XML 40 R24.htm IDEA: XBRL DOCUMENT
v3.22.4

Share-Based Compensation | 12 Months Ended
--- | ---
Dec. 31, 2022
Share-Based Payment Arrangement, Noncash Expense [Abstract] |
Share-based Compensation | SHARE-BASED COMPENSATION Share-based compensation expense is charged to salaries and benefits expense on the Consolidated Statements of Income. The components of share-based compensation expense for all share-based compensation plans and related tax benefits are as follows:
(in millions) |  |  |  |  |
Years Ended December 31 | 2022 |  | 2021 |  | 2020
Total share-based compensation expense | $ | 60 |  |  | $ | 41 |  |  | $ | 24 |
Related tax benefits recognized in net income | $ | 14 |  |  | $ | 10 |  |  | $ | 6 |
The following table summarizes unrecognized compensation expense for all share-based plans.
(dollar amounts in millions) | December 31, 2022
Total unrecognized share-based compensation expense | $ | 38 |
Weighted-average expected recognition period (in years) | 2.1 |
The Corporation has share-based compensation plans under which it awards shares of restricted stock units to executive officers, directors and key personnel and stock options to executive officers and key personnel of the Corporation and its subsidiaries. Restricted stock units fully vest after a period ranging from three years to five years, and stock options fully vest after four years. A majority of share-based compensation awards include a retirement eligibility clause where qualified employees are exempt from the service requirements of the award. This generally results in the recognition of compensation expense at the grant date for retirement eligible employees. The maturity of each option is determined at the date of grant; however, no options may be exercised later than ten years from the date of grant. The options may have restrictions regarding exercisability. The plans provide for a grant of up to 7.7 million common shares, plus shares under certain plans that are forfeited, expire or are canceled, which become available for re-grant. At December 31, 2022, over 4.5 million shares were available for grant. The Corporation used a binomial model to value stock options granted in the periods presented. Option valuation models require several inputs, including the expected stock price volatility, and changes in input assumptions can materially affect the fair value estimates. The model used may not necessarily provide a reliable single measure of the fair value of stock options. The risk-free interest rate assumption used in the binomial option-pricing model as outlined in the table below was based on the federal ten-year treasury interest rate. The expected dividend yield was based on the historical and projected long-term dividend yield patterns of the Corporation’s common shares. Expected volatility assumptions considered both the historical volatility of the Corporation’s common stock over a ten-year period and implied volatility based on actively traded options on the Corporation’s common stock with pricing terms and trade dates similar to the stock options granted. Expected option life was based on historical exercise activity over the contractual term of the option grant (ten years), excluding certain forced transactions. The estimated weighted-average grant-date fair value per option and the underlying binomial option-pricing model assumptions are summarized in the following table:
Years Ended December 31 | 2022 |  | 2021 |  | 2020
Weighted-average grant-date fair value per option | $ | 25.31 |  |  | $ | 18.36 |  |  | $ | 13.03 |
Weighted-average assumptions: |  |  |  |  |
Risk-free interest rates | 1.78 | % |  | 1.05 | % |  | 1.65 | %
Expected dividend yield | 4.00 |  |  | 4.00 |  |  | 4.14 |
Volatility | 34 |  |  | 39 |  |  | 27 |
Expected option life (in years) | 8.0 |  |  | 7.8 |  |  | 8.4 |
A summary of the Corporation’s stock option activity and related information for the year ended December 31, 2022 follows:
|  |  | Weighted-Average |  |
| Number of Options (in thousands) |  | Exercise Price per Share |  | Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in millions)
Outstanding-January 1, 2022 | 2,244 |  |  | $ | 57.50 |  |  |  |  |
Granted | 183 |  |  | 92.58 |  |  |  |  |
Forfeited or expired | (32) |  |  | 76.55 |  |  |  |  |
Exercised | (387) |  |  | 50.64 |  |  |  |  |
Outstanding-December 31, 2022 | 2,008 |  |  | 61.71 |  |  | 5.1 |  |  | $ | 22 |
Exercisable-December 31, 2022 | 1,379 |  |  | $ | 57.20 |  |  | 3.9 |  |  | $ | 20 |
The aggregate intrinsic value of outstanding options shown in the table above represents the total pretax intrinsic value at December 31, 2022, based on the Corporation’s closing stock price of $66.85 at December 31, 2022. The total intrinsic value of stock options exercised was $17 million, $29 million and $6 million for the years ended December 31, 2022, 2021 and 2020, respectively. A summary of the Corporation’s restricted stock activity and related information for the year ended December 31, 2022 follows:
| Number of Shares (in thousands) |  | Weighted-Average Grant-Date Fair Value per Share
Outstanding-January 1, 2022 | 41 |  | 61.64 |
Forfeited | — |  |  | — |
Vested | (41) |  |  | 67.69 |
Outstanding-December 31, 2022 | — |  |  | $ | — |
The total fair value of restricted stock awards that fully vested was $4 million, $8 million and $17 million for the years ended December 31, 2022, 2021 and 2020, respectively. A summary of the Corporation's restricted stock unit activity and related information for the year ended December 31, 2022 follows:
| Service-Based Units |  | Performance-Based Units
| Number of Units (in thousands) |  | Weighted-Average Grant-Date Fair Value per Share |  | Number of Units (in thousands) |  | Weighted-Average Grant-Date Fair Value per Share
Outstanding-January 1, 2022 | 1,346 |  |  | $ | 59.18 |  |  | 816 |  |  | $ | 63.12 |
Granted | 361 |  |  | 84.14 |  |  | 182 |  |  | 87.45 |
Forfeited | (70) |  |  | 65.24 |  |  | (34) |  |  | 70.40 |
Vested (a) | (232) |  |  | 65.36 |  |  | (220) |  |  | 79.13 |
Outstanding-December 31, 2022 | 1,405 |  |  | 64.27 |  |  | 744 |  |  | 64.01 |
(a) Includes performance-based units valued at zero, as they did not meet the minimum performance threshold. The total fair value of restricted stock units that fully vested was $19 million, $21 million and $12 million for the years ended December 31, 2022, 2021 and 2020, respectively. The Corporation expects to satisfy the exercise of stock options, the vesting of restricted stock units and future grants of restricted stock by issuing shares of common stock out of treasury. At December 31, 2022, the Corporation held 97 million shares in treasury. For further information on the Corporation’s share-based compensation plans, refer to Note 1.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI https://asc.fasb.org/topic&trid=2228938 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (l) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a)(1) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2)(i) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2) -URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_ShareBasedCompensationAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration