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Long-Term Incentive Plans
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Long-Term Incentive Plans Long-Term Incentive Plans
The Company has used long-term incentive plans for the purpose of granting equity awards to employees of the Company, including officers, and non-employees, including non-employee members of the Company's board of directors (collectively, "Participants"). The Participants may receive awards as determined by a committee of independent members of the Company's board of directors or, to the extent authorized by such committee with respect to certain Participants, a duly authorized employee (collectively, the "Committee"). The incentive plan currently used by the Company is the Second Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (the "Second Amended and Restated 2014 Incentive Plan"). It was most recently adopted and approved by the Company's shareholders in 2020. As of the most recent shareholder approval date, the Second Amended and Restated 2014 Incentive Plan provided for the issuance of up to 22.3 million shares of Common Stock in respect of awards. In addition, upon expiration, forfeiture, surrender, exchange, cancellation, or termination of any award previously granted under the Amended and Restated Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (the "Amended and Restated 2014 Incentive Plan"), the Regeneron Pharmaceuticals, Inc. 2014 Long-Term Incentive Plan (the "Original 2014 Incentive Plan"), or the Second Amended and Restated 2000 Long-Term Incentive Plan (the "2000 Incentive Plan"), any shares subject to such award are added to the pool of shares available for grant under the Second Amended and Restated 2014 Incentive Plan.
The awards that may be made under the Second Amended and Restated 2014 Incentive Plan include: (a) incentive stock options and non-qualified stock options, (b) restricted stock awards, (c) shares of phantom stock (also referred to as restricted stock units, which may be time- or performance-based), and (d) other awards. Any award granted may (but is not required to) be subject to vesting based on the attainment by the Company of performance goals pre-established by the Committee.
Stock option awards grant Participants the right to purchase shares of Common Stock at prices determined by the Committee, with exercise prices that are equal to or greater than the average of the high and low market prices of the Company's Common Stock on the date of grant (the "Market Price"). Options vest over a period of time determined by the Committee, generally on a pro rata basis over a four-year period. The Committee also determines the expiration date of each option. The maximum term of options that have been awarded under the 2000 Incentive Plan, the Original 2014 Incentive Plan, the Amended and Restated 2014 Incentive Plan, and the Second Amended and Restated 2014 Incentive Plan (collectively, the "Incentive Plans") is ten years.
Restricted stock awards grant Participants shares of restricted Common Stock or allow Participants to purchase such shares at a price determined by the Committee. Such shares are nontransferable for a period determined by the Committee ("vesting period"). Should employment terminate, as specified in the Incentive Plans, except as determined by the Committee in its discretion and subject to the applicable Incentive Plan documents, the ownership of any unvested restricted stock awards will be transferred to the Company.
Phantom stock awards provide the Participant the right to receive Common Stock or an amount of cash based on the value of the Common Stock at a future date. The award is subject to such restrictions, if any, as the Committee may impose at the date of grant or thereafter, including a specified period of employment or the achievement of performance goals. Time-based restricted stock units and performance-based restricted stock units are each a type of phantom stock award permitted under the Second Amended and Restated 2014 Incentive Plan.
The Incentive Plans contain provisions that allow for the Committee to provide for the immediate vesting of awards upon a change in control of the Company, as defined in the Incentive Plans.
As of December 31, 2021, there were 17.9 million shares available for future grants under the Second Amended and Restated 2014 Incentive Plan. No additional awards may be made under the 2000 Incentive Plan, the Original 2014 Incentive Plan, or the Amended and Restated 2014 Incentive Plan.
a.     Stock Options
Transactions involving stock option awards during 2021 under the Company's Incentive Plans are summarized in the table below.
Number of Shares
(In millions)
Weighted-Average Exercise Price
Weighted-Average Remaining Contractual Term
(In years)
Intrinsic Value
(In millions)
Outstanding as of December 31, 202021.7 $379.51 
2021:Granted2.3 $628.43 
Forfeited(0.4)$419.51 
Exercised(5.6)$299.23 
Outstanding as of December 31, 202118.0 $435.56 6.5$3,654.5 
Vested and expected to vest as of December 31, 202117.2 $431.33 6.3$3,566.6 
Exercisable as of December 31, 202111.3 $398.83 5.2$2,697.6 
The Company satisfies stock option exercises with newly issued shares of the Company's Common Stock. The total intrinsic value of stock options exercised during 2021, 2020, and 2019 was $1.707 billion, $2.251 billion, and $558.9 million, respectively. The intrinsic value represents the amount by which the market price of the underlying stock exceeds the exercise price of an option.
The table below summarizes the weighted-average exercise prices and weighted-average grant-date fair values of options issued during the years ended December 31, 2021, 2020, and 2019.
Number of Options Granted
(In millions)
Weighted-Average Exercise PriceWeighted-Average Fair Value
2021:
Exercise price equal to Market Price2.3 $628.43 $174.20 
2020:
Exercise price equal to Market Price2.9 $492.60 $126.50 
2019:
Exercise price equal to Market Price3.3 $366.65 $100.80 
For the years ended December 31, 2021, 2020, and 2019, the Company recognized $328.7 million, $329.5 million, and $422.8 million, respectively, of non-cash stock-based compensation expense related to stock option awards (net of amounts capitalized as inventory, which were not material for each of the three years). As of December 31, 2021, there was $515.9 million of stock-based compensation cost related to unvested stock options, net of estimated forfeitures, which had not yet been recognized. The Company expects to recognize this compensation cost over a weighted-average period of 1.8 years.
Fair Value Assumptions:
The following table summarizes the weighted average values of the assumptions used in computing the fair value of option grants during 2021, 2020, and 2019.
202120202019
Expected volatility27 %28 %28 %
Expected lives from grant date5.5 years5.0 years5.0 years
Expected dividend yield0 %0 %0 %
Risk-free interest rate1.22 %0.47 %1.74 %
Expected volatility has been estimated based on actual movements in the Company's stock price over the most recent historical periods equivalent to the options' expected lives. Expected lives are principally based on the Company's historical exercise experience with previously issued employee and board of directors' option grants. The expected dividend yield is zero as the Company has never paid dividends and does not currently anticipate paying any in the foreseeable future. The risk-free interest rates are based on quoted U.S. Treasury rates for securities with maturities approximating the options' expected lives.
b.     Restricted Stock Awards and Time-Based Restricted Stock Units
A summary of the Company's activity related to restricted stock awards and time-based restricted stock units (excluding performance-based restricted stock units, which are detailed further below) (collectively, "restricted stock") during 2021 is summarized below.
Number of Shares/Units
(In millions)
Weighted-Average Grant
Date Fair Value
Balance as of December 31, 20201.7 $421.58 
2021:Granted0.7 $633.31 
Vested(0.2)$374.17 
Forfeited(0.1)$440.08 
Balance as of December 31, 20212.1 $499.85 
The Company recognized non-cash stock-based compensation expense related to restricted stock of $221.0 million, $102.5 million, and $29.7 million in 2021, 2020, and 2019, respectively (net of amounts capitalized as inventory, which were not material for each of the three years). As of December 31, 2021, there was $649.1 million of stock-based compensation cost related to
unvested restricted stock which had not yet been recognized. The Company expects to recognize this compensation cost over a weighted-average period of 2.4 years.
c.     Performance-based Restricted Stock Units
Performance-based restricted stock units ("PSUs") have been granted to certain executive officers of the Company. The PSUs will be earned based upon the achievement of predetermined, cumulative total shareholder return goals with respect to the Company's Common Stock price over a specified (generally five-year) period beginning on the grant date. The number of PSUs granted represents the maximum number of units that are eligible to be earned. Depending on the terms of the PSUs and the outcome of the performance goals, a recipient may ultimately earn 0% to 250% (as specified for each PSU grant) of the target number of PSUs granted. As of December 31, 2021 and 2020, 1.3 million PSUs were outstanding with a weighted-average grant date fair value of $209.06 per unit. During the year ended December 31, 2021, the Company did not grant new PSUs and no PSUs were vested, forfeited, or cancelled.
The Company recognized non-cash stock-based compensation expense related to PSUs of $52.0 million and $11.7 million in 2021 and 2019, respectively. The Company did not recognize non-cash stock-based compensation expense related to PSUs in 2020 (as PSUs granted in 2020 were granted on December 31, 2020 and are expensed over the vesting period). As of December 31, 2021, there was $208.0 million of stock-based compensation cost related to unvested PSUs which had not yet been recognized. The Company expects to recognize this compensation cost on a straight-line basis over a period of 4.0 years.
Fair Value Assumptions:
The following table summarizes the weighted average values of the assumptions used in computing the fair value of PSUs that were granted during 2020 and 2019.
20202019
Expected volatility35%33%
Expected dividend yield0%0%
Risk-free interest rate0.36%1.63%