Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Summary of Share-Based Compensation Expense

The following table shows the total share-based compensation expense resulting from equity awards and the 15.0% discount for the ESPP for the three and nine months ended September 30, 2020 and 2019 which is included in compensation and benefits expense in the Condensed Consolidated Statements of Income:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(in millions)
Share-based compensation expense before income taxes	$	24	$	21	$	64	$	57
Income tax benefit	(7)		(6)		(17)		(16)
Share-based compensation expense after income taxes	$	17	$	15	$	47	$	41

Summary of Restricted Stock Activity

The following table summarizes our restricted stock activity for the nine months ended September 30, 2020:

	Restricted Stock
	Number of Awards	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2020	1,486,756	$	77.38
Granted	729,448	$	89.36
Vested	(446,550)	$	71.91
Forfeited	(67,013)	$	80.40
Unvested at September 30, 2020	1,702,641	$	83.82

Summary of Stock Options, Valuation Assumptions

The following weighted-average assumptions were used to determine the weighted-average fair values of the PSU awards granted under the three-year PSU program for the nine months ended September 30, 2020:

	Nine Months Ended September 30,
	2020		2019
Weighted-average risk free interest rate(1)	0.27	%	2.26	%
Expected volatility(2)	27.4	%	16.5	%
Weighted-average grant date share price	$92.34		$89.00
Weighted-average fair value at grant date	$111.50		$97.65

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(1)    The risk-free interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.

(2)     We use historic volatility for PSU awards issued under the three-year PSU program, as implied volatility data could not be obtained for all the companies in the peer groups used for relative performance measurement within the program.

Summary of PSU Activity

The following table summarizes our PSU activity for the nine months ended September 30, 2020:

	PSUs
	One-Year Program			Three-Year Program
	Number of Awards	Weighted-Average Grant Date Fair Value		Number of Awards	Weighted-Average Grant Date Fair Value
Unvested at January 1, 2020	317,251	$	80.87	797,451	$	98.31
Granted(1)	26,780	$	84.17	320,328	$	107.42
Vested	(10,104)	$	75.85	(300,767)	$	81.57
Forfeited	(26,984)	$	82.27	(6,557)	$	97.33
Unvested at September 30, 2020	306,943	$	81.20	810,455	$	108.13

____________

(1)    For both the one-year and the three-year PSU programs, includes additional awards granted based on overachievement of performance parameters. For the three-year PSU program, also includes target awards granted.

Summary of Stock Option Activity

A summary of stock option activity for the nine months ended September 30, 2020 is as follows:

	Number of Stock Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2020	379,102	$	54.32	5.27	$	20
Exercised	(80,378)	23.82
Forfeited	(435)	19.75
Outstanding and exercisable at September 30, 2020	298,289	$	62.59	5.69	$	18