Share-Based Compensation

6 Months Ended

Jun. 30, 2017

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

SHARE-BASED COMPENSATION

We recorded share-based compensation expense of $47 million in the 2017 second quarter and $31 million in the 2016 second quarter, $95 million for the 2017 first half, and $59 million for the 2016 first half. Deferred compensation costs for unvested awards totaled $254 million at June 30, 2017 and $192 million at December 31, 2016.

RSUs and PSUs

We granted 1.7 million RSUs during the 2017 first half to certain officers, key employees, and non-employee directors, and those units vest generally over four years in equal annual installments commencing one year after the grant date. We granted 0.2 million PSUs in the 2017 first half to certain executive officers, subject to continued employment and the satisfaction of certain performance conditions based on achievement of pre-established targets for Adjusted EBITDA, RevPAR Index, room openings, and/or net administrative expense over, or at the end of, a three-year performance period. RSUs, including PSUs, granted in the 2017 first half had a weighted average grant-date fair value of $84.

SARs

We granted 0.3 million SARs to officers and key employees during the 2017 first half. These SARs generally expire ten years after the grant date and both vest and may be exercised in four equal annual installments commencing one year following the grant date. The weighted average grant-date fair value of SARs granted in the 2017 first half was $30, and the weighted average exercise price was $88.

We used the following assumptions as part of a binomial lattice-based valuation model to estimate the fair value of the SARs we granted during the 2017 first half:



Expected volatility	30.9	%
Dividend yield	1.3	%
Risk-free rate	2.4	%
Expected term (in years)	8