STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2024

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,
	2024		2023
Stock-based compensation cost	$	53	$	47
Tax benefit	$	12	$	10

During the first quarter of 2024, the Company granted 0.2 million employee stock options, which had a weighted average grant date fair value of $120.28 per share. The Company also granted 0.5 million shares of restricted stock in the first quarter of 2024, which had a weighted average grant date fair value of $372.18 per share. Both the employee stock options and restricted stock generally vest ratably over four years. Additionally, the Company granted 0.2 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 a period of two to four years. The weighted average grant date fair value of these awards was $361.44 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 2024:


Expected dividend yield	0.91	%
Expected stock volatility	28	%
Risk-free interest rate	4.34	%
Expected holding period	5.9 years

Unrecognized stock-based compensation expense at March 31, 2024 was $26 million and $375 million for unvested stock options and restricted stock, respectively, which is expected to be recognized over a weighted average period of 1.9 years and 2.8 years, respectively. Additionally, there was $67 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 2.7 years.

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


	Three Months Ended March 31,
	2024		2023
Exercise of stock options:
Proceeds from stock option exercises	$	16	$	7
Aggregate intrinsic value	$	21	$	15
Tax benefit realized upon exercise	$	3	$	4
Number of shares exercised	0.1		0.1
Vesting of restricted stock:
Fair value of shares vested	$	169	$	140
Tax benefit realized upon vesting	$	41	$	33
Number of shares vested	0.4		0.5
Vesting of performance-based restricted stock:
Fair value of shares vested	$	40	$	24
Tax benefit realized upon vesting	$	9	$	3
Number of shares vested	0.1		0.1