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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2020
Share-based Payment Arrangement [Abstract] |
Share-based Payment Arrangement [Text Block] | STOCK-BASED COMPENSATION Prior to the Corteva Distribution, Corteva employees held equity awards, including stock options, share appreciation rights (“SARs”), restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”), which were denominated in DowDuPont common stock and, in some cases, in Dow Inc. common stock, and which had originally been issued under the DuPont Equity and Incentive Plan ("EIP"), the Dow Chemical Company 2012 Stock Incentive Plan or the Dow Chemical Company 1988 Award and Option Plan. As discussed in Note 5 - Divestitures and Other Transactions, on April 1, 2019 the company entered into an employee matters agreement (the "EMA") with DuPont and Dow that identifies employees and employee-related liabilities (and attributable assets) to be allocated (either retained, transferred and accepted, or assigned and assumed, as applicable) to the Parties as part of the Distributions and describes when and how the relevant transfers and assignments will occur. With some exceptions, the EMA provides for the equitable adjustment of existing equity incentive compensation awards denominated in the common stock of DowDuPont to reflect the occurrence of the Distributions. In connection with the Separation on June 1, 2019, outstanding DowDuPont-denominated stock options, SARs, RSU and PSU awards were converted into Corteva-denominated awards under the “Employer Method,” or into both DuPont-denominated awards and Corteva-denominated awards under the “Shareholder Method,” using a formula designed to preserve the intrinsic value of the awards immediately prior to and subsequent to the Corteva Separation. The awards have the same terms and conditions under the applicable plans and award agreements prior to the Separation transactions. The conversions of equity awards did not have a material impact to the company’s consolidated financial statements. On June 1, 2019 (“Adoption Date”), in connection with the Separation, the Omnibus Incentive Plan (the "OIP") became effective. Under the OIP, the company may grant incentive awards, including stock options (both “incentive stock options” and nonqualified stock options), share appreciation rights, restricted shares, restricted stock units, other share-based awards and cash awards, to its and its subsidiaries’ eligible employees, non-employee directors, independent contractors and consultants following the Separation until the tenth anniversary of the Adoption Date, subject to an aggregate limit and annual individual limits. Under the OIP, the maximum number of shares reserved for the grant or settlement of awards is 20 million shares, excluding shares underlying certain exempt awards, such as the awards converted to Corteva-denominated awards pursuant to the Separation. At December 31, 2020, approximately 14 million shares were authorized for future grants under the OIP. The company generally satisfies stock option exercises and the vesting of RSUs and PSUs with newly issued shares of Corteva common stock, although RSU awards granted under Historical Dow plans in certain countries are settled in cash. The compensation committee determines the long-term incentive mix, including stock options, RSUs and PSUs and may authorize new grants annually. The company estimates expected forfeitures. The total stock-based compensation cost included in income (loss) from continuing operations before income taxes within the Consolidated Statement of Operations was $73 million, $84 million, and $83 million for the years ended December 31, 2020, 2019 and 2018, respectively. The income tax benefits related to stock-based compensation arrangements were $(15) million, $(17) million, and $(17) million for the years ended December 31, 2020, 2019 and 2018, respectively. Stock Options The exercise price of shares subject to option is equal to the market price of the company's stock on the date of grant. All options vest serially over a period of three years. Stock option awards granted under the OIP between June 2019 and 2020 expire 10 years after the grant date. Stock option awards granted under the EIP (previous plan) between 2014 and 2015 expire seven years after the grant date and options granted between 2016 and May 2019 expire 10 years after the grant date. Stock option awards granted under the Historical Dow plans subsequent to 2010 expire 10 years after the grant date. To measure the fair value of the awards on the date of grant, the company used the Black-Scholes option pricing model and the assumptions set forth in the below table. Under the OIP, the weighted-average grant-date fair value of options granted for the year ended December 31, 2020 was $6.06. Under the EIP, the weighted-average grant-date fair value of options granted for the years ended December 31, 2019 and 2018 was $7.29 and $15.46, respectively.
Weighted-Average Assumptions | OIP | EIP
For the year ended December 31, 2020 | For the year ended December 31, 2019 | For the year ended December 31, 2018
Dividend yield | 1.67 | % | 1.55 | % | 2.1 | %
Expected volatility | 23.14 | % | 19.80 | % | 23.30 | %
Risk-free interest rate | 1.3 | % | 2.4 | % | 2.8 | %
Expected life of stock options granted during period (years) | 6.0 | 6.1 | 6.2
Under the OIP, the company determined the dividend yield by dividing the annualized dividend on Corteva’ s Common Stock by the option exercise price. A historical daily measurement of volatility is determined based on the expected life of the option granted. For the year ended December 31, 2020, the measurement of volatility is based on the average volatility of eight of Corteva's peer companies. Corteva's peer volatility is based on the historical volatility of each business respectively. The risk-free interest rate is determined by reference to the yield on an outstanding U.S. Treasury note with a term equal to the expected life of the option granted. Expected life is determined by utilizing the simplified method for estimating expected term as referenced under ASC 718 – Share based Payments. Under the EIP, the company determined the dividend yield by dividing the annualized dividend on DowDuPont's Common Stock by the option exercise price. A historical daily measurement of volatility is determined based on the expected life of the option granted. For the year ended December 31, 2019, the measurement of volatility is based on weighted average of the individual peer volatilities of DuPont and Corteva based on the size of each business respectively. DuPont and Corteva peer volatility are based on a 50/50 blend of historical volatility and implied volatility. Both volatility measures are based on the average of five peer companies for DuPont and eight peer companies for Corteva. For the year ended December 31, 2018, the measurement of volatility used DowDuPont stock information after the Merger date, and a weighted average of Historical Dow and Historical DuPont stock information prior to Merger date. The risk-free interest rate is determined by reference to the yield on an outstanding U.S. Treasury note with a term equal to the expected life of the option granted. Expected life is determined by reference to the company's historical experience. The following table summarizes stock option activity for year ended December 31, 2020 under the OIP:
Stock Options | For the Year Ended December 31, 2020
| Number of Shares (in thousands) | Weighted Average Exercise Price (per share) | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2020 | 10,045 |  | $ | 32.47 |  | 4.73 | $ | 20,186 |
Granted | 1,459 |  | 31.16 |  |  |
Exercised | (2,349) |  | 24.96 |  |  |
Forfeited/Expired | (157) |  | 34.24 |  |  |
Outstanding at December 31, 2020 | 8,998 |  | $ | 34.21 |  | 5.27 | $ | 50,077 |
Exercisable at December 31, 2020 | 6,695 |  | $ | 33.96 |  | 4.27 | $ | 38,799 |
The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between the closing stock price on the last trading day of the December 31, 2020 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options at period end. Under the OIP, the total intrinsic value of options exercised for the years ended December 31, 2020 and 2019 were $21 million, and $3 million, respectively. The company recognized tax benefits from options exercised for the years ended December 31, 2020 and 2019 of $(4) million and $(1) million, respectively. Under the EIP, the total intrinsic value of options exercised for the years ended December 31, 2019 and 2018 were $16 million and $50 million, respectively. The company recognized tax benefits from options exercised for the year ended December 31, 2019 of $(3) million. As of December 31, 2020, $3 million of total unrecognized pre-tax compensation expense related to nonvested stock options is expected to be recognized over a weighted-average period of about 0.56 years. Restricted Stock Units and Performance Share Units RSUs granted under the EIP serially vest over 3 years. RSUs granted under the Historical Dow plans vest after a designated period, generally 1 year to 3 years. RSUs granted under the OIP serially vest over 3 years. Upon vesting, these RSUs convert one-for-one to Corteva Common Stock. A retirement-eligible employee retains any granted awards upon retirement provided the employee has rendered at least six months of service following the grant date. Additional RSUs are also granted periodically to key senior management employees. These RSUs generally vest over periods ranging from 3 years to 5 years. The fair value of all stock-settled RSUs is based upon the market price of the underlying common stock as of the grant date. The company grants PSUs to senior leadership. In 2020, there were 444,816 PSUs granted. Vesting for PSUs granted in 2020 is partially based on the realization of the Company’s improvement of its Return on Invested Capital (“ROIC”) and Operating Earnings Per Share (EPS) during the Performance Period. Vesting for PSUs granted in 2019 is partially based on the realization of the Company’s improvement of its Return on Invested Capital (“ROIC”) and Operating EBITDA during the Performance Period. Performance and payouts are determined independently for each metric. The actual award, delivered in Corteva Common Stock, can range from zero percent to 200 percent of the original grant. The weighted-average grant date fair value of the PSUs granted in 2020 of $31.17 was based upon the market price of the underlying common stock as of the grant date. Nonvested awards of RSUs and PSUs are shown below.
RSUs & PSUs | For the Year Ended December 31, 2020
| Number of Shares (in thousands) | Weighted Average Grant Date Fair Value (per share)
Nonvested at January 1, 2020 | 5,438 |  | $ | 32.49 |
Granted | 1,970 |  | $ | 31.15 |
Vested | (1,400) |  | $ | 34.69 |
Forfeited | (125) |  | $ | 31.16 |
Nonvested at December 31, 2020 | 5,883 |  | $ | 31.54 |
The total fair value of stock units vested under the OIP for the years ended December 31, 2020 and 2019 was $49 million and $19 million, respectively. The weighted-average grant-date fair value of stock units granted under the OIP for the years ended December 31, 2020 and 2019 was $31.15 and $28.88. The total fair value of stock units vested under the EIP during the years ended December 31, 2019 and 2018 was $79 million and $128 million, respectively. The weighted-average grant-date fair value of stock units granted under the EIP for the years ended December 31, 2019 and 2018 was $52.19 and $70.37, respectively. As of December 31, 2020, $56 million of total unrecognized pre-tax compensation expense related to RSUs and PSUs is expected to be recognized over a weighted average period of 0.67 years.

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