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Share-Based Compensation

12 Months Ended

Dec. 31, 2019

Note 17—Share-Based Compensation

Overview

We have a long-term incentive plan (the “Long-Term Incentive Plan”) for executives, key employees and non-employee directors under which awards can be granted in the form of restricted share units, restricted shares, stock options, stock appreciation rights and cash performance awards. Awards may be granted as service awards that are earned over a defined service period or as performance awards that are earned based on the achievement of certain market factors or performance targets or a combination of market factors and performance targets. Our compensation committee of our board of directors determines the terms and conditions of the awards granted under the Long-Term Incentive Plan. At December 31, 2019, we had 32.7 million shares authorized and 7.4 million shares available to be granted under the Long-Term Incentive Plan. At December 31, 2019, the total unrecognized compensation cost related to our unvested share-based awards was $42 million, which is expected to be recognized over a weighted-average period of 1.7 years.

Service awards typically vest either in three equal annual installments beginning on the first anniversary date of the grant or in an aggregate installment at the end of the stated vesting period. Performance awards typically are subject to a three-year measurement period during which the number of options or shares to be issued remains uncertain until the end of the measurement period, at which time the awarded number of options or shares to be issued is determined. The performance awards typically vest in one aggregate installment following the determination date. Stock options are subject to a stated vesting period and, once vested, typically have a seven-year term during which they are exercisable.

Service awards

Restricted share units—A restricted share unit is a notional unit that is equal to one share but has no voting rights until the underlying share is issued. The following table summarizes unvested activity for service-based units granted under our incentive plans during the year ended December 31, 2019:


	Number	Weighted-average
	of	grant-date fair value
	units	per unit
Unvested at January 1, 2019	4,077,992	$	10.40
Granted	3,044,494		8.33
Vested	(2,224,030)		10.40
Forfeited	(178,878)		9.01
Unvested at December 31, 2019	4,719,578	$	9.11

During the year ended December 31, 2019, the vested restricted share units had an aggregate grant-date fair value of $23 million. During the years ended December 31, 2018 and 2017, we granted 2,521,939 and 1,921,029 service-based units, respectively, with a per unit weighted-average grant-date fair value of $9.67 and $13.03, respectively. During the years ended December 31, 2018 and 2017, we had 2,087,141 and 1,867,970 service-based units, respectively, that vested with an aggregate grant-date fair value of $27 million and $28 million, respectively.

Stock options—The following table summarizes activity for vested and unvested service-based stock options outstanding under our incentive plans during the year ended December 31, 2019:


				Weighted-average
	Number	Weighted-average		remaining	Aggregate
	of shares	exercise price		contractual term	intrinsic value
	under option	per share		(years)	(in millions)
Outstanding at January 1, 2019	3,767,483	$	21.56	6.84	$	—
Granted	1,594,528		8.35	—		—
Forfeited	(201,596)		30.93	—		—
Expired	(295,990)		60.33	—		—
Outstanding at December 31, 2019	4,864,425	$	14.48	7.34	$	—

Vested and exercisable at December 31, 2019	2,212,911	$	20.88	5.85	$	—

During the year ended December 31, 2019, the granted stock options had a per option weighted-average grant-date fair value of $4.09. During the year ended December 31, 2019, the vested stock options had an aggregate grant-date fair value of $10 million. At December 31, 2019 and 2018, there were outstanding unvested stock options to purchase 2,651,514 and 2,166,969 shares, respectively. During the years ended December 31, 2018 and 2017, we granted stock options to purchase 1,249,266 and 877,231 shares, respectively, with a per option weighted-average grant-date fair value of $9.18 and $6.46, respectively. During the years ended December 31, 2018 and 2017, the vested stock options had an aggregate grant-date fair value of $6 million and $2 million, respectively. During the years ended December 31, 2017 and 2016, no stock options were exercised.

Performance awards

Restricted share units—We grant performance awards in the form of restricted share units that can be earned depending on the achievement of market factors. The number of shares ultimately earned per unit is quantified upon completion of the specified period at the determination date. The following table summarizes unvested activity for performance-based units under our incentive plans during the year ended December 31, 2019:


	Number	Weighted-average
	of	grant-date fair value
	units	per unit
Unvested at January 1, 2019	1,763,794	$	12.93
Granted	1,067,316		10.77
Vested	(676,098)		16.25
Forfeited	(73,393)		3.02
Unvested at December 31, 2019	2,081,619	$	10.78

During the year ended December 31, 2019, the vested performance-based units had an aggregate grant-date fair value of $11 million. During the years ended December 31, 2018 and 2017, we granted 1,074,054 and 689,740 performance-based units, respectively, with a per unit weighted-average grant-date fair value of $10.79 and $16.25, respectively. During the years ended December 31, 2018 and 2017, the vested performance-based units had an aggregate grant-date fair value of $11 million and $7 million, respectively.