STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

The Company's 1999 Omnibus Plan, as amended and restated effective June 7, 2018, (the "1999 Plan") is the primary stock compensation plan from which broad-based employee, non-employee director and consultant equity awards may be made. At December 31, 2020, there were 1,614,570 shares of common stock available for future grant under the 1999 Plan. In addition, under plans assumed in connection with various acquisitions, there were 52,192 shares of common stock available for future grant at December 31, 2020.

Stock-based compensation issued under the plans generally consists of restricted stock units, performance share units and stock options. Performance share units and restricted stock units are payable in shares of the Company's common stock upon vesting. The Company issues shares of its common stock upon the exercise of stock options.

Stock-based compensation expense included in "Personnel" expenses in the Consolidated Statements of Operations was $233 million, $308 million and $317 million for the years ended December 31, 2020, 2019 and 2018, respectively. The related tax benefit for stock-based compensation was $30 million, $38 million and $36 million for the years ended December 31, 2020, 2019 and 2018, respectively. Stock-based compensation for the years ended December 31, 2020, 2019 and 2018 includes benefits of $71 million and $4 million, and a charge of $48 million, respectively, representing the impact of adjusting the estimated probable outcome at the end of the performance period for outstanding unvested performance share units.

Due to the impact of the COVID-19 pandemic (see Note 2), there was a significant decline in the estimated performance over the performance periods against the performance targets and consequently, a significant reduction in the number of shares that were probable to be issued as compared to December 31, 2019. As a result, the Company recognized a reduction in stock-based compensation expense of $73 million, which is included in "Personnel" expense in the Consolidated Statement of Operations for the year ended December 31, 2020. In 2020, considering pre-COVID-19 performance and the significant effect of the COVID-19 pandemic on Company performance and consequently on the number of shares that were probable to be issued to employees, the Company modified the performance-based awards granted in 2018 (other than the performance-based awards granted to executive officers and certain other employees) to fix the number of shares to be issued, subject to other vesting conditions. As a result, the Company incurred an additional stock-based compensation expense of $11 million to be recognized over the remaining requisite service period. In January 2021, the Company modified the performance-based awards granted in 2018 and 2019 to its executive officers, to fix the number of shares to be issued, subject to other vesting conditions. The modification, in the aggregate, will result in additional stock-based compensation expense of approximately $40 million, to be recognized over the remaining requisite service periods for the performance-based awards.

Restricted stock units and performance share units granted by the Company during the years ended December 31, 2020, 2019 and 2018 had aggregate grant-date fair values of $392 million, $380 million and $337 million, respectively. Restricted stock units and performance share units that vested during the years ended December 31, 2020, 2019, and 2018 had aggregate fair values at vesting of $358 million, $373 million and $415 million, respectively. At December 31, 2020, there was $384 million of estimated total future stock-based compensation expense related to unvested restricted stock units and performance share units to be recognized over a weighted-average period of 1.9 years.

Stock options granted by the Company during the year ended December 31, 2020 had an aggregate grant-date fair value of $79 million. At December 31, 2020, there was $57 million of estimated total future stock-based compensation expense related to unvested stock options to be recognized over a weighted-average period of 2.2 years.

Restricted Stock Units

The Company makes broad-based grants of restricted stock units that generally vest during a period of one- to three-years, subject to certain exceptions for terminations other than for "cause," for "good reason" or on account of death or disability.

The following table summarizes the activity of restricted stock units for employees and non-employee directors during the year ended December 31, 2020:


Restricted Stock Units	Shares	Weighted-average Grant-date Fair Value











Unvested at December 31, 2019	256,745		$	1,801

Granted	222,977		$	1,659
Vested	(130,684)		$	1,822
Forfeited	(43,079)		$	1,737
Unvested at December 31, 2020	305,959		$	1,697

Performance Share Units

The Company grants performance share units to executives and certain other employees, which generally vest at the end of a three-year period, subject to certain exceptions for terminations other than for "cause," for "good reason" or on account of death or disability. The number of shares that ultimately vest depends on achieving certain performance metrics or performance goals, as applicable, by the end of the performance period, assuming there is no accelerated vesting for, among other things, a termination of employment under certain circumstances.

The following table summarizes the activity of performance share units for employees during the year ended December 31, 2020:


Performance Share Units	Shares	Weighted-average Grant-date Fair Value













Unvested at December 31, 2019	216,083		$	1,835

Granted	9,040		$	2,498
Vested	(82,023)		$	1,741
Performance Shares Adjustment *	(49,775)		$	1,944
Forfeited	(8,847)		$	1,829
Unvested at December 31, 2020	84,478		$	1,930

*Probable outcome for these performance-based awards is updated based upon changes in actual and forecasted operating results or expected achievement of performance goals, as applicable, and the impact of modifications.

The following table summarizes the estimated vesting, as of December 31, 2020, of performance share units granted in 2020, 2019 and 2018, net of forfeiture and vesting since the respective grant dates:


Performance Share Units, by grant year	2020	2019	2018

Shares probable to be issued	9,040	40,843	34,595
Shares not subject to the achievement of minimum performance thresholds	—	40,843	N/A*
Shares that could be issued if maximum performance thresholds are met	18,080	108,522	N/A*

* The performance period for the performance share units granted in 2018 ended on December 31, 2020.

Stock Options

In May 2020, the Company granted stock options that vest in March 2023, subject to certain exceptions for terminations other than for "cause," for "good reason" or on account of death or disability. No stock options were granted to the executive officers of the Company. Stock options granted or assumed in acquisitions generally have a term of 10 years from the grant date. The fair value of stock options granted is estimated on the grant date using the Black-Scholes option pricing model and is affected by assumptions regarding a number of complex and subjective variables. The use of an option pricing model requires the use of several assumptions including expected volatility, risk-free interest rate, expected dividends, and expected term. Expected volatility is based on the Company’s historical volatility over the expected term of the option and implied volatility of publicly traded options of the Company’s common stock. The expected term of the options represents the estimated period of time until option exercise. Since the Company has limited historical stock option exercise experience, the Company used the simplified method in estimating the expected term, which is calculated as the average of the sum of the vesting term and the original contractual term of the options. The risk-free interest rate is based on U.S. Treasury zero-coupon issues at the time of grant for the expected term of the option.

The following table summarizes the assumptions used to value option grants granted during the year ended December 31, 2020 using the Black-Scholes options pricing model:


Black-Scholes assumptions
Risk-free interest rate	0.56	%
Expected term in years	6.4
Expected stock price volatility	33.8	%
Expected dividend yield	0	%

The following table summarizes the activity for stock options during the year ended December 31, 2020:


Employee Stock Options	Number of Shares	Weighted-average Exercise Price			Aggregate Intrinsic Value (in millions)			Weighted-average Remaining Contractual Term (in years)









Balance, December 31, 2019	15,122		$	484		$	24	2.6
Granted	163,494		$	1,411
Exercised	(13,217)		$	466
Forfeited	(12,653)		$	1,411
Balance, December 31, 2020	152,746		$	1,401		$	126	9.3
Exercisable at December 31, 2020	1,954		$	660		$	3	2.1

Stock options granted by the Company during the year ended December 31, 2020 had a weighted-average grant-date fair value per option of $485. The aggregate intrinsic value of employee stock options exercised during the years ended December 31, 2020, 2019 and 2018 was $15 million, $20 million and $5 million, respectively.