Stock-Based Awards and Other Equity Instruments

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Awards and Other Equity Instruments

NOTE 9 — Stock-Based Awards and Other Equity Instruments

Pursuant to the Amended and Restated Expedia Group, Inc. 2005 Stock and Annual Incentive Plan, we may grant restricted stock, restricted stock awards, RSUs, stock options and other stock-based awards, such as PSUs, to directors, officers, employees and consultants. As of December 31, 2021, we had approximately 9 million shares of common stock reserved for new stock-based awards under the 2005 Stock and Annual Incentive Plan. We issue new shares to satisfy the exercise or release of stock-based awards.

The following table presents a summary of RSU activity:

	RSUs	Weighted Average Grant-Date Fair Value
	(In thousands)
Balance as of December 31, 2020	5,037	102.69
Granted	5,232	163.60
Vested	(3,209)	124.86
Cancelled	(1,238)	125.65
Balance as of December 31, 2021	5,822	140.33

The total market value of shares vested during the years ended December 31, 2021, 2020 and 2019 was $503 million, $172 million and $117 million.

The following table presents a summary of PSU activity:

	PSUs	Weighted Average Grant-Date Fair Value
	(In thousands)
Balance as of December 31, 2020	248	86.33
Granted	216	192.50
Vested	(4)	87.90
Cancelled	(80)	150.19
Balance as of December 31, 2021	380	133.42

The following table summarizes the estimated vesting, as of December 31, 2021, of PSUs granted in 2021 and 2020, net of forfeiture and vesting since the respective grant dates:

Performance Share Units, by grant year	2021	2020
	(In thousands)
Shares probable to be issued	66	314
Shares not subject to the achievement of minimum performance thresholds	—	92
Shares that could be issued if maximum performance thresholds are met	341	314

The following table presents a summary of our stock option activity:

	Options	Weighted Average Exercise Price	Remaining Contractual Life	Aggregate Intrinsic Value
	(In thousands)		(In years)	(In millions)
Balance as of December 31, 2020	8,696	105.75
Granted	2,275	157.18
Exercised	(4,968)	103.11
Cancelled	(812)	116.29
Balance as of December 31, 2021	5,191	129.17	4.0	$	268
Exercisable as of December 31, 2021	2,146	108.10	2.0	156
Vested and expected to vest after December 31, 2021	5,191	129.17	4.0	268

The aggregate intrinsic value of outstanding options shown in the stock option activity table above represents the total pretax intrinsic value at December 31, 2021, based on our closing stock price of $180.72 as of the last trading date in 2021. The total intrinsic value of stock options exercised was $302 million, $74 million and $145 million for the years ended December 31, 2021, 2020 and 2019.

The fair value of stock options granted during the year ended December 31, 2021 were estimated at the date of grant using the Black-Scholes option-pricing model, assuming the following weighted average assumptions:

Risk-free interest rate	0.82		%
Expected volatility	42.64		%
Expected life (in years)	5.13
Dividend yield	—		%
Weighted-average estimated fair value of options granted during the year	$	60.39

There were no options granted during 2020 and options granted in 2019 were immaterial.

In 2021, 2020 and 2019, we recognized total stock-based compensation expense of $418 million, $205 million and $241 million. The total income tax benefit related to stock-based compensation expense was $157 million, $44 million and $55 million for 2021, 2020 and 2019. We capitalized $68 million, $36 million and $30 million of stock-based compensation expense associated with the cost of developing internal-use software in 2021, 2020 and 2019.

Cash received from stock-based award exercises for the years ended December 31, 2021 and 2020 was $476 million and $301 million. Total current income tax benefits during the years ended December 31, 2021 and 2020 associated with the exercise of stock-based awards held by our employees were $28 million and $1 million.

As of December 31, 2021, there was approximately $881 million of unrecognized stock-based compensation expense related to unvested stock-based awards, which is expected to be recognized in expense over a weighted-average period of 2.92 years.

Employee Stock Purchase Plan

We have an Employee Stock Purchase Plan (“ESPP”), which allows shares of our common stock to be purchased by eligible employees at three-month intervals at 85% of the fair market value of the stock on the last day of each three-month period. Eligible employees were allowed to contribute up to 15% of their base compensation. During 2021, 2020 and 2019, approximately 194,000, 212,000, and 171,000 shares were purchased under this plan for an average price of $135.38, $84.89 and $99.41 per share. During 2021, our Board of Directors approved an increase in the number of shares reserved for issuance under the ESPP of 1 million shares. As of December 31, 2021, we have reserved approximately 1.2 million shares of our common stock for issuance under the ESPP.