Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock-based compensation

Accounting for stock-based compensation requires that the cost resulting from all stock-based payments be recognized in the financial statements based on the grant date fair value of the award. Our stock-based compensation primarily consists of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PRSUs).

We recognized pretax stock-based compensation expense of $58 million and $169 million for the three and nine months ended September 30, 2021, respectively, and $55 million and $169 million for the three and nine months ended September 30, 2020, respectively.

The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2021 and 2020, respectively:



	Nine Months Ended September 30, 2021					Nine Months Ended September 30, 2020
	Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price		Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price
Stock options	1,084,821	$	56.30	$	219.76	1,913,888	$	25.98	$	127.60
RSUs	448,311	$	219.76	$	219.76	705,287	$	127.60	$	127.60
PRSUs	266,894	$	219.76	$	219.76	371,641	$	127.60	$	127.60

The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2021 and 2020, respectively:



	Grant Year
	2021	2020
Weighted-average dividend yield	2.60%	2.47%
Weighted-average volatility	32.9%	25.7%
Range of volatilities	29.2% - 45.8%	24.5% - 29.7%
Range of risk-free interest rates	0.06% - 1.41%	1.21% - 1.39%
Weighted-average expected lives	8 years	8 years

As of September 30, 2021, the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $175 million, which will be amortized over the weighted-average remaining requisite service periods of approximately 1.9 years.