Share-Based Compensation Plans

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

SHARE-BASED COMPENSATION PLANS

UAL maintains share-based compensation plans for our management employees and our non-employee directors. During 2021, UAL's Board of Directors and stockholders approved the United Airlines Holdings, Inc. 2021 Incentive Compensation Plan (the "2021 Plan"). The 2021 Plan is an incentive compensation plan that allows the Company to use different forms of equity incentives to attract, retain and reward officers and employees. Under the 2021 Plan, the Company may grant: nonqualified stock options; incentive stock options (within the meaning of Section 422 of the Internal Revenue Code of 1986); stock appreciation rights ("SARs"); restricted stock ("RSAs"); RSUs; performance units; cash incentive awards and other equity-based and equity-related awards. An award (other than an option, SAR or cash incentive award) may provide the holder with dividends or dividend equivalents. The 2021 Plan replaces the United Continental Holdings, Inc. 2017 Incentive Compensation Plan (the "2017 Plan"). Any awards granted under the 2017 Plan prior to the approval of the 2021 Plan remain in effect pursuant to their terms. The number of shares of UAL common stock that remained available for issuance under the 2017 Plan as of the effective date of the 2021 Plan are now available for issuance under the 2021 Plan.

All awards are recorded as either equity or a liability in the Company's consolidated balance sheets. The share-based compensation expense is recorded in salaries and related costs.

During 2021, UAL granted share-based compensation awards pursuant to both the 2017 Plan and the 2021 Plan. These share-based compensation awards included approximately 3 million RSUs consisting of approximately 1 million time-vested RSUs and approximately 2 million performance-based RSUs. A majority of the time-vested RSUs vest equally in 25% increments every 6 months over a two-year period from the date of grant. The short-term performance-based RSUs vest upon the achievement of established goals based on financial and customer satisfaction metrics for the performance period January 1, 2021 to December 31, 2021. RSUs are generally equity awards settled in stock for domestic employees and liability awards settled in cash for international employees. The cash payments are based on the 20-day average closing price of UAL common stock immediately prior to the vesting date.

The following table provides information related to UAL's share-based compensation plan cost for the years ended December 31 (in millions):


	2021		2020		2019
Compensation cost:
RSUs	$	236	$	106	$	98
Stock options	2		2		1
RSAs	—		—		1
Total	$	238	$	108	$	100

The table below summarizes UAL's unearned compensation and weighted-average remaining period to recognize costs for all outstanding share-based awards that are probable of being achieved as of December 31, 2021 (in millions, except as noted):


	Unearned Compensation		Weighted-Average Remaining Period (in years)
RSUs	$	60	0.7
Stock options	6		3.9
Total	$	66

RSUs. As of December 31, 2021, UAL had recorded a liability of approximately $7 million related to its cash-settled RSUs. UAL paid approximately $29 million, $26 million and $41 million related to its cash-settled RSUs during 2021, 2020 and 2019, respectively.

The table below summarizes UAL's RSU activity for the years ended December 31 (shares in millions):


	Liability Awards	Equity Awards
	RSUs	RSUs	Weighted- Average Grant Price
Outstanding at December 31, 2018	1.9	1.8	$	66.29
Granted	0.1	1.1	86.72
Vested	(0.5)	(0.8)	64.85
Forfeited	(0.9)	(0.1)	76.48
Outstanding at December 31, 2019	0.6	2.0	78.03
Granted	0.1	2.4	40.80
Vested	(0.3)	(0.8)	74.54
Forfeited	—	(0.4)	54.21
Outstanding at December 31, 2020	0.4	3.2	53.41
Granted	0.4	2.9	52.18
Vested	(0.6)	(1.5)	51.35
Forfeited	—	(0.2)	46.77
Outstanding at December 31, 2021	0.2	4.4	53.63

The fair value of RSUs and RSAs that vested in 2021, 2020 and 2019 was approximately $104 million, $87 million and $99 million, respectively. The last vesting of RSAs occurred in 2019 and the Company has not granted RSAs since 2016.

Stock Options. UAL did not grant any stock option awards during either 2020 or 2021. In 2019, UAL granted an award of approximately 307,000 premium-priced stock options with an exercise price that was 25% higher than the closing price of UAL's common stock on the date of grant, representing an exercise price of $110.21. Expense related to each portion of an option grant is recognized on a straight-line basis over the specific vesting period for those options.

As of December 31, 2021, there were approximately 0.7 million outstanding stock option awards, 0.3 million of which were exercisable, with weighted-average exercise prices of $82.12 and $59.05, respectively, weighted-average remaining contractual lives (in years) of 5.3 and 2.9, respectively, and intrinsic values of zero as all of the strike prices exceeded the closing stock price on that date.