE | 38.32 |  |  | 38.24 |  |  | 35.28 |
TSR performance unit activity for 2018 was:
| TSR Performance Units |  | Weighted- Average Grant Date Fair Value Per Share
PPL |  |  |
Nonvested, beginning of period | 978,231 |  |  | $ | 36.67 |
Granted | 263,593 |  |  | 38.26 |
Vested | (89,015 | ) |  | 34.78 |
Forfeited (a) | (312,685 | ) |  | 35.26 |
Nonvested, end of period | 840,124 |  |  | 37.89 |
PPL Electric |  |  |
Nonvested, beginning of period | 75,513 |  |  | $ | 37.00 |
Granted | 22,394 |  |  | 38.37 |
Vested | (5,817 | ) |  | 35.34 |
Forfeited (a) | (24,227 | ) |  | 36.27 |
Nonvested, end of period | 67,863 |  |  | 37.86 |
| TSR Performance Units |  | Weighted- Average Grant Date Fair Value Per Share
LKE |  |  |
Nonvested, beginning of period | 180,289 |  |  | $ | 36.69 |
Granted | 53,961 |  |  | 38.32 |
Vested | (14,547 | ) |  | 35.04 |
Forfeited (a) | (70,707 | ) |  | 35.91 |
Nonvested, end of period | 148,996 |  |  | 37.81 |
(a) | Primarily related to the forfeiture of 2015 performance units as performance during the period was below the minimum established performance threshold, which resulted in no payout.
The total fair value of TSR performance units vesting for the year ended December 31, 2018, 2017 and 2016 was $3 million, $8 million and $12 million for PPL and insignificant for PPL Electric and LKE. Performance Units - Return on Equity Beginning in 2017, PPL changed its executive compensation mix to add performance units based on achievement of a corporate Return on Equity (ROE). ROE performance units are intended to further align compensation with the company’s strategy and reward for future corporate performance. Payout of these performance units will be based on the calculated average of the annual corporate ROE for each year of the three-year performance period for PPL Corporation. ROE performance units represent a target number of shares (Target Award) of PPL's common stock that the recipient would receive upon PPL's attainment of the applicable ROE performance goal. ROE performance units can be paid up to 200% of the Target Award or forfeited with no payout if performance is below a minimum established performance threshold. Dividends payable during the performance cycle accumulate and are converted into additional performance units and are payable in shares of PPL common stock upon completion of the performance period based on the determination of the CGNC of whether the performance goals have been achieved. Under the plan provisions, these performance units are subject to forfeiture upon termination of employment except for retirement, disability or death of an employee. The fair value of each ROE performance unit is based on the closing price of PPL Common Stock on the date of grant. The fair value of ROE performance units is recognized on a straight-line basis over the service period or through the date at which the employee reaches retirement eligibility. The fair value awards granted to retirement-eligible employees is recognized as compensation expense immediately upon the date of grant. As these awards are based on performance conditions, the level of attainment is monitored each reporting period and compensation expense is adjusted based on the expected attainment level. The weighted-average grant date fair value of ROE performance units granted was:
| 2018 |  | 2017
PPL | $ | 32.21 |  |  | $ | 32.42 |
PPL Electric | 32.32 |  |  | 34.41 |
LKE | 32.28 |  |  | 34.29 |
ROE performance unit activity for 2018 was:
| ROE Performance Unit |  | Weighted- Average Grant Date Fair Value Per Share
PPL |  |  |
Nonvested, beginning of period | 96,928 |  |  | $ | 34.42 |
Granted | 234,664 |  |  | 32.21 |
Forfeited | (2,634 | ) |  | 32.96 |
Nonvested, end of period | 328,958 |  |  | 32.86 |
PPL Electric |  |  |
Nonvested, beginning of period | 8,696 |  |  | $ | 34.41 |
Granted | 19,899 |  |  | 32.32 |
Forfeited | (2,635 | ) |  | 32.96 |
Nonvested, end of period | 25,960 |  |  | 32.96 |
LKE |  |  |
Nonvested, beginning of period | 20,539 |  |  | $ | 34.29 |
Granted | 49,081 |  |  | 32.28 |
Nonvested, end of period | 69,620 |  |  | 32.87 |
Stock Options PPL's CGNC eliminated the use of stock options due to changes in its long-term incentive mix beginning in January 2014. Under the Plans, stock options had been granted with an option exercise price per share not less than the fair value of PPL's common stock on the date of grant. Options outstanding at December 31, 2018, are fully vested. All options expire no later than 10 years from the grant date. The options become exercisable immediately in certain situations, as defined by each of the Plans. Stock option activity for 2018 was:
| Number of Options |  | Weighted Average Exercise Price Per Share |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Total Intrinsic Value
PPL |  |  |  |  |  |  |
Outstanding at beginning of period | 3,762,183 |  |  | $ | 29.42 |  |  |  |  |
Exercised | (151,750 | ) |  | 28.43 |  |  |  |  |
Forfeited | (695,908 | ) |  | 42.87 |  |  |  |  |
Outstanding and exercisable at end of period | 2,914,525 |  |  | 26.26 |  |  | 3.4 |  | $ | 6 |
For 2018, 2017 and 2016, PPL received $5 million, $19 million and $52 million in cash from stock options exercised. The related income tax benefits realized were not significant. The total intrinsic value of stock options exercised for 2018 was insignificant and was $8 million and $18 million for 2017 and 2016. Compensation Expense Compensation expense for restricted stock, restricted stock units, performance units and stock options accounted for as equity awards, which for PPL Electric and LKE includes an allocation of PPL Services' expense, was:
| 2018 |  | 2017 |  | 2016
PPL | $ | 25 |  |  | $ | 32 |  |  | $ | 27 |
PPL Electric | 10 |  |  | 18 |  |  | 16 |
LKE | 8 |  |  | 8 |  |  | 7 |
The income tax benefit related to above compensation expense was as follows:
| 2018 |  | 2017 |  | 2016
PPL | $ | 10 |  |  | $ | 13 |  |  | $ | 12 |
PPL Electric | 3 |  |  | 8 |  |  | 7 |
LKE | 2 |  |  | 3 |  |  | 3 |
At December 31, 2018, unrecognized compensation expense related to nonvested stock awards was:
| Unrecognized Compensation Expense |  | Weighted- Average Period for Recognition
PPL | $ | 10 |  |  | 1.6
PPL Electric | 2 |  |  | 1.7
LKE | 1 |  |  | 1.4

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