STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

We have long-term equity-based incentive plans (the “Plans”) under which stock options, RSUs and PSUs are issued. The purpose of the Plans is to benefit and advance the interests of our company by attracting, retaining and motivating participants and to compensate participants for their contributions to the financial success of our company. The Plans provide for awards of stock options, stock appreciation rights, restricted and unrestricted shares, RSUs, dividend equivalents, performance awards and other equity-related awards. RSUs and PSUs accrue dividends each time we declare a quarterly cash dividend, which are paid upon vesting when the shares are delivered and are forfeited if the award does not vest. Upon exercise of stock options or vesting of RSUs and PSUs, we issue new shares from our existing authorization. At December 31, 2024, there were 38 million shares available for future grant under the Plans. Stock-based compensation awards were also granted under Viacom’s equity incentive plans until December 31, 2020. Upon exercise of outstanding stock options or vesting of RSUs and PSUs previously granted under Viacom’s equity incentive plans, shares may be issued from Viacom’s previous authorization or from treasury stock.

The following table summarizes stock-based compensation expense for the years ended December 31, 2024, 2023 and 2022.


Year Ended December 31,	2024		2023		2022
RSUs and PSUs (a)	$	210	$	172	$	155
Stock options	—		—		3
Expense included in operating and SG&A	210		172		158
Expense included in restructuring charges (b)	35		5		14
Stock-based compensation expense, before income taxes	245		177		172
Related tax benefit	(37)		(35)		(35)
Stock-based compensation expense, net of tax benefit	$	208	$	142	$	137

(a) In connection with the Transactions, certain of the Company’s employees may become entitled to payments and benefits that, in accordance with Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, may not be deductible for tax purposes by the Company and result in an excise tax for the employees. To mitigate the potential tax impacts, the Compensation Committee of the Company’s Board of Directors approved the immediate vesting and settlement in shares of the Company’s Class B Common Stock of (a) 3,414,007 RSUs that were previously granted to 77 employees and scheduled to vest in future years and (b) 634,075 PSUs, comprising the target awards previously-granted with performance periods ending in calendar years 2026 and 2027 for three executives, for which performance-based vesting conditions would otherwise have been deemed achieved at target performance for purposes of the conversion of the PSUs pursuant to the Transaction Agreement. As a result of these modifications, we recorded $31 million of stock-based compensation expense during the three months ended December 31, 2024.

(b) Reflects accelerations as a result of restructuring activities, which are included in “Restructuring, transaction-related items, and other corporate matters” on the Consolidated Statements of Operations.

Included in net earnings from discontinued operations was stock-based compensation expense of $2 million and $3 million for the years ended December 31, 2023 and 2022, respectively.

RSUs and PSUs

Compensation expense for RSUs is determined based upon the market price of the shares underlying the awards on the date of grant and expensed over the vesting period, which is generally a one- to four-year service period.

Forfeitures for RSUs are estimated on the date of grant based on historical forfeiture rates and adjusted based on actual forfeitures. On an annual basis, we revise the estimated forfeiture rate, as necessary.

For PSU awards with a market condition, the number of shares to be issued upon vesting is based on the total shareholder return of the Company’s Class B Common Stock measured against the companies comprising the S&P 500 Index or a defined peer group over a designated measurement period. Certain other PSU awards are based on the achievement of established internal operating goals. The fair value of PSU awards with a market condition is determined using a Monte Carlo simulation model, and is expensed over the required employee service period. Compensation expense for these PSUs is not adjusted for the actual number of shares issued based on the outcome of the market condition for completed performance periods. The fair value of PSU awards with internal performance conditions is based on the market price of the shares on the date of grant, and is expensed based on the probable outcome of internal performance metrics and subsequently adjusted to reflect the actual shares issued based on the outcome of the performance metrics for completed performance periods. For all PSU awards, if the required service period is not completed, the award is forfeited, and compensation expense is adjusted. The fair value of PSU awards granted during the year ended December 31, 2024 was $41 million and during each of the years ended December 31, 2023 and 2022 was $43 million.

The weighted average grant date fair value of RSUs and PSUs granted was $10.97, $22.83 and $31.58 in 2024, 2023, and 2022, respectively. The total market value of RSUs and PSUs that vested during 2024, 2023, and 2022 was $130 million, $74 million and $77 million, respectively. Total unrecognized compensation cost related to non-vested RSUs and PSUs at December 31, 2024 was $183 million, which is expected to be recognized over a weighted average period of 1.74 years.

The following table summarizes our RSU and PSU share activity:


			Weighted Average
	Shares		Grant Date Fair Value
Non-vested at December 31, 2023		15,504,261		$	26.38
Granted (a)		20,970,112		$	10.97
Vested		(12,139,195)		$	20.27
Forfeited		(4,085,536)		$	17.37
Non-vested at December 31, 2024		20,249,642		$	15.90

(a) Grant activity includes 3.6 million of PSUs at target for 2024.

Stock Options

Compensation expense for stock options is determined based on the grant date fair value of the award calculated using the Black-Scholes options-pricing model. Stock options generally vest over a three- to four-year service period and expire eight years from the date of grant. Forfeitures are estimated on the date of grant based on historical forfeiture rates. We adjust the compensation expense based on actual forfeitures.

There were no stock option grants during any of the periods presented.

At December 31, 2024, all stock options are vested and there is no remaining unrecognized compensation cost.

The following table summarizes our stock option activity under the Plans.


			Weighted Average
	Stock Options		Exercise Price
Outstanding and Exercisable at December 31, 2023		3,545,406		$	54.70

Expired		(746,960)		$	55.84
Outstanding and Exercisable at December 31, 2024		2,798,446		$	54.40

There were no stock option exercises during the years ended December 31, 2024, 2023 and 2022.

At December 31, 2024, stock options outstanding and exercisable have a weighted average remaining contractual life of 1.04 years. There was no intrinsic value for options outstanding and exercisable, based on our closing stock price of $10.46 at December 31, 2024.