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Stock-Based Compensation (Tables)
12 Months Ended
Dec. 31, 2019
Stock-Based Compensation  
Stock-Based Compensation Expense

Stock-Based Compensation Expense

Years ended December 31

 

(Millions)

    

2019

    

2018

    

2017

 

Cost of sales

$

47

$

48

$

49

Selling, general and administrative expenses

 

185

 

207

 

229

Research, development and related expenses

 

46

 

47

 

46

Stock-based compensation expenses

$

278

$

302

$

324

Income tax benefits

(141)

(154)

(327)

Stock-based compensation expenses (benefits), net of tax

$

137

$

148

$

(3)

Stock Option Activity

Stock Option Program

The following table summarizes stock option activity for the years ended December 31:

2019

2018

2017

 

    

    

Weighted

    

    

Weighted

    

    

Weighted

 

Number of

Average

Number of

Average

Number of

Average

 

(Options in thousands)

Options

Exercise Price

Options

Exercise Price

Options

Exercise Price

 

Under option —

January 1

 

34,569

$

138.98

 

34,965

$

125.73

 

36,196

$

112.07

Granted:

Annual

 

3,434

 

200.80

 

3,211

 

233.19

 

5,410

 

175.93

Exercised

 

(4,193)

 

89.89

 

(3,482)

 

91.01

 

(6,474)

 

90.37

Forfeited

 

(135)

 

201.27

 

(125)

 

188.00

 

(167)

 

162.36

December 31

 

33,675

$

151.15

 

34,569

$

138.98

 

34,965

$

125.73

Options exercisable

December 31

 

26,487

$

136.75

 

26,117

$

121.98

 

24,281

$

108.50

Stock Option Assumptions

Stock Option Assumptions

Annual

    

2019

    

2018

    

2017

    

Exercise price

$

201.12

$

233.63

$

175.76

Risk-free interest rate

 

2.6

 

2.7

 

2.1

Dividend yield

 

2.5

 

2.4

 

2.5

Expected volatility

 

20.4

 

21.0

 

17.3

Expected life (months)

 

79

 

78

 

78

Black-Scholes fair value

$

34.19

$

41.59

$

23.51

Restricted Stock and Restricted Stock Units Activity

Restricted Stock and Restricted Stock Units

The following table summarizes restricted stock and restricted stock unit activity for the years ended December 31:

2019

2018

2017

 

    

    

    

Weighted

    

    

    

Weighted

    

    

    

Weighted

 

Average

Average

Average

 

Number of

Grant Date

Number of

Grant Date

Number of

Grant Date

 

(Shares in thousands)

Shares

Fair Value

Shares

Fair Value

Shares

Fair Value

 

Nonvested balance —

As of January 1

 

1,789

$

180.02

 

1,994

$

162.60

 

2,185

$

145.64

Granted

Annual

 

564

 

200.41

 

467

 

233.61

 

604

 

176.10

Other

 

15

 

180.08

 

8

 

207.76

 

21

 

233.77

Vested

 

(732)

 

149.33

 

(640)

 

164.83

 

(769)

 

127.21

Forfeited

 

(63)

 

192.52

 

(40)

 

186.48

 

(47)

 

158.25

As of December 31

 

1,573

$

201.11

 

1,789

$

180.02

 

1,994

$

162.60

Performance Shares Activity

The following table summarizes performance share activity for the years ended December 31:

2019

2018

2017

 

    

    

    

Weighted

    

    

    

Weighted

    

    

    

Weighted

 

Average

Average

Average

 

Number of

Grant Date

Number of

Grant Date

Number of

Grant Date

 

(Shares in thousands)

Shares

Fair Value

Shares

Fair Value

Shares

Fair Value

 

Undistributed balance —

As of January 1

 

562

$

188.96

 

686

$

171.90

 

656

$

142.98

Granted

 

166

 

207.49

 

166

 

229.13

 

201

 

191.28

Distributed

 

(210)

 

162.16

 

(206)

 

159.82

 

(314)

 

124.88

Performance change

 

(48)

 

204.73

 

(56)

 

198.39

 

155

 

173.91

Forfeited

 

(26)

 

209.96

 

(28)

 

204.09

 

(12)

 

171.36

As of December 31

 

444

$

205.58

 

562

$

188.96

 

686

$

171.90