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SHARE-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
SHARE-BASED COMPENSATION
NOTE 17. SHARE-BASED COMPENSATION. We grant stock options, restricted stock units and performance share units to employees under the 2007 Long-Term Incentive Plan. Grants made under all plans must be approved by the Management Development and Compensation Committee of GE’s Board of Directors, which is composed entirely of independent directors. We record compensation expense for awards expected to vest over the vesting period. We estimate forfeitures based on experience and adjust expense to reflect actual forfeitures. When options are exercised and restricted stock units vest, we issue shares from treasury stock.

Stock options provide employees the opportunity to purchase GE shares in the future at the market price of our stock on the date the award is granted (the strike price). The options become exercisable over the vesting period (typically three or five years) and expire 10 years from the grant date if not exercised. Restricted stock units (RSU) provide an employee with the right to receive shares of GE stock when the restrictions lapse over the vesting period. Upon vesting, each RSU is converted into GE common stock on a one-for-one basis. Performance share units (PSU) and performance shares provide an employee with the right to receive shares of GE stock based upon achievement of certain performance or market metrics. Upon vesting (if applicable), each PSU is converted into GE common stock on a one-for-one basis. We value stock options using a Black-Scholes option pricing model, RSUs using market price on grant date, and PSUs and performance shares using both market price on grant date and a Monte Carlo simulation as needed based on performance metrics.
WEIGHTED AVERAGE GRANT DATE FAIR VALUE
202020192018
Stock options$3.58 $3.48 $3.00 
RSUs7.91 10.12 13.96 
PSUs/Performance shares7.91 10.73 4.80

Key assumptions used in the Black-Scholes valuation for stock options include: risk free rates of 1.0%, 2.5%, and 2.8%, dividend yields of 0.4%, 0.4%, and 2.3%, expected volatility of 36%, 33%, and 32%, expected lives of 6.1 years, 6.0 years, and 5.9 years, and strike prices of $10.56, $10.00, and $12.13 for 2020, 2019, and 2018, respectively.
STOCK-BASED COMPENSATION ACTIVITY
Stock options
RSUs
Shares (in millions)
Weighted average exercise price
Weighted average contractual term (in years)
Intrinsic value (in millions)
Shares (in millions)
Weighted average grant date fair value
Weighted average contractual term (in years)
Intrinsic value (in millions)
Outstanding at January 1, 2020
458 $18.66 28 $13.29 
Granted36 10.56 46 7.91 
Exercised(1)7.48 (10)14.44 
Forfeited(15)11.12 (4)11.80 
Expired(78)19.14 N/AN/A
Outstanding at December 31, 2020
400 $18.16 4.5$156 60 $9.04 2.1$653 
Exercisable at December 31, 2020
305 $20.28 3.3$62 N/AN/AN/AN/A
Expected to vest90 $11.50 8.2$87 49 $9.41 1.9$533 

Total outstanding PSUs and performance shares at December 31, 2020 were 21 million shares with a weighted average fair value of $8.62. The intrinsic value and weighted average contractual term of PSUs and performance shares outstanding were $232 million and 3.0 years, respectively.
202020192018
Compensation expense (after-tax)(a)(b)$353 $400 $336 
Cash received from stock options exercised6 69 24 
Intrinsic value of stock options exercised and RSUs vested81 154 83 
(a)Unrecognized compensation cost related to unvested equity awards as of December 31, 2020 was $543 million, which will be amortized over a weighted average period of 1.3 years.
(b)Income tax benefit recognized in earnings was $10 million, $20 million and $40 million in 2020, 2019, and 2018, respectively.