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STOCK-BASED COMPENSATION PLANS | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION PLANS | STOCK-BASED COMPENSATION PLANS The Company has various equity incentive plans under which it may grant stock awards to directors, officers and employees. The Company also has an employee stock purchase plan (ESPP). The table below summarizes the components of total stock-based compensation (in millions):
| 2023 |  | 2022 |  | 2021
Stock options | $ | 2 |  |  | $ | 3 |  |  | $ | 5 |
Stock awards(a) | 39 |  |  | 14 |  |  | 20 |
Deferred stock awards | 1 |  |  | 1 |  |  | 1 |
Employee stock purchase plan | 17 |  |  | 17 |  |  | 18 |
Stock-based compensation | $ | 59 |  |  | $ | 35 |  |  | $ | 44 |
Tax benefit related to stock-based compensation | $ | 14 |  |  | $ | 9 |  |  | $ | 11 |
(a) In 2023, the Company, with approval by the Compensation and Leadership Development Committee of the Board of Directors, granted additional stock awards to address equity value forfeited by certain executives due to the compensation limitations of the CARES Act. Unrecognized stock-based compensation for non-vested options and awards and the weighted-average period the expense will be recognized (dollars in millions):
| Amount |  | Weighted-Average Period
Stock options | $ | 1 |  |  | 0
Stock awards | 26 |  |  | 1.6
Unrecognized stock-based compensation | $ | 27 |  |  | 1.6
The Company is authorized to issue 20 million shares of common stock under these plans, of which 9 million shares remain available for future grants of either options or stock awards as of December 31, 2023. Stock Options Stock options to purchase common stock are granted at the fair market value of the stock on the date of grant. The stock options granted have terms of up to ten years. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants:
| 2023 |  | 2022 |  | 2021
Expected volatility | 46 | % |  | 44 | % |  | 43 | %
Expected term | 6 years |  | 6 years |  | 6 years
Risk-free interest rate | 3.64 | % |  | 1.91 | % |  | 0.68 | %
Expected dividend yield | — |  |  | — |  |  | — |
Weighted-average grant date fair value per share | $ | 16.77 |  |  | $ | 23.36 |  |  | $ | 23.66 |
Estimated fair value of options granted (millions) | $ | 1 |  |  | $ | 4 |  |  | $ | 4 |
The expected market price volatility and expected term are based on historical results. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected dividend yield is based on the estimated weighted average dividend yield over the expected term. The expected forfeiture rates are based on historical experience. The tables below summarize stock option activity for the year ended December 31, 2023:
| Shares |  | Weighted- Average Exercise Price Per Share |  | Weighted- Average Contractual Life (Years) |  | Aggregate Intrinsic Value (in millions)
Outstanding, December 31, 2022 | 1,230,757 |  |  | $ | 61.45 |  |  | 5.6 |  | $ | 1 |
Granted | 50,120 |  |  | 58.54 |  |  |  |  |
Exercised | (24,996) |  |  | 35.44 |  |  |  |  |
Canceled | (86,475) |  |  | 68.95 |  |  |  |  |
Forfeited or expired | (7,976) |  |  | 56.37 |  |  |  |  |
Outstanding, December 31, 2023 | 1,161,430 |  |  | $ | 61.36 |  |  | 5.1 |  | $ | — |
Exercisable, December 31, 2023 | 883,061 |  |  | $ | 62.84 |  |  | 4.5 |  | $ | — |
Vested or expected to vest, December 31, 2023 | 1,161,430 |  |  | $ | 61.36 |  |  | 5.1 |  | $ | — |
(in millions) | 2023 |  | 2022 |  | 2021
Intrinsic value of option exercises | $ | — |  |  | $ | — |  |  | $ | 3 |
Fair value of options vested | $ | 4 |  |  | $ | 4 |  |  | $ | 4 |
Cash received from stock option exercises was not material for the year ended December 31, 2023. Stock Awards Restricted Stock Units (RSUs) are awarded to eligible employees and entitle the grantee to receive shares of common stock at the end of the vesting period. The fair value of the RSUs is based on the stock price on the date of grant. Generally, RSUs “cliff vest” after three years, or the period from the date of grant to the employee’s retirement eligibility, and expense is recognized accordingly. Performance Share Units (PSUs) are awarded to certain executives to receive shares of common stock if specific performance goals and market conditions are achieved. There are several tranches of PSUs which vest when performance goals and market conditions are met. The following table summarizes information about outstanding stock awards:
| Number of Units |  | Weighted-Average Grant Date Fair Value |  | Weighted- Average Contractual Life (Years) |  | Aggregate Intrinsic Value (in millions)
Non-vested, December 31, 2022 | 106,760 |  |  | $ | 53.97 |  |  | 2.9 |  | $ | 11 |
Granted | 1,245,008 |  |  | 51.99 |  |  |  |  |
Vested | (389,231) |  |  | 51.03 |  |  |  |  |
Forfeited | (93,753) |  |  | 61.97 |  |  |  |  |
Non-vested, December 31, 2023 | 868,784 |  |  | $ | 51.95 |  |  | 1.7 |  | $ | 34 |
Deferred Stock Awards Deferred Stock Units (DSUs) are awarded to members of the Board of Directors as part of their retainers. The underlying common shares are issued upon retirement from the Board, but require no future service period. As a result, the entire intrinsic value of the awards is expensed on the date of grant. Employee Stock Purchase Plan The ESPP allows employees to purchase common stock at 85% of the stock price on the first day of the offering period or the specified purchase date, whichever is lower. Employees may contribute up to 10% of their base earnings during the offering period to purchase stock. Employees purchased 1,855,608, 1,292,489 and 1,254,393 shares in 2023, 2022 and 2021 under the ESPP.

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