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Share-based Compensation
 12 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement, Noncash Expense [Abstract]  
Share-based Compensation
Note 17—Share-based Compensation
2007 Equity Incentive Compensation Plan
The Company’s 2007 Equity Incentive Compensation Plan, or the EIP, authorizes the compensation committee of the board of directors to grant non-qualified stock options (“options”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance-based shares to its employees and non-employee directors, for up to 236 million shares of class A common stock. Shares available for award may be either authorized and unissued or previously issued shares subsequently acquired by the Company. The EIP will continue to be in effect until all of the common stock available under the EIP is delivered and all restrictions on those shares have lapsed, unless the EIP is terminated earlier by the Company’s board of directors. Awards may be granted under the plan until January 31, 2022.
For fiscal 2020, 2019 and 2018, the Company recorded share-based compensation cost related to the EIP of $393 million, $388 million and $312 million, respectively, in personnel expense on its consolidated statements of operations. The related tax benefits for fiscal 2020, 2019 and 2018 were $63 million, $59 million and $53 million, respectively.
Options
Options issued under the EIP expire 10 years from the date of grant and primarily vest ratably over 3 years from the date of grant, subject to earlier vesting in full under certain conditions.
During fiscal 2020, 2019 and 2018, 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:
For the Years Ended September 30,
202020192018
Expected term (in years)(1)
4.033.984.00
Risk-free rate of return(2)
1.6 %2.9 %2.0 %
Expected volatility(3)
18.7 %20.2 %18.3 %
Expected dividend yield(4)
0.7 %0.7 %0.7 %
Fair value per option granted$29.37$25.89$18.24
(1)Until March 2018, this assumption was based on the Company’s historical option exercises and those of a set of peer companies that management believed to be generally comparable to Visa. The Company’s data was weighted based on the number of years between the measurement date and Visa’s IPO date as a percentage of the options’ contractual term. The relative weighting placed on Visa’s data and peer data for stock options granted until March 2018 was approximately 97% and 3% in fiscal 2018, respectively. The assumptions for stock options granted after March 2018 was based on Visa’s historical exercise experience as the passage of time since the Company’s IPO has exceeded 10 years.
(2)Based upon the zero coupon U.S. treasury bond rate over the expected term of the awards.
(3)Based on the Company’s implied and historical volatility.
(4)Based on the Company’s annual dividend rate on the date of grant.
The following table summarizes the Company’s option activity for fiscal 2020:
OptionsWeighted-
Average
Exercise Price
Per Share		Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value(1)
(in millions)
Outstanding at September 30, 20195,714,658 $90.18 
Granted1,247,982 $182.50 
Forfeited(67,193)$140.17 
Expired— $— 
Exercised(1,108,898)$63.53 
Outstanding at September 30, 20205,786,549 $114.61 6.87$494 
Options exercisable at September 30, 20203,425,611 $87.28 5.79$386 
Options exercisable and expected to vest at September 30, 2020(2)
5,718,325 $113.96 6.84$492 
(1)Calculated using the closing stock price on the last trading day of fiscal 2020 of $199.97, less the option exercise price, multiplied by the number of instruments.
(2)Applied a forfeiture rate to unvested options outstanding at September 30, 2020 to estimate the options expected to vest in the future.
For the options exercised during fiscal 2020, 2019 and 2018, the total intrinsic value was $146 million, $107 million and $249 million, respectively, and the tax benefit realized was $31 million, $23 million and $55 million, respectively. As of September 30, 2020, there was $22 million of total unrecognized compensation cost related to unvested options, which is expected to be recognized over a weighted-average period of approximately 0.45 years.
Restricted Stock Awards and Restricted Stock Units
RSAs and RSUs issued under the EIP primarily vest ratably over 3 years from the date of grant, subject to earlier vesting in full under certain conditions.

Upon vesting, the RSAs are settled in class A common stock on a one-for-one basis. During the vesting period, RSA award recipients are eligible to receive dividends and participate in the same voting rights as those granted to the holders of the underlying class A common stock. Upon vesting, RSUs can be settled in class A common stock on a one-for-one basis or in cash, or a combination thereof, at the Company’s option. The Company does not currently intend to settle any RSUs in cash. During the vesting period, RSU award recipients are eligible to receive dividend equivalents, but do not participate in the voting rights granted to the holders of the underlying class A common stock. The Company discontinued granting RSAs in fiscal 2016 but will continue to grant RSUs under the EIP. As of September 30, 2018, there were no RSAs outstanding.
The fair value and compensation cost before estimated forfeitures for RSAs and RSUs is calculated using the closing price of class A common stock on the date of grant. The weighted-average grant date fair value of RSUs granted during fiscal 2020, 2019 and 2018 was $183.61, $137.38 and $111.11, respectively. The total grant date fair value of RSAs and RSUs vested during fiscal 2020, 2019 and 2018 was $284 million, $228 million and $183 million, respectively.
The following table summarizes the Company’s RSU activity for fiscal 2020:
 Restricted Stock UnitsWeighted-
Average
Grant Date
Fair Value
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value(1)
(in millions)
Outstanding at September 30, 20195,166,759 $118.79 
Granted
2,352,714 $183.61 
Vested
(2,561,379)$110.73 
Forfeited
(267,594)$147.70 
Outstanding at September 30, 20204,690,500 $154.06 0.83$938 
(1)Calculated by multiplying the closing stock price on the last trading day of fiscal 2020 of $199.97 by the number of instruments.
At September 30, 2020, there was $381 million of total unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately 0.83 years.
Performance-based Shares
For the Company’s performance-based shares, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of both performance and market conditions. The performance condition is based on the Company’s earnings per share target. The market condition is based on the Company’s total shareholder return ranked against that of other companies that are included in the Standard & Poor’s 500 Index. The fair value of the performance-based shares for fiscal 2020, incorporating the market condition, is estimated on the grant date using a Monte Carlo simulation model with the following weighted-average assumptions: risk-free rate of return of 1.6%, expected term of 1.9 years, expected volatility of 20.9% and expected dividend yield of 0.7%. The grant-date fair value of performance-based shares granted in fiscal 2020, 2019 and 2018 was $211.08, $153.42 and $120.11 per share, respectively. Performance-based shares vest over three years and are subject to earlier vesting in full under certain conditions. The total grant date fair value of performance-based shares vested and earned during fiscal 2020, 2019 and 2018 was $65 million, $41 million and $31 million, respectively.
Compensation cost for performance-based shares is initially estimated based on target performance. It is recorded net of estimated forfeitures and adjusted as appropriate throughout the performance period.
The following table summarizes the maximum number of performance-based shares which could be earned and related activity for fiscal 2020:
Shares
Weighted-
Average
Grant Date
Fair Value
Weighted-
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value(1)
(in millions)
Outstanding at September 30, 20191,070,690 $129.08 
Granted(2)
470,128 $211.08 
Vested and earned(546,018)$118.18 
Unearned— $— 
Forfeited— $— 
Outstanding at September 30, 2020994,800 $171.33 0.73$199 
(1)Calculated by multiplying the closing stock price on the last trading day of fiscal 2020 of $199.97 by the number of instruments.
(2)Represents the maximum number of performance-based shares which could be earned.
At September 30, 2020, there was $20 million of total unrecognized compensation cost related to unvested performance-based shares, which is expected to be recognized over a weighted-average period of approximately 0.73 years.
Employee Stock Purchase Plan
The Visa Inc. Employee Stock Purchase Plan (the “ESPP”) permits eligible employees to purchase the Company’s class A common stock at a 15% discount of the stock price on the purchase date, subject to certain restrictions. A total of 20 million shares of class A common stock have been reserved for issuance under the ESPP. In fiscal 2020, 2019 and 2018, the ESPP did not have a material impact on the consolidated financial statements.