Stock-Based Compensation

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

The 2014 Incentive Plan is Ameren’s long-term stock compensation plan for eligible employees and directors. The 2014 Incentive Plan provides for a maximum of 8 million common shares to be available for grant to eligible employees and directors. At December 31, 2017, there were 4.9 million common shares remaining for grant under the 2014 Incentive Plan. The 2014 Incentive Plan awards may be stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units, cash-based awards, and other stock-based awards.

Performance Share Units

A share unit vests and entitles an employee to receive shares of Ameren common stock (plus accumulated dividends) if, at the end of the three-year performance period, certain specified performance or market conditions have been met and if the individual remains employed by Ameren through the required vesting period. The exact number of shares issued pursuant to a share unit varies from 0% to 200% of the target award, depending on actual company performance relative to the performance goals. The vesting period for share units awarded extends beyond the three-year performance period to the payout date.

The following table summarizes the nonvested performance share unit activity for the year ended December 31, 2017:

	Performance Share Units
	Share Units		Weighted-average Grant Date Fair Value per Share Unit
Nonvested at January 1, 2017(a)	780,545		$	47.54
Granted(b)	508,161		59.16
Forfeitures	(50,523	)	52.50
Undistributed vested units(c)	(342,694	)	51.65
Nonvested at December 31, 2017(a)	895,489		$	52.28

(a) Excludes 369,878 and 712,572 performance share units granted to retirement-eligible employees as of January 1, 2017 and December 31, 2017, respectively, as the undistributed performance share units are fully vested.

(b) Includes performance share units granted to certain executive and nonexecutive officers and other eligible employees in 2017 under the 2014 Incentive Plan.

(c) Includes performance share units that vested due to attainment of retirement eligibility by certain employees. Actual shares issued for retirement-eligible employees will vary depending on actual performance over the three-year measurement period.

The following table presents the stock-based compensation expense for the years ended December 31, 2017, 2016, and 2015:

	2017		2016		2015
Ameren Missouri	$	4	$	4	$	5
Ameren Illinois	2		2		3
Other(a)	12		11		11
Ameren	18		17		19
Less income tax benefit	7		6		7
Stock-based compensation expense, net	$	11	$	11	$	12

(a) Represents compensation expense of employees of Ameren Services. These amounts are not included in the Ameren Missouri and Ameren Illinois amounts above.

Ameren settled performance share units of $39 million, $83 million, and $27 million for the years ended December 31, 2017, 2016, and 2015. There were no significant compensation costs capitalized related to the performance share units during the years ended December 31, 2017, 2016, and 2015. As of December 31, 2017, total compensation cost of $29 million related to nonvested awards not yet recognized is expected to be recognized over a weighted-average period of 22 months.

The fair value of each share unit awarded under the 2014 Incentive Plan is based on Ameren’s closing common share price at December 31st of the year prior to the award year and lattice simulations. Lattice simulations are used to estimate expected share payout based on Ameren’s total shareholder return for a 3-year performance period relative to the designated peer group beginning January 1st of the award year. The simulations can produce a greater fair value for the share unit than the applicable closing common share price because they include the weighted payout scenarios in which an increase in the share price has occurred. The significant assumptions used to calculate fair value also include a three-year risk-free rate, volatility for the peer group, and Ameren’s attainment of a three-year average earnings per share threshold during the performance period. The following table presents the fair value of each share unit awarded under the 2014 Incentive Plan along with the significant assumptions used to calculate the fair value of each share unit for the years ended December 31, 2017, 2016, and 2015:

	2017	2016	2015
Fair value of share units awarded	$59.16	$44.13	$52.88
Ameren’s closing common share price at December 31 of the prior year	$52.46	$43.23	$46.13
Three-year risk free rate	1.47%	1.31%	1.10%
Volatility range	15% - 21%	15% - 20%	12% - 18%