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Stock-Based Compensation
 3 Months Ended
Mar. 31, 2014
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation

7. Stock-Based Compensation

NOV has a stock-based compensation plan known as the National Oilwell Varco, Inc. Long-Term Incentive Plan (the “Plan”). The Plan provides for the granting of stock options, performance-based share awards, restricted stock, phantom shares, stock payments and stock appreciation rights. Total stock-based compensation for all stock-based compensation arrangements for NOW employees under the Plan was $2 million and $1 million for the three months ended March 31, 2014 and 2013, respectively. The total income tax benefit recognized in the Combined Statements of Income for all stock-based compensation arrangements for employees of NOW under the Plan was $1 million and less than $1 million for the three months ended March 31, 2014 and 2013, respectively.

During the three months ended March 31, 2014, employees of NOW were granted 204,952 stock options with a fair value of $25.60 per share and 30,008 shares of restricted stock and restricted stock units with a fair value of $74.83 per share. In addition, certain members of senior management of NOW were granted performance share awards on February 25, 2014, with potential payouts varying from zero to 22,472 shares. The stock options were granted February 25, 2014 with an exercise price of $74.83. These options generally vest over a three-year period from the grant date. The restricted stock and restricted stock units were granted February 25, 2014 and vest on the third anniversary of the date of grant. The performance share awards can be earned based on performance against established goals over a three-year performance period. The performance share awards are divided into two equal, independent parts that are subject to two separate performance metrics: 50% with a TSR (total shareholder return) goal (the “TSR Award”) and 50% with an internal ROC (return on capital) goal (the “ROC Award”).

After the Spin-Off, pursuant to the terms of the agreements entered into between NOW and NOV in connection with the Spin-Off, outstanding equity awards under the Plan held by NOV employees who will become NOW employees will be converted to similar awards under NOW’s Long-Term Incentive Plan, provided, that performance conditions attached to the performance share awards for the members of senior management of NOV that joined NOW will be removed and the vesting of such awards will only be subject to continued employment by such employees with NOW through the original performance period.