STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Presented below is a summary of the stock-based compensation cost and associated tax benefit included in the accompanying consolidated statements of operations:


	Three Months Ended March 31,
	2023		2022
Stock-based compensation cost	$	47	$	46
Tax benefit	$	10	$	11

During the first three months of 2023, the Company granted 0.1 million employee stock options, which had a weighted average grant date fair value of $94.67 per share. The Company also granted 0.6 million shares of restricted stock in the first three months of 2023, which had a weighted average grant date fair value of $295.53 per share. Both the employee stock options and restricted stock generally vest ratably over four years. Additionally, the Company granted 0.1 million shares of performance-based awards whereby the number of shares that ultimately vest are based on the achievement of certain non-market-based performance metrics of the Company over three years. The weighted average grant date fair value of these awards was $286.04 per share.

The following weighted average assumptions were used in determining the fair value using the Black-Scholes option-pricing model for options granted in 2023:


Expected dividend yield	1.04	%
Expected stock volatility	29	%
Risk-free interest rate	4.18	%
Expected holding period	5.8 years

Unrecognized stock-based compensation expense at March 31, 2023 was $20 million and $354 million for stock options and unvested restricted stock, respectively, which is expected to be recognized over a weighted average period of 2.2 years and 2.8 years, respectively. Additionally, there was $43 million of unrecognized stock-based compensation expense relating to the aforementioned non-market-based performance-based awards, which is expected to be recognized over a weighted average period of 2.4 years.

The following table summarizes information relating to stock option exercises and restricted stock vesting:


	Three Months Ended March 31,
	2023		2022
Exercise of stock options:
Proceeds from stock option exercises	$	7	$	3
Aggregate intrinsic value	$	15	$	4
Tax benefit realized upon exercise	$	4	$	1
Number of shares exercised (1)	0.1		—
Vesting of restricted stock:
Fair value of shares vested	$	140	$	166
Tax benefit realized upon vesting	$	33	$	39
Number of shares vested	0.5		0.5
Vesting of performance-based restricted stock:
Fair value of shares vested	$	24	$	50
Tax benefit realized upon vesting	$	3	$	7
Number of shares vested	0.1		0.2

(1) The number of options exercised in 2022 was approximately 20 thousand.