SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2011

SHARE-BASED COMPENSATION [Abstract]

SHARE-BASED COMPENSATION [Text Block]

15.       SHARE-BASED COMPENSATION

In May 2007, our shareholders approved the establishment of the AXIS Capital Holdings Limited 2007 Long-Term Equity Compensation Plan (“2007 Plan”). The 2007 Plan provides for, among other things, the grant of restricted stock, restricted stock units, non-qualified and incentive stock options, and other equity-based awards to our employees and directors. In May 2009, our shareholders approved an amendment to the 2007 Plan, resulting in an increase in the total number of common shares authorized for issuance by 4,000,000 for a total of 9,000,000 common shares. As a result of the adoption of the 2007 Plan, the 2003 Long-Term Equity Compensation and 2003 Directors Long-Term Equity Compensation Plan were terminated, except that all related outstanding awards will remain in effect.

We currently issue restricted stock and restricted stock units to our employees with service conditions only, vesting generally over a period of four years with 25% of the award vesting annually. Grants provided under the 2007 Plan allows for accelerated vesting provisions upon the employee's death, permanent disability, or certain terminations following a change in control of the Company occurring within a 24 month period of the change in control event.Notwithstanding these vesting provisions, the Compensation Committee of our Board has broad authority to accelerate vesting at its own discretion.

For our non-management directors, we issue common shares under the 2007 Plan with no restriction.Subsequent to December 31, 2011 and up to February7, 2012 we granted a total of 1,850,607restricted stock and restricted stock units to our employees and non-management directors. At February 7, 2012, 678,319equity-based awards remain available for grant under the 2007 Plan.

We have granted stock options under the 2003 Plans; however none have been issued since 2005. All outstanding stock options are fully vested and exercisable. These options expire ten years from the date of grant.

a)        Restricted Stock

The following table provides a reconciliation of the beginning and ending balance of nonvested restricted stock (including restricted stock units) for the year ended December 31, 2011:
		Number of	Weighted Average
		Restricted	Grant Date
		Stock	Fair Value
	Nonvested restricted stock - beginning of year	3,882	$	31.95
	Granted	1,839		36.12
	Vested	(1,822)		34.78
	Forfeited	(83)		29.48
	Nonvested restricted stock - end of year	3,816	$	32.69
(1) Fair value is based on the closing price of our common shares on the New York Stock Exchange on the day of the grant.

During 2011, we granted 1,839,250 restricted stock (2010: 1,496,550; 2009: 1,281,500) to our employees with a weighted average grant-date fair value per share of $36.12(2010: $28.91; 2009: $26.39). At December 31, 2011, the total nonvested restricted stock in the above table included378,937of restricted stock units (2010: 289,875).

During 2011, we incurred a compensation cost of $39million (2010: $37 million; 2009: $48 million) in respect of restricted stock and restricted stock units, and recorded tax benefits thereon of $7 million (2010: $6 million; 2009: $6 million). The total fair value of shares vested during 2011 was $63 million (2010: $56 million; 2009: $57 million). At December 31, 2011, we had 3,815,975 (2010: 3,882,303) nonvested restricted stock outstanding with $86 million (2010: $61 million) of unrecognized compensation cost. These are expected to be recognized over the weighted average period of 2.6 years (2010: 2.6years).

b)        Stock options

The following is a summary of stock options outstanding and exercisable at December 31, 2011 and related activity for the year ended:
					Weighted
			Weighted		Average
		Number	Average		Remaining		Aggregate
		of Stock	Exercise		Contractual		Intrinsic
		Options	Price		Term		Value(1)
	Outstanding and exercisable - beginning of year	2,318	$	22.26
	Granted	-		-
	Exercised	(650)		15.98
	Expired	-		-
	Outstanding and exercisable - end of year	1,668	$	24.71	2.09	$	12,095
(1) The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between our closing stock price at December 31, 2011 and the exercisable price, multiplied by the number of in-the-money-options) that would have been received by the stock option holder had all stock option holders exercised their stock options on December 31, 2011.

The total intrinsic value of stock options exercised during 2011 was $9 million (2010: $4 million) and we received proceeds of $5 million (2010: $8 million). For these exercised stock options, we issued new shares from the authorized share capital pool rather than from our treasury pool.