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Share-Based Compensation And Other Compensation Arrangements
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Share-Based Compensation And Other Compensation Arrangements Share-Based Compensation and Other Compensation Arrangements
Share-Based Compensation
Our 2003 Incentive Stock Plan, as amended and restated, permits awards of incentive and non-qualified stock options, stock appreciation rights, restricted stock or units, performance shares, performance restricted stock or units, performance units and other stock and cash-based awards to our employees, officers, directors, consultants, and independent contractors. The aggregate number of shares of our stock authorized for issuance under the plan is 87,000,000.
Shares issued as a result of stock option exercises or conversion of stock unit awards will be funded out of treasury shares, except to the extent there are insufficient treasury shares, in which case new shares will be issued. We believe we currently have adequate treasury shares to satisfy these issuances during 2022.
Share-based plans expense is primarily included in Total costs and expenses and General and administrative expense, as well as a portion allocated to production as inventoried costs. The share-based plans expense and related income tax benefit were as follows:
Years ended December 31,202120202019
Recognized in Loss from operations$667 $243 $217 
Recognized in Inventories$173 
Income tax benefit$148 $53 $47 
Stock Options
On February 17, 2021, we granted 342,986 premium-priced stock options to our executive officers as part of our long-term incentive program. These stock options have an exercise price equal to 120% of the fair market value of our stock on the date of grant. The stock options are scheduled to vest and become exercisable three years after the grant date and expire ten years after the grant date. If an executive terminates employment because of retirement, layoff, disability or death, the executive (or beneficiary) may receive some or all of their stock options depending on certain age and service conditions. The fair value of the stock options granted was $74.63 per unit and was estimated using a Monte-Carlo simulation model using the following assumptions: expected life 6.6 years, expected volatility 37.8%, risk free interest rate 1.3% and no expected dividend yield. During 2021, we also granted 148,322 stock options to certain executives to encourage retention or to award various achievements, of which 40,322 had an exercise price equal to 120% of the fair market value of our stock on the date of grant, and the remaining 108,000 had an exercise price equal to the fair market value on the date of grant. These stock options are scheduled to vest and become exercisable three years after the grant date and expire ten years after the grant date. The grant date fair market value of these awards was not significant.
Options granted through January 2014 had an exercise price equal to the fair market value of our stock on the date of grant and expire 10 years after the date of grant. These stock options vested over a period of three years and were fully vested as of December 31, 2017.
Stock option activity for the year ended December 31, 2021 is as follows:
SharesWeighted Average Exercise Price Per ShareWeighted Average Remaining Contractual Life (Years)Aggregate Intrinsic Value
Number of shares under option:
Outstanding at beginning of year1,860,520$75.71 
Granted491,308250.80 
Exercised(570,862)73.93 
Expired(26,663)75.13 
Forfeited(44,924)258.83 
Outstanding at end of year1,709,379$121.83 3.1$158 
Exercisable at end of year1,262,995$76.53 0.8$158 
The total intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019 was $84, $90 and $279, with a related tax benefit of $19, $32 and $61, respectively. At December 31, 2021, there was $19 of total unrecognized compensation cost related to options which is expected
to be recognized over a weighted average period of 2.5 years. No options vested during the years ended December 31, 2021, 2020 and 2019.
Restricted Stock Units
In February 2021, 2020 and 2019, we granted to our executives 980,077, 325,108 and 233,582 restricted stock units (RSUs) as part of our long-term incentive program with grant date fair values of $215.70, $319.04 and $428.22 per unit, respectively. During 2021, we also granted 47,430 RSUs as part of this long-term incentive program. The RSUs granted under this program will generally vest and settle in common stock (on a one-for-one basis) on the third anniversary of the grant date. If an executive terminates employment because of retirement, layoff, disability or death, the employee (or beneficiary) may receive a proration of stock units based on active employment during the three-year service period or all of their stock units depending on certain age and service conditions. In all other cases, the RSUs will not vest and all rights to the stock units will terminate. These RSUs are labeled executive long-term incentive program in the table below.
In December 2020, we granted to our employees (excluding executives and certain union-represented employees), a one-time grant of 5,163,425 RSUs with a grant date fair value of $233.00 per unit. The RSUs granted under this program will vest and settle in common stock (on a one-for-one basis) on the third anniversary of the grant date. If an employee terminates employment because of retirement, layoff, disability or death, the employee (or beneficiary) may receive a proration of stock units based on active employment during the three-year service period. In all other cases, the RSUs will not vest and all rights to the stock units will terminate. These RSUs are labeled employee long-term incentive program in the table below.
In addition to RSUs awarded under our long-term incentive programs, we grant RSUs to certain executives and employees to encourage retention or to reward various achievements. These RSUs are labeled other RSUs in the table below.
The fair values of all RSUs are estimated using the average of the high and low stock prices on the date of grant.
RSU activity for the year ended December 31, 2021 was as follows:
Executive Long-Term Incentive Program Employee Long-Term Incentive ProgramOther
Number of units:
Outstanding at beginning of year1,423,601 5,163,425 749,319 
Granted1,027,507 216,782 
Forfeited(205,400)(378,881)(33,563)
Distributed(196,013)(3,820)(233,672)
Outstanding at end of year2,049,695 4,780,724 698,866 
Undistributed vested units344,125 985,427 16,212 
Unrecognized compensation cost$258 $573 $67 
Weighted average remaining amortization period (years)
1.91.91.9
Performance-Based Restricted Stock Units
Performance-Based Restricted Stock Units (PBRSUs) are stock units that pay out based on the Company’s total shareholder return (TSR) as compared to a group of peer companies over a three-year period. The award payout can range from 0% to 200% of the initial PBRSU grant. The PBRSUs granted under this program will vest at the payout amount and settle in common stock (on a one-for-one basis) on the third anniversary of the grant date. If an executive terminates employment because of retirement, layoff, disability or death, the employee (or beneficiary) remains eligible under the award and, if the award is earned, will receive a proration of stock units based on active employment during the three-year service period. In all other cases, the PBRSUs will not vest and all rights to the stock units will terminate.
In February 2020 and 2019, we granted to our executives 290,202 and 214,651 PBRSUs as part of our long-term incentive program. Compensation expense for the award is recognized over the three-year performance period based upon the grant date fair value. The grant date fair values were estimated using a Monte-Carlo simulation model with the assumptions presented below. The model includes no expected dividend yield as the units earn dividend equivalents.
Grant YearGrant DatePerformance PeriodExpected VolatilityRisk Free Interest RateGrant Date Fair Value
20202/24/20203 years27.04 %1.21 %$357.38 
20192/25/20193 years23.88 %2.46 %466.04 
PBRSU activity for the year ended December 31, 2021 was as follows:
Executive Long-Term Incentive Program
Number of units:
Outstanding at beginning of year621,559 
Performance based adjustment(1)
(203,331)
Forfeited(34,827)
Outstanding at end of year383,401 
Unrecognized compensation cost$36 
Weighted average remaining amortization period (years)
1.1
(1)    Represents net number of units adjusted at vesting based on TSR for units granted in 2018.
Performance Awards
During 2020 and 2019, we granted Performance Awards to our executives, which are cash units that pay out based on the achievement of long-term financial goals at the end of a three-year period. Each unit has an initial value of $100 dollars. The amount payable at the end of the three-year performance period may be anywhere from $0 to $200 dollars per unit for the 2019 Performance Awards and $0 to $150 dollars for 2020 Performance Awards, depending on the Company’s performance against plan for a three-year period. The Compensation Committee has the discretion to pay these awards in cash, stock or a combination of both after the three-year performance period. Compensation expense, based on the estimated performance payout, is recognized ratably over the performance period.
The minimum payout amount is $0, and the maximum amount we could be required to pay out for the 2020 and 2019 Performance Awards is $253 and $323.
Deferred Compensation
The Company has deferred compensation plans which permit certain employees and executives to defer a portion of their salary, bonus, certain other incentive awards and retirement contributions. Participants can diversify these amounts among 23 investment funds including a Boeing stock unit account.
Total expense related to deferred compensation was $126, $93 and $174 in 2021, 2020 and 2019, respectively. As of December 31, 2021 and 2020, the deferred compensation liability which is being marked to market was $1,703 and $1,718.