Share-Based Compensation

6 Months Ended

Jun. 30, 2011

The Company records share-based compensation awards using a fair value method and recognizes compensation expense for an amount equal to the fair value of the share-based payment issued in its financial statements. The Company’s share-based compensation plans include programs for stock options and restricted stock units (RSUs), stock appreciation rights (SARs), performance shares and deferred compensation.

Compensation Expense

Share-based compensation expense related to continuing operations is included in Selling and administrative expenses within the Condensed Consolidated Income Statement. The following table summarizes the expenses recognized for the three and six months ended June 30:



	Three months ended						Six months ended
In millions	2011			2010			2011			2010
Stock options	$	4.9		$	5.4		$	13.2		$	20.0
RSUs	9.6			2.8			12.5			8.3
Performance shares	(3.1		)	6.8			1.1			5.6
Deferred compensation	0.4			0.4			0.4			0.7
SARs and other	(0.1		)	0.5			0.5			0.7
Pre-tax expense	11.7			15.9			27.7			35.3
Tax benefit	(4.5		)	(6.1		)	(10.6		)	(13.5		)
After-tax expense	$	7.2		$	9.8		$	17.1		$	21.8
Amounts recorded in continuing operations	$	6.9		$	9.7		$	16.6		$	21.5
Amounts recorded in discontinued operations	0.3			0.1			0.5			0.3
Total	$	7.2		$	9.8		$	17.1		$	21.8

Stock Options/RSUs

The Company’s equity grant approach allows for eligible participants to receive (i) stock options, (ii) RSUs or (iii) a combination of both stock options and RSUs. Since annual equity grants are made in February, the Company grants a significant number of options and RSUs during the first quarter of the year. The following table illustrates those granted during the six months ended June 30:



	2011			2010
	Number granted	Weighted- average fair value per award		Number granted	Weighted- average fair value per award
Stock options	1,573,986	$	14.64	2,591,967	$	10.12
RSUs	530,486	$	47.37	764,965	$	31.68

The fair value of each of the Company’s stock option and RSU awards is expensed on a straight-line basis over the required service period, which is generally the three-year vesting period. However, for stock options and RSUs granted to retirement eligible employees, the Company recognizes expense for the fair value at the grant date.

SARs

All SARs outstanding as of June 30, 2011 are vested and expire ten years from the date of grant. All SARs exercised are settled with the Company’s ordinary shares. The Company did not grant SARs during the six months ended June 30, 2011 and does not anticipate additional grants in the future.

Performance Shares

The Company has a Performance Share Program (PSP) for key employees. The program provides awards based on performance against pre-established objectives. The annual target award level is expressed as a number of the Company’s ordinary shares. All PSP awards are settled in the form of ordinary shares. As of June 30, 2011, the Company’s target award level for eligible employees is approximately 1.4 million shares.

Deferred Compensation

The Company allows key employees to defer a portion of their eligible compensation into a number of investment choices, including its ordinary share equivalents. Any amounts invested in ordinary share equivalents will be settled in ordinary shares of the Company at the time of distribution.

Other Plans

The Company maintains a shareholder-approved Management Incentive Unit Award Plan. Under the plan, participating key employees were awarded incentive units. When dividends are paid on ordinary shares, phantom dividends are awarded to unit holders, one-half of which is paid in cash, the remaining half of which is credited to the participants’ accounts in the form of ordinary share equivalents. The value of the actual incentive units is never paid to participants, and only the fair value of accumulated ordinary share equivalents is paid in cash upon the participants’ retirement.

The Company has issued stock grants as an incentive plan to certain key employees, with varying vesting periods. All stock grants are settled with the Company’s ordinary shares.

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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