Share-Based Compensation Plans

6 Months Ended

Jun. 30, 2016

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

The following table summarizes share-based compensation expense recognized in the Condensed Consolidated Statements of Income in Compensation and benefits (in millions):



	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Restricted share units ("RSUs")	$	44	$	44	$	105	$	109
Performance share awards ("PSAs")	25		28		45		49
Share options	—		—		—		—
Employee share purchase plans	2		2		6		6
Total share-based compensation expense	$	71	$	74	$	156	$	164

Restricted Share Units

A summary of the status of the Company's RSUs is as follows (shares in thousands):



	Six months ended June 30,
	2016				2015
	Shares		Fair Value (1)		Shares		Fair Value (1)
Non-vested at beginning of period	7,169		$	77	8,381		$	63
Granted	2,023		101		2,144		98
Vested	(2,581	)	70		(3,037	)	58
Forfeited	(213	)	79		(130	)	67
Non-vested at end of period	6,398		87		7,358		76

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(1)	Represents per share weighted-average fair value of award at date of grant.

Performance Share Awards

The vesting of PSAs is contingent upon meeting a cumulative level of earnings per share performance over a three-year period. The performance conditions are not considered in the determination of the grant date fair value for these awards. The fair value of PSAs is based upon the market price of an Aon ordinary share at the date of grant. Compensation expense is recognized over the performance period based on management's estimate of the number of awards expected to vest. Compensation expense is adjusted to reflect the actual number of shares issued at the end of the programs. The actual issue of shares may range from 0-200% of the target number of PSAs granted, based on the terms of the plan and level of achievement of the related performance target. Dividend equivalents are not paid on PSAs.

Information as of June 30, 2016 regarding the Company's target PSAs granted and shares that would be issued at current performance levels for PSAs granted during the six months ended June 30, 2016 and the years ended December 31, 2015 and 2014, respectively, is as follows (shares in thousands, dollars in millions, except fair value):



	2016		2015		2014
Target PSAs granted during period	783		993		816
Weighted average fair value per share at date of grant	$	101	$	96	$	81
Number of shares that would be issued based on current performance levels	772		963		1,552
Unamortized expense, based on current performance levels	$	71	$	49	$	21

Share Options

The Company did not grant any share options during either the six months ended June 30, 2016 or the six months ended June 30, 2015.

A summary of the status of the Company's share options and related information is as follows (shares in thousands):



	Six months ended June 30,
	2016				2015
	Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
Beginning outstanding	837		$	40	2,300		$	32
Granted	—		—		—		—
Exercised	(271	)	38		(1,388	)	27
Forfeited and expired	(5	)	42		(13	)	39
Outstanding at end of period	561		41		899		39
Exercisable at end of period	561		41		899		39

The weighted average remaining contractual life, in years, of outstanding options was 2.4 years and 2.7 years at June 30, 2016 and 2015, respectively.

The aggregate intrinsic value represents the total pretax intrinsic value, based on options with an exercise price less than the Company's closing share price of $109.23 as of June 30, 2016, which would have been received by the option holders had those option holders exercised their options as of that date. At June 30, 2016, the aggregate intrinsic value of options outstanding, all of which were exercisable, was $38 million.

Other information related to the Company's share options is as follows (in millions):



	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Aggregate intrinsic value of stock options exercised	$	9	$	6	$	17	$	100
Cash received from the exercise of stock options	6		4		11		38
Tax benefit realized from the exercise of stock options	2		1		4		35

Unamortized deferred compensation expense, which includes both options and RSUs, amounted to $460 million as of June 30, 2016, with a remaining weighted-average amortization period of approximately 2.0 years.