Stock-Based Compensation

3 Months Ended

Mar. 31, 2017

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

Stock-Based Compensation

STOCK-BASED COMPENSATION (Entergy Corporation)

Entergy grants stock and stock-based awards, which are described more fully in Note 12 to the financial statements in the Form 10-K.  Awards under Entergy’s plans generally vest over three years.

Effective January 1, 2017, Entergy adopted ASU 2016-09, which permits the election of an accounting policy change to the method of recognizing forfeitures of stock-based compensation. Previously, Entergy recorded an estimate of the number of forfeitures expected to occur each period. Entergy elected to change this policy to account for forfeitures when they occur. This accounting change was applied retrospectively, but did not result in an adjustment to retained earnings as of January 1, 2017.

Stock Options

Entergy granted options on 791,900 shares of its common stock under the 2015 Equity Ownership Plan during the first quarter 2017 with a weighted-average fair value of $6.54 per option.  As of March 31, 2017, there were options on 6,263,626 shares of common stock outstanding with a weighted-average exercise price of $81.50.  The intrinsic value, which has no effect on net income, of the outstanding stock options is calculated by the positive difference between the weighted average exercise price of the stock options granted and Entergy Corporation’s common stock price as of March 31, 2017.  Because Entergy’s stock price at March 31, 2017 was less than the weighted average exercise price, the aggregate intrinsic value of the stock options outstanding as of March 31, 2017 was zero. The intrinsic value of all “in the money” stock options was $19.8 million as of March 31, 2017.    

The following table includes financial information for outstanding stock options for the three months ended March 31, 2017 and 2016:

	2017		2016
	(In Millions)
Compensation expense included in Entergy’s net income		$1.1		$1.1
Tax benefit recognized in Entergy’s net income		$0.4		$0.4
Compensation cost capitalized as part of fixed assets and inventory		$0.2		$0.2

Other Equity Awards

In January 2017 the Board approved and Entergy granted 379,850 restricted stock awards and 220,450 long-term incentive awards under the 2015 Equity Ownership Plan.  The restricted stock awards were made effective as of January 26, 2017 and were valued at $70.53 per share, which was the closing price of Entergy’s common stock on that date.  One-third of the restricted stock awards will vest upon each anniversary of the grant date.  In addition, long-term incentive awards were granted in the form of performance units that represent the value of, and are settled with, one share of Entergy Corporation common stock at the end of the three-year performance period, plus dividends accrued during the performance period on the number of performance units earned.  The performance units were granted effective as of January 26, 2017 and were valued at $71.40 per share.  Entergy considers various factors, primarily market conditions, in determining the value of the performance units.  Shares of restricted stock have the same dividend and voting rights as other common stock, are considered issued and outstanding shares of Entergy upon vesting, and are expensed ratably over the 3-year vesting period.  Performance units have the same dividend rights as shares of Entergy common stock, are considered issued and outstanding shares of Entergy upon vesting, and are expensed ratably over the 3-year vesting period.

The following table includes financial information for other outstanding equity awards for the three months endedMarch 31, 2017 and 2016:

	2017		2016
	(In Millions)
Compensation expense included in Entergy’s net income		$8.2		$8.4
Tax benefit recognized in Entergy’s net income		$3.1		$3.2
Compensation cost capitalized as part of fixed assets and inventory		$2.0		$1.8