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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2024
Share-based Payment Arrangements [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION ACCOUNTING POLICY Stock option plans Cash-settled share appreciation rights (SARs) are attached to all stock options granted under our employee stock option plan. This feature allows the option holder to choose to receive a cash payment equal to the intrinsic value of the option (the amount by which the market price of the Class B Non-Voting Share exceeds the exercise price of the option on the exercise date) instead of exercising the option to acquire Class B Non-Voting Shares. We classify all outstanding stock options with cash settlement features as liabilities and carry them at their fair value, determined using the Black-Scholes option pricing model or a trinomial option pricing model, depending on the nature of the share-based award. We remeasure the fair value of the liability each period and amortize it to "operating costs" or "restructuring, acquisition and other", as applicable, using graded vesting, either over the vesting period or to the date an employee is eligible to retire (whichever is shorter). Restricted share unit (RSU) and deferred share unit (DSU) plans We recognize outstanding RSUs and DSUs as liabilities, measuring the liabilities and compensation costs based on the awards' fair values, which are based on the market price of the Class B Non-Voting Shares, and recognizing them as charges to "operating costs" over the vesting period of the awards. If an award's fair value changes after it has been granted and before the exercise date, we recognize the resulting changes in the liability within "operating costs" or "restructuring, acquisition and other", as applicable, in the year the change occurs. For RSUs, the payment amount is established as of the vesting date. For DSUs, the payment amount is established as of the exercise date. Employee share accumulation plan Employees voluntarily participate in the share accumulation plan by contributing a specified percentage of their regular earnings. We match employee contributions up to a certain amount and recognize our contributions as a compensation expense in the year we make them. Expenses relating to the employee share accumulation plan are included in "operating costs". Wealth+ program Certain employees voluntarily participate in a Wealth+ program, which allows them to exchange some or all of their annual cash bonus and receive RSUs. We match employee deferrals up to a certain amount. Expenses relating to the Wealth+ program are included in "operating costs". ESTIMATES Significant management estimates are used to determine the fair value of stock options. The table below shows the weighted average fair value of stock options granted during 2024 and 2023 and the principal assumptions used in applying the Black-Scholes model for granted options to determine their fair value at the grant date.
|  | Years ended December 31
|  | 2024 | 2023
Weighted average fair value |  | $8.08 |  | $12.07 |
Risk-free interest rate |  | 3.4 | % | 3.4 | %
Dividend yield |  | 3.6 | % | 3.2 | %
Volatility of Class B Non-Voting Shares |  | 24.2 | % | 23.4 | %
Weighted average expected life |  | 5.4 years | 5.5 years
Volatility has been estimated based on the actual trading statistics of our Class B Non-Voting Shares. STOCK-BASED COMPENSATION EXPENSE Below is a summary of our stock-based compensation expense, which is included in employee salaries and benefits expense.
|  | Years ended December 31
(In millions of dollars) |  | 2024 | 2023
Stock options |  | (58) |  | 24 |
Restricted share units |  | 20 |  | 32 |
Deferred share units |  | (10) |  | 2 |
Equity derivative effect, net of interest receipt |  | 102 |  | 7 |
Total stock-based compensation expense |  | 54 |  | 65 |
As at December 31, 2024, we had a total liability recognized at its fair value of $103 million (2023 - $224 million) related to stock-based compensation, including stock options, RSUs, and DSUs. The current portion of this is $72 million (2023 - $177 million) and is included in "accounts payable and accrued liabilities". The long-term portion of this is $31 million (2023 - $47 million) and is included in "other long-term liabilities" (see note 24). The total intrinsic value of vested liabilities, which is the difference between the exercise price of the share-based awards and the trading price of the Class B Non-Voting Shares for all vested share-based awards, as at December 31, 2024 was $32 million (2023 - $67 million). We paid $70 million in 2024 (2023 - $75 million) to holders of stock options, RSUs, and DSUs upon exercise using the cash settlement feature, representing a weighted average share price on the date of exercise of $56.88 (2023 - $64.21). STOCK OPTIONS Options to purchase our Class B Non-Voting Shares on a one-for-one basis may be granted to our employees, directors, and officers by the Board or our Human Resources Committee. There are 65 million options authorized under various plans; each option has a term of seven to ten years. The vesting period is generally graded vesting over four years; however, the Human Resources Committee may adjust the vesting terms on the grant date. The exercise price is typically equal to the fair market value of the Class B Non-Voting Shares, determined as the five-day average before the grant date as quoted on the TSX. Performance options We did not grant performance-based options in 2024 (2023 - nil). Certain performance options granted in prior years have certain non-market vesting conditions related to the Shaw Transaction, including the achievement of certain preset integration-related milestones by the second anniversary of closing the Shaw Transaction. As at December 31, 2024, we had 2,583,435 performance options (2023 - 2,740,952) outstanding. The outstanding options that were granted prior to 2022 vest on a graded basis over four years provided certain targeted stock prices are met on or after each anniversary date. Summary of stock options Below is a summary of the stock option plans, including performance options.
| Year ended December 31, 2024 | Year ended December 31, 2023
(In number of units, except prices) | Number of options | Weighted average exercise price | Number of options | Weighted average exercise price
Outstanding, beginning of year | 10,593,645 |  | $63.88 |  | 9,860,208 |  | $63.58 |
Granted | 353,105 |  | $61.39 |  | 1,594,879 |  | $64.86 |
Exercised | (153,615) |  | $53.04 |  | (329,877) |  | $54.90 |
Forfeited | (1,085,288) |  | $64.44 |  | (531,565) |  | $66.92 |
Outstanding, end of year | 9,707,847 |  | $63.89 |  | 10,593,645 |  | $63.88 |
Exercisable, end of year | 6,135,190 |  | $63.69 |  | 4,749,678 |  | $62.86 |
Below is a summary of the range of exercise prices, the weighted average exercise price, and the weighted average remaining contractual life as at December 31, 2024.
| Options outstanding | Options exercisable
Range of exercise prices | Number outstanding | Weighted average remaining contractual life (years) | Weighted average exercise price | Number exercisable | Weighted average exercise price
$44.97 - $44.99 | 75,055 |  | 0.17 | $44.97 |  | 75,055 |  | $44.97 |
$45.00 - $49.99 | 119,082 |  | 1.16 | $49.95 |  | 119,082 |  | $49.95 |
$55.00 - $59.99 | 1,446,572 |  | 5.16 | $58.46 |  | 1,226,855 |  | $58.46 |
$60.00 - $64.99 | 2,537,699 |  | 5.04 | $62.29 |  | 1,691,760 |  | $62.49 |
$65.00 - $69.99 | 4,768,804 |  | 6.79 | $65.58 |  | 2,261,803 |  | $65.65 |
$70.00 - $73.00 | 760,635 |  | 3.58 | $73.00 |  | 760,635 |  | $73.00 |
| 9,707,847 |  | 5.72 | $63.89 |  | 6,135,190 |  | $63.69 |
Unrecognized stock-based compensation expense as at December 31, 2024 related to stock option plans was $1 million (2023 - $14 million) and will be recognized in net income within periods of up to the next four years as the options vest. RESTRICTED SHARE UNITS The RSU plan allows employees, directors, and officers to participate in the growth and development of Rogers. Under the terms of the plan, RSUs are issued to the participant and the units issued vest over a period of up to three years from the grant date. On the vesting date, we redeem all of the participants' RSUs in cash or by issuing one Class B Non-Voting Share for each RSU. We have reserved 4,000,000 Class B Non-Voting Shares for issue under this plan. Performance RSUs We granted 378,296 performance-based RSUs to certain key employees in 2024 (2023 - 719,851). The performance RSUs granted in 2023 have certain non-market vesting conditions related to the Shaw Transaction, including the achievement of certain preset integration-related milestones by the second anniversary of closing the Shaw Transaction. For performance RSUs granted prior to 2023, the number of units that vest and will be paid three years from the grant date will be within 0% to 100% of the initial number granted and reinvested dividends based upon the achievement of certain annual targets. Summary of RSUs Below is a summary of the RSUs outstanding, including performance RSUs.
|  | Years ended December 31
(In number of units) |  | 2024 | 2023
Outstanding, beginning of year |  | 2,551,728 |  | 2,402,489 |
Granted and reinvested dividends |  | 1,246,949 |  | 1,518,926 |
Exercised |  | (943,096) |  | (856,212) |
Forfeited |  | (407,357) |  | (513,475) |
Outstanding, end of year |  | 2,448,224 |  | 2,551,728 |
Unrecognized stock-based compensation expense as at December 31, 2024 related to these RSUs was $35 million (2023 - $57 million) and will be recognized in net income over periods of up to the next three years as the RSUs vest. DEFERRED SHARE UNITS The DSU plan allows directors, certain key executives, and other senior management to elect to receive certain types of compensation in DSUs. Under the terms of the plan, DSUs are issued to the participant and the units issued cliff vest over a period of up to three years from the grant date. Performance DSUs We granted 6,157 performance-based DSUs to certain key executives in 2024 (2023 - 6,190) through reinvested dividends. All performance-based DSUs currently outstanding are fully vested. Summary of DSUs Below is a summary of the DSUs outstanding, including performance DSUs.
|  | Years ended December 31
(In number of units) |  | 2024 | 2023
Outstanding, beginning of year |  | 956,410 |  | 1,139,884 |
Granted and reinvested dividends |  | 231,590 |  | 80,510 |
Exercised |  | (279,098) |  | (259,441) |
Forfeited |  | (224) |  | (4,543) |
Outstanding, end of year |  | 908,678 |  | 956,410 |
Unrecognized stock-based compensation expense related to granted DSUs as at December 31, 2024 was $5 million (2023 - nil) and will be recognized in net income over the next three years as the executive DSUs vest. EMPLOYEE SHARE ACCUMULATION PLAN Participation in the plan is voluntary. Employees can contribute up to 15% of their regular earnings through payroll deductions (up to an annual maximum contribution of $25 thousand). The plan administrator purchases Class B Non-Voting Shares on a bi-weekly basis on the open market on behalf of the employee. On a bi-weekly basis, we make a contribution of 25% to 50% of the employee's contribution that period and the plan administrator uses this amount to purchase additional shares on behalf of the employee. We recognize our contributions made as a compensation expense. Compensation expense related to the employee share accumulation plan was $61 million in 2024 (2023 - $57 million). EQUITY DERIVATIVES We have entered into equity derivatives to hedge a portion of our stock-based compensation expense (see note 19) and recognized a $102 million expense (2023 - $7 million expense) in stock-based compensation expense for these derivatives.

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