Share-based Compensation (Tables)

12 Months Ended

Sep. 30, 2013

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used

During fiscal 2013, 2012 and 2011, the fair value of each stock option was estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:



	2013			2012			2011
Expected term (in years)⁽¹⁾	6.08			6.02			5.16
Risk-free rate of return⁽²⁾	0.8		%	1.2		%	1.2		%
Expected volatility⁽³⁾	29.3		%	34.9		%	33.4		%
Expected dividend yield⁽⁴⁾	0.9		%	0.9		%	0.8		%
Fair value per option granted	$	39.03		$	29.65		$	27.50


⁽¹⁾	Based on a set of peer companies that management believes is generally comparable to Visa.


⁽²⁾	Based upon the zero coupon U.S. treasury bond rate over the expected term of the awards.

⁽³⁾

Based on the average of the Company’s implied and historical volatility. As the Company’s publicly-traded stock history is relatively short, historical volatility relies in part on the historical volatility of a group of peer companies that management believes is generally comparable to Visa. The relative weighting between Visa historical volatility and the historical volatility of the peer companies is based on the percentage of years Visa stock price information has been available since its initial public offering compared to the expected term. The expected volatilities ranged from 27% to 29% in fiscal 2013.


⁽⁴⁾	Based on the Company’s annual dividend rate on the date of grant.

Schedule of Share-based Compensation, Options Activity

The following table summarizes the Company’s option activity for fiscal 2013:



	Options		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (1) (in millions)
Outstanding at October 1, 2012	5,185,675		$	59.46
Granted	579,318		$	147.37
Forfeited	(51,766	)	$	109.35
Exercised	(1,796,021	)	$	58.56
Outstanding at September 30, 2013	3,917,206		$	72.21	5.7	$466
Options exercisable at September 30, 2013	2,973,421		$	57.74	4.8	$397
Options exercisable and expected to be vested at September 30, 2013⁽²⁾	3,822,828		$	71.08	5.6	$459


⁽¹⁾	Calculated using the closing stock price on the last trading day of fiscal 2013 of $191.10, less the option exercise price, multiplied by the number of instruments.


⁽²⁾	Applies a forfeiture rate to unvested options outstanding at September 30, 2013 to estimate the number expected to vest in the future.

Restricted Share Activity Disclosure

The following table summarizes the Company's RSA and RSU activity for fiscal 2013:



	Restricted Stock				Weighted- Average Grant Date Fair Value				Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (1) (in millions)
	Awards		Units		RSA		RSU		RSA	RSU	RSA	RSU
Outstanding at October 1, 2012	1,736,989		637,645		$	88.77	$	91.17
Granted	895,659		329,322		$	147.18	$	146.18
Vested	(834,269	)	(289,821	)	$	87.02	$	88.22
Forfeited	(100,398	)	(27,464	)	$	109.62	$	112.27
Outstanding at September 30, 2013	1,697,981		649,682		$	119.20	$	119.49	1.5	1.3	$324	$124


⁽¹⁾	Calculated by multiplying the closing stock price on the last trading day of fiscal 2013 of $191.10 by the number of instruments.

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

The following table summarizes the maximum number of performance-based shares which could be earned and related activity for fiscal 2013:



	Shares		Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (1) (in millions)
Outstanding at October 1, 2012	526,227		$	88.56
Granted⁽²⁾	230,518		$	164.14
Vested and earned	(271,418	)	$	85.87
Unearned	(9,928	)	$	85.05
Forfeited	(15,500	)	$	129.36
Outstanding at September 30, 2013	459,899		$	126.24	1.0	$88


⁽¹⁾	Calculated by multiplying the closing stock price on the last trading day of fiscal 2013 of $191.10 by the number of instruments.


⁽²⁾	Represents the maximum number of performance-based shares which could be earned.

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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