13. Share-Based Payments

Defined Contribution Plans—Substantially all permanent domestic employees are eligible to participate in defined contribution plans provided by the Company. Under these plans, participants may make contributions into a variety of funds, including a fund that is fully invested in Company stock. Employees are not required to allocate any funds to Company stock; however, the Company does provide an annual Company match in AECOM shares. Employees may generally reallocate their account balances on a daily basis; however, employees classified as insiders are restricted under the Company’s insider trading policy. Compensation expense relating to these employer contributions related to AECOM stock under defined contribution plans for fiscal years ended September 30, 2018, 2017 and 2016 was $32.3 million, $32.9 million, and $26.8 million, respectively.

Stock Incentive Plans—Under the 2016 Stock Incentive Plan, the Company has up to 12.6 million securities remaining available for future issuance as of September 30, 2018. Stock options may be granted to employees and non‑employee directors with an exercise price not less than the fair market value of the stock on the date of grant. Unexercised options expire seven years after date of grant.

During the three years in the period ended September 30, 2018, option activity was as follows:



	Number of	Weighted
	Options	Average
	(in millions)	Exercise Price
Balance, September 30, 2015	1.3		28.26
Granted	—		—
Exercised	(0.4)		23.96
Cancelled	—		—
Balance, September 30, 2016	0.9		30.36
Granted	—		—
Exercised	(0.2)		26.42
Cancelled	—		—
Balance, September 30, 2017	0.7		31.11
Granted	—		—
Exercised	(0.1)		27.79
Cancelled	—		—
Balance, September 30, 2018	0.6		31.62
Exercisable as of September 30, 2016	0.3		26.99
Exercisable as of September 30, 2017	0.1		27.79
Exercisable as of September 30, 2018	—		N/A

The following table summarizes information concerning outstanding and exercisable options as of September 30, 2018:

Options Outstanding

Options Exercisable

Number

Outstanding

Weighted

Exercisable

Weighted

as of

Average

Weighted

Aggregate

as of

Average

Weighted

September 30,

Remaining

Average

Intrinsic

September 30,

Remaining

Average

2018

Contractual

Exercise

Value

2018

Contractual

Exercise

(in millions)

Life

Price

(in millions)

Life

Price

Exercise Price

$31.62

0.6

5.43

31.62

0.7

—

The aggregate intrinsic value of stock options exercised during the years ended September 30, 2018, 2017 and 2016 was $0.9 million, $1.2 million, and $0.6 million, respectively.

The fair value of the Company’s employee stock option awards is estimated on the date of grant. The expected term of awards granted represents the period of time the awards are expected to be outstanding. The risk-free interest rate is based on U.S. Treasury bond rates with maturities equal to the expected term of the option on the grant date. The Company uses historical data as a basis to estimate the probability of forfeitures. No stock options were granted during the years ended September 30, 2018 and 2017.

The Company grants stock units to employees under its Performance Earnings Program (PEP), whereby units are earned and issued dependent upon meeting established cumulative performance objectives and vest over a three-year service period. Additionally, the Company issues restricted stock units to employees which are earned based on service conditions. The grant date fair value of PEP awards and restricted stock unit awards is that day’s closing market price of the Company’s common stock. The weighted average grant date fair value of PEP awards was $37.69, $38.15, and $29.91 during the years ended September 30, 2018, 2017 and 2016, respectively. The weighted average grant date fair value of restricted stock unit awards was $36.83, $37.96, and $29.82 during the years ended September 30, 2018, 2017 and 2016, respectively. Total compensation expense related to these share-based payments including stock options was $73.1 million, $83.8 million, and $73.4 million during the years ended September 30, 2018, 2017 and 2016, respectively. Unrecognized compensation expense related to total share-based payments outstanding as of September 30, 2018 and 2017 was $94.3 million and $96.8 million, respectively, to be recognized on a straight-line basis over the awards’ respective vesting periods which are generally three years.