Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation

12. Stock-Based Compensation

The components of the Company’s stock-based compensation expense are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollar amounts in millions)	2012		2011		2012		2011
Stock-based compensation:
Restricted stock and restricted stock units (“RSUs”)	$	104	$	115	$	328	$	323
Long-term incentive plans funded by PNC		5		15		16		43
Stock options		—		3		—		9
Total stock-based compensation	$	109	$	133	$	344	$	375

Restricted Stock and RSUs

Restricted stock and RSU activity for the nine months ended September 30, 2012 is summarized below:

Outstanding at	Restricted Stock and Units			Weighted- Average Grant Date Fair Value
December 31, 2011		5,528,781		$	196.44
Granted		2,481,052		$	166.43
Converted		(1,616,091	)	$	175.84
Forfeited		(145,874	)	$	177.41
September 30, 2012(1)		6,247,868		$	190.31

⁽¹⁾  At September 30, 2012, approximately 5.6 million awards are expected to vest and 0.6 million awards have vested but have not been converted.

The Company values restricted stock and RSUs at their grant-date fair value as measured by BlackRock’s common stock price.

In January 2012, the Company granted the following awards under the BlackRock, Inc. 1999 Stock Award and Incentive Plan:

• 1,365,691 RSUs to employees as part of annual incentive compensation that vest ratably over three years from the date of grant;

• 418,038 RSUs to employees that cliff vest 100% on January 31, 2015; and

• 616,117 RSUs, which will primarily be funded by shares currently held by PNC (see Long-Term Incentive Plans Funded by PNC below). The awards will vest on the fourth, fifth or sixth anniversaries of the grant date subject to pre-determined market conditions being achieved during the six-year term of the award.

At September 30, 2012, there was $448 million in total unrecognized stock-based compensation expense related to unvested RSUs. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of 1.4 years.

Long-Term Incentive Plans Funded by PNC. Under a share surrender agreement, PNC committed to provide up to 4,000,000 shares of BlackRock stock, held by PNC, to fund certain BlackRock long-term incentive plans (“LTIP”). The current share surrender agreement commits PNC to provide BlackRock series C non-voting participating preferred stock to fund the remaining committed shares.

During 2007 through 2011, approximately 2.5 million shares were surrendered, including 1.3 million RSUs, which vested and were funded by PNC on September 29, 2011. At September 30, 2012 approximately 0.2 million shares that vest in January 2013 remain committed by PNC.

At September 30, 2012, the remaining shares committed by PNC, of approximately 1.3 million, are available to fund future long-term incentive awards, including approximately 0.6 million shares of the awards granted in January 2012.

Stock Options

Options outstanding at September 30, 2012 and changes during the nine months ended September 30, 2012 were as follows:

Outstanding at	Shares Under Option			Weighted- Average Exercise Price
December 31, 2011		2,190,907		$	105.33
Exercised		(1,090,998	)	$	42.39
September 30, 2012(1)		1,099,909		$	167.76

⁽¹⁾  At September 30, 2012, all options were vested. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2012 was $157 million.