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Stock-Based Compensation Stock-Based Compensation (Tables)
 3 Months Ended
Mar. 31, 2019
Stock-Based Compensation [Abstract]  
Stock-based Compensation Expense and Tax Effect
Stock-based compensation expense was as follows:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Stock-based compensation expense, pre-tax
 
$
15

 
$
16

Income tax benefit recognized in earnings
 
4

 
4
Schedule Of Share Based Payment Award Valuation Assumptions, Performance Shares, Market-Based Component Table
Market-Based Component
The Absolute Share Price metric is based on Xerox's average closing price for the last twenty trading days of the performance period, inclusive of dividends during the three-year performance period. Payout for this portion of the PS will be determined based on total return targets approved by the compensation committee of the Board. Since this portion of the PS award represents a market condition, a Monte Carlo simulation was used to determine the grant-date fair value.
A summary of the key valuation input assumptions used in the Monte Carlo simulation relative to PS awards granted were as follows:
 
 
Program to Date March 31, 2019
Term
 
3 years

Risk-free interest rate(1)
 
2.51
%
Dividend yield(2)
 
3.97
%
Xerox’s blended volatility(3)
 
32.95
%
Weighted average fair value(4)
 
$
16.02

____________
(1)
The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve on the valuation date, with a maturity matched to the performance period.
(2)
The dividend yield was calculated as the expected quarterly dividend divided by Xerox’s three-month average stock price as of the valuation date, annualized and continuously compounded.
(3)
Xerox’s volatility is calculated using a blended volatility approach, with 50% weight on Xerox's historical volatility calculated from daily stock returns over a three-year look-back term from the valuation date, and 50% weight on Xerox's implied volatility.
(4)
The weighted average of fair values used to record compensation expense as determined by the Monte Carlo simulation.
Absolute TSR Payout as a Percentage
The Absolute Share Price is compared against total return targets to determine the payout as follows:
Total Return Targets(1)
 
Payout Percentages
$40.00 and above
 
200
%
$35.00
 
100
%
$30.00
 
50
%
Below $30.00
 
0
%
____________
(1)
For performance between the levels described above, the degree of vesting is interpolated on a linear basis.