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Stock-Based Compensation
12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation
  NOTE 18
 
  Stock-Based Compensation
As part of its employee and director compensation programs, the Company currently may grant certain stock awards under the provisions of its stock incentive plan. The plan provides for grants of options to purchase shares of common stock at a fixed price equal to the fair value of the underlying stock at the date of grant. Option grants are generally exercisable up to ten years from the date of grant. In addition, the plan provides for grants of shares of common stock or stock units that are subject to restriction on transfer prior to
vesting
. Most stock and unit awards vest over
three to five years and are subject to forfeiture if certain vesting requirements are not met. Stock incentive plans of acquired companies are generally terminated at the merger closing dates. Participants under such plans receive the Company’s common stock, or options to buy the Company’s common stock, based on the conversion terms of the various merger agreements. At December 31, 2021, there were 24 million shares (subject to adjustment for forfeitures) available for grant under the Company’s stock incentive plan.
Stock Option Awards
The following is a summary of stock options outstanding and exercised under prior and existing stock incentive plans of the Company:
 
Year Ended December 31   Stock
Options/Shares
       Weighted-
Average
Exercise Price
      
Weighted-Average

Remaining
Contractual Term
       Aggregate
Intrinsic Value
(in millions)
 
         
2021
                                        
Number outstanding at beginning of period
    5,180,391        $ 40.38                        
Exercised
    (1,281,646        33.66                        
Cancelled
(a)
    (8,614        48.20                        
   
 
 
 
Number outstanding at end of period
(b)
    3,890,131        $ 42.58          3.3        $ 53  
Exercisable at end of period
    3,890,131        $ 42.58          3.3        $ 53  
         
2020
                                        
Number outstanding at beginning of period
    5,718,256        $ 39.25                        
Exercised
    (513,293        27.48                        
Cancelled
(a)
    (24,572        45.08                        
   
 
 
 
Number outstanding at end of period
(b)
    5,180,391        $ 40.38          3.7        $ 32  
Exercisable at end of period
    4,942,077        $ 39.68          3.6        $ 34  
         
2019
                                        
Number outstanding at beginning of period
    9,115,010        $ 34.52                        
Exercised
    (3,333,467        26.36                        
Cancelled
(a)
    (63,287        36.74                        
   
 
 
 
Number outstanding at end of period
(b)
    5,718,256        $ 39.25          4.4        $ 115  
Exercisable at end of period
    4,869,805        $ 37.67          4.0        $ 105  
Note:
The Company did not grant any stock option awards during 2021, 2020 and 2019.
(a)
Options cancelled include both
non-vested
(i.e., forfeitures) and vested options.
(b)
Outstanding options include stock-based awards that may be forfeited in future periods. The impact of the estimated forfeitures is reflected in compensation expense.
Stock-based compensation expense is based on the estimated fair value of the award at the date of grant or modification. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model, requiring the use of subjective assumptions. Because employee
stock options have characteristics that differ from those of traded options, including vesting provisions and trading limitations that impact their liquidity, the determined value used to measure compensation expense may vary from the actual fair value of the employee stock options.
The following summarizes certain stock option activity of the Company:
 
Year Ended December 31 (Dollars in Millions)   2021        2020        2019  
Fair value of options vested
  $ 3        $ 7        $ 10  
Intrinsic value of options exercised
    27          11          95  
Cash received from options exercised
    43          14          88  
Tax benefit realized from options exercised
    7          3          24  
To satisfy option exercises, the Company predominantly uses treasury stock.
Additional information regarding stock options outstanding as of December 31, 2021, is as follows:
 
    Outstanding Options        Exercisable Options  
Range of Exercise Prices   Shares        Weighted-
Average
Remaining
Contractual
Life (Years)
       Weighted-
Average
Exercise
Price
       Shares        Weighted-
Average
Exercise
Price
 
$25.01—$30.00
    251,126          .1        $ 28.63          251,126        $ 28.63  
$30.01—$35.00
    446,538          1.1          33.98          446,538          33.98  
$35.01—$40.00
    1,051,053          4.1          39.49          1,051,053          39.49  
$40.01—$45.00
    1,269,994          2.7          42.43          1,269,994          42.43  
$45.01—$50.00
                                         
$50.01—$55.01
    871,420          5.1          54.96          871,420          54.96  
 
    3,890,131          3.3        $ 42.58          3,890,131        $ 42.58  
Restricted Stock and Unit Awards
A summary of the status of the Company’s restricted shares of stock and unit awards is presented below:
 
    2021        2020        2019  
Year Ended December 31   Shares      Weighted-
Average Grant-
Date Fair
Value
       Shares      Weighted-
Average Grant-
Date Fair
Value
       Shares      Weighted-
Average Grant-
Date Fair
Value
 
Outstanding at beginning of period
    6,343,313      $ 51.38          6,606,833      $ 48.99          6,719,298      $ 48.17  
Granted
    4,512,995        52.54          3,552,923        53.90          3,519,474        50.45  
Vested
    (3,793,978      53.27          (3,534,770      49.28          (3,270,778      48.69  
Cancelled
    (249,577      52.83          (281,673      53.51          (361,161      50.55  
Outstanding at end of period
    6,812,753      $ 51.04          6,343,313      $ 51.38          6,606,833      $ 48.99  
The total fair value of shares vested was $191 million, $182 million and $175 million for the years ended December 31, 2021, 2020 and 2019, respectively. Stock-based compensation expense was $207 million, $189 million and $178 million for the years ended December 31, 2021, 2020 and 2019, respectively. On an
after-tax
basis, stock-based compensation was $155 million, $142 million and $133 million for the years ended
December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, there was $155 million of total unrecognized compensation cost related to nonvested share-based arrangements granted under the plans. That cost is expected to be recognized over a weighted-average period of 1.9 years as compensation
expense.​​​​​​​