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Equity Based Compensation | 12 Months Ended
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Dec. 31, 2021
Share-based Payment Arrangement [Abstract] |
Equity Based Compensation | Equity Based Compensation The Company adopted the RGA Flexible Stock Plan (the “Plan”) in February 1993, as amended, and the Flexible Stock Plan for Directors (the “Directors Plan”) in January 1997, as amended, (collectively, the “Stock Plans”). The Stock Plans provide for the award of benefits (collectively “Benefits”) of various types, including stock options, stock appreciation rights (“SARs”), restricted stock, performance shares, cash awards, and other stock-based awards, to key employees, officers, directors and others performing significant services for the benefit of the Company or its subsidiaries. As of December 31, 2021, shares authorized for the granting of Benefits under the Plan and the Directors Plan totaled 16,460,077 and 462,500 respectively. The Company uses treasury shares or shares made available from authorized but unissued shares to support the future exercise of options or settlement of awards granted under its stock plans. Equity-based compensation expense of $55 million, $(12) million, and $39 million related to grants or awards under the Stock Plans was recognized in 2021, 2020 and 2019, respectively. The equity compensation credit for the year ended December 31, 2020, is attributable to the reduction in the estimated financial performance measures associated with performance-based stock awards, primarily due to the adverse impact of COVID-19 on the Company’s financial results. Equity-based compensation expense is principally related to the issuance of performance contingent restricted units, stock appreciation rights and restricted stock. In general, stock awards granted under the Plan become exercisable over vesting periods ranging from one to four years. SARs are generally granted with a conversion price equal to the stock’s fair value at the date of grant and expire 10 years after the date of grant. There are no stock options outstanding under the Directors Plan during the periods presented. Information with respect to grants under the Stock Plans are as follows. Stock Options and Stock Appreciation Rights The following table presents a summary of options and SARs activity:
|  | Number of Options and SARs |  | Weighted-Average Exercise/Conversion Price |  | Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2020 |  | 2,168,395 |  |  | $ | 102.30 |  |  |
Granted |  | 200,239 |  |  | $ | 129.01 |  |  |
Exercised |  | (144,042) |  |  | $ | 60.47 |  |  |
Forfeited |  | (1,878) |  |  | $ | 129.01 |  |  |
Outstanding at December 31, 2021 |  | 2,222,714 |  |  | $ | 107.39 |  |  | $ | 28.7 |
Awards exercisable |  | 1,800,569 |  |  | $ | 103.30 |  |  | $ | 28.7 |
The intrinsic value of awards exercised was $8 million, $15 million, and $31 million for 2021, 2020 and 2019, respectively.
|  | Awards Outstanding |  | Awards Exercisable
Range of Exercise Prices |  | Number Outstanding as of 12/31/2021 |  | Weighted-Average Remaining Contractual Life (years) |  | Weighted- Average Exercise Price |  | Number Exercisable as of 12/31/2021 |  | Weighted-Average Exercise Price
$50.00 – $89.99 |  | 368,754 |  |  | 1.3 |  | $ | 64.03 |  |  | 368,754 |  |  | $ | 64.03 |
$90.00 – $99.99 |  | 703,305 |  |  | 3.8 |  | $ | 92.55 |  |  | 703,305 |  |  | $ | 92.55 |
$100.00 – $139.99 |  | 805,743 |  |  | 7.8 |  | $ | 122.90 |  |  | 430,718 |  |  | $ | 123.44 |
$140.00 + |  | 344,912 |  |  | 6.7 |  | $ | 147.80 |  |  | 297,792 |  |  | $ | 148.20 |
Totals |  | 2,222,714 |  |  | 5.3 |  | $ | 107.39 |  |  | 1,800,569 |  |  | $ | 103.30 |
The following table presents the weighted average assumptions used to determine the fair value of SARs issued:
For the years ended December 31, |  | 2021 |  | 2020 |  | 2019
Dividend yield |  | 2.17 | % |  | 2.37 | % |  | 1.65 | %
Risk-free rate of return |  | 1.04 | % |  | 0.69 | % |  | 2.67 | %
Expected volatility |  | 34.5 | % |  | 18.8 | % |  | 18.2 | %
Expected life (years) |  | 6.3 |  | 7.0 |  | 6.0
Weighted average exercise price of stock options granted |  | $ | 129.01 |  |  | $ | 117.85 |  |  | $ | 145.25 |
Weighted average fair value of stock options granted |  | $ | 34.93 |  |  | $ | 15.14 |  |  | $ | 26.59 |
The Black-Scholes model was used to determine the fair value recognized in the financial statements of SARs that have been granted. The Company used daily historical volatility when calculating a SAR’s value. The benchmark rate is based on observed interest rates for instruments with maturities similar to the expected term of the stock options. Dividend yield is determined based on historical dividend distributions compared to the price of the underlying common stock as of the valuation date and held constant over the life of the stock options. The Company estimated expected life using the historical average years to exercise or cancellation. Performance Contingent Awards Performance contingent awards include both Performance Contingent Shares (“PCS”) and Performance Share Units (“PSU”). •Performance Contingent Shares, are units that, if they vest, are multiplied by a performance factor to produce a number of final units that are paid in the Company’s common stock. Each PCS represents the right to receive up to two shares of Company’s common stock, depending on the results of certain performance measures. •Performance Share Units, are units that, if they vest, are paid in the Company’s common stock. Each PSU represents the right to receive one share of Company common stock, depending on the results of certain performance measures. The compensation expense related to each type of performance continent award is recognized ratably over the requisite performance period. Performance contingent awards are accounted for as equity awards, but are not credited with dividend-equivalents for actual dividends paid on the Company’s common stock during the performance period. Restricted Stock Units In general, restricted stock units (“RSUs”) become payable at the end of a two or three-year vesting period. Each RSU, if they vest, represents the right to receive one share of Company common stock. RSUs awarded under the plan generally have no strike price and are included in the Company’s shares outstanding. The following table presents a summary of Performance Share and Restricted Stock Unit activity:
| Performance Contingent Awards |  | Restricted Stock Units |  |
Outstanding at December 31, 2020 | 291,129 |  |  | 76,390 |  |  |
Granted | 167,862 |  |  | 328,491 |  |  |
Change in units based on performance factor | (117,589) |  |  | — |  |  |
Paid | — |  |  | (18,487) |  |  |
Forfeited | (997) |  |  | (6,506) |  |  |
Outstanding at December 31, 2021 (1) | 340,405 |  |  | 379,888 |  |  |
(1)Amount outstanding at December 31, 2021, includes the amount of shares to be issued under RSUs expected to vest and number of shares to be issued under performance continent awards at target performance. The amount of shares do not reflect potential increases or decreases that may result from the performance factor results except for the 2019 – 2021 grants which vested as of December 31, 2021. During 2021, the Company issued 167,862 performance contingent awards at a weighted average fair value per unit of $129.01. As of December 31, 2021, the total compensation cost of non-vested awards not yet recognized in the financial statements was $21.0 million. It is estimated that these costs will vest over a weighted average period of 0.7 years. The majority of the awards granted each year under the board-approved incentive compensation package and Directors Plan are made in the first quarter of each year.

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