Stockholders' Equity

12 Months Ended

Sep. 30, 2022

Equity [Abstract]

Stockholders' Equity

Note 15—Stockholders’ Equity

As-converted class A common stock. The number of shares of each series and class, and the number of shares of class A common stock on an as-converted basis were as follows:

	September 30,
	2022					2021
	Shares Outstanding		Conversion Rate Into Class A Common Stock		As-converted Class A Common Stock(1)	Shares Outstanding		Conversion Rate Into Class A Common Stock		As-converted Class A Common Stock(1)
	(in millions, except conversion rate)
Series A preferred stock	—	(2)	100.0000		16	—	(2)	100.0000		7
Series B preferred stock	2		2.9710		7	2		6.3210		16
Series C preferred stock	3		3.6450		12	3		6.8340		22
Class A common stock(3)	1,635		—		1,635	1,677		—		1,677
Class B common stock	245		1.6059	(4)	394	245		1.6228	(4)	398
Class C common stock	10		4.0000		39	10		4.0000		41
Total					2,103					2,161

(1)Figures in the table may not recalculate exactly due to rounding. As-converted class A common stock is calculated based on unrounded numbers.

(2)The number of shares outstanding was less than one million.

(3)Class A common stock shares outstanding reflect repurchases that settled on or before September 30, 2022 and 2021.

(4)The class B to class A common stock conversion rate is presented on a rounded basis. Conversion calculations for dividend payments are based on a conversion rate rounded to the tenth decimal.

Series A preferred stock issuance. In July 2022, the Company issued 176,655 shares of series A preferred stock in connection with the Sixth Anniversary Release. See Note 5—U.S. and Europe Retrospective Responsibility Plans.

Reduction in as-converted shares. Under the terms of the Europe retrospective responsibility plan, the Company is entitled to recover VE territory covered losses through periodic adjustments to the class A common stock conversion rates applicable to the series B and C preferred stock and is required to undertake periodic release assessments following the anniversary of the Visa Europe acquisition to determine if value should be released from the series B and C preferred stock. The recovery and any releases of value have the same economic effect on earnings per share as repurchasing the Company’s class A common stock, because it reduces the series B and C preferred stock conversion rates and consequently, reduces the as-converted class A common stock share count. See Note 5—U.S. and Europe Retrospective Responsibility Plans.

The following table presents the reduction in the number of as-converted series B and C preferred stock after the Company recovered VE territory covered losses through conversion rate adjustments and completed its Sixth Anniversary Release in fiscal 2022 and fourth anniversary release in fiscal 2020 (collectively Anniversary Releases):

	For the Years Ended September 30,
	2022				2021						2020
	Series B		Series C		Series B			Series C			Series B		Series C
	(in millions, except per share data)
Reduction in equivalent number of class A common stock	8		10		—		(1)	—		(1)	16		22
Effective price per share(2)	$	197.93	$	197.50	$	220.84		$	220.71		$	194.31	$	194.33
Recovery through conversion rate adjustment	$	135	$	6	$	35		$	20		$	72	$	92
Anniversary Releases	$	1,510	$	1,982	$	—		$	—		$	3,084	$	4,216

(1)The reduction in equivalent number of shares of class A common stock was less than one million shares.

(2)Effective price per share for each adjustment made during the year is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificates of designations for its series B and C preferred stock. Effective price per share for each fiscal year is calculated using the weighted-average effective prices of the respective adjustments made during the year.

Under the terms of the U.S. retrospective responsibility plan, when the Company funds the U.S. litigation escrow account, the value of the Company’s class B common stock is subject to dilution through a downward adjustment to the rate at which shares of class B common stock convert into shares of class A common stock. See Note 5—U.S. and Europe Retrospective Responsibility Plans.

The following table presents the reduction in the number of as-converted class B common stock after deposits into the U.S. litigation escrow account for fiscal 2022. There was no comparable adjustment recorded for class B common stock for fiscal 2021 and 2020.

	For the Year Ended September 30, 2022
	(in millions, except per share data)
Reduction in equivalent number of class A common stock	4
Effective price per share(1)	$	205.06
Deposits under the U.S. retrospective responsibility plan	$	850

(1)Effective price per share is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificate of incorporation. Effective price per share for the fiscal year is calculated using the weighted-average effective prices of the respective adjustments made during the year.

Common stock repurchases. The following table presents share repurchases in the open market:

	For the Years Ended September 30,
	2022		2021		2020
	(in millions, except per share data)
Shares repurchased in the open market(1)	56		40		44
Average repurchase price per share(2)	$	206.47	$	219.03	$	183.00
Total cost(2)	$	11,589	$	8,676	$	8,114

(1)Shares repurchased in the open market reflect repurchases that settled during fiscal 2022, 2021 and 2020. All shares repurchased in the open market have been retired and constitute authorized but unissued shares.

(2)Figures in the table may not recalculate exactly due to rounding. Average repurchase price per share and total cost are calculated based on unrounded numbers.

In January 2021, the Company’s board of directors authorized a $8.0 billion share repurchase program and in December 2021, authorized an additional $12.0 billion share repurchase program (December 2021 Program). As of September 30, 2022, the Company’s December 2021 Program had remaining authorized funds of $5.2 billion. All share repurchase programs authorized prior to the December 2021 Program have been completed. In October 2022, the Company’s board of directors authorized a new $12.0 billion share repurchase program. These authorizations have no expiration date.

Dividends. In fiscal 2022, 2021 and 2020, the Company declared and paid dividends of $3.2 billion, $2.8 billion and $2.7 billion, respectively. On October 21, 2022, the Company’s board of directors declared a quarterly cash dividend of $0.45 per share of class A common stock (determined in the case of class B and C common stock and series A, B and C preferred stock on an as-converted basis), which will be paid on December 1, 2022, to all holders of record as of November 11, 2022.

Class B common stock. The class B common stock is not convertible or transferable until the date on which all of the U.S. covered litigation has been finally resolved. This transfer restriction is subject to limited exceptions, including transfers to other holders of class B common stock. After termination of the restrictions, the class B common stock will be convertible into class A common stock if transferred to a person that was not a Visa Member (as defined in the current certificate of incorporation) or similar person or an affiliate of a Visa Member or similar person. Upon such transfer, each share of class B common stock will automatically convert into a number of shares of class A common stock based upon the applicable conversion rate in effect at the time of such transfer.

Adjustment of the conversion rate occurs upon: (i) the completion of any follow-on offering of class A common stock completed to increase the size of the U.S. litigation escrow account (or any cash deposit by the Company in lieu thereof) resulting in a further corresponding decrease in the conversion rate; or (ii) the final resolution of the U.S. covered litigation and the release of funds remaining on deposit in the U.S. litigation escrow account to the Company resulting in a corresponding increase in the conversion rate. See Note 5—U.S. and Europe Retrospective Responsibility Plans.

Class C common stock. There are no existing transfer restrictions on class C common stock. As of September 30, 2022, a total of 142 million shares have been converted from class C to class A common stock upon their sale into the public market.

Preferred stock. In connection with the Visa Europe acquisition, three series of preferred stock of the Company were created. Upon issuance, all of the preferred stock participate on an as-converted basis in regular quarterly cash dividends declared on the Company’s class A common stock. Preferred stock may be issued as redeemable or non-redeemable, and has preference over any class of common stock with respect to the payment of dividends and distribution of the Company’s assets in the event of a liquidation or dissolution.

The series B and C preferred stock is convertible upon certain conditions into shares of class A common stock or series A preferred stock. The shares of series B and C preferred stock are subject to restrictions on transfer and may become convertible in stages based on developments in the VE territory covered litigation. The shares of series B and C preferred stock will become fully convertible on the 12th anniversary of the closing of the Visa Europe acquisition, subject only to a holdback to cover any then-pending claims. Upon any such conversion of the series B and C preferred stock (whether by such 12th anniversary, or thereafter with respect to claims pending on such anniversary), the conversion rate would be adjusted downward and the holder would receive either class A common stock or series A preferred stock (for those who are not eligible to hold class A common stock pursuant to the Company’s charter). The conversion rates may also be reduced from time to time to offset certain liabilities.

The series A preferred stock, generally designed to be economically equivalent to the Company’s class A common stock, is freely transferable and each share of series A preferred stock will automatically convert into 100 shares of class A common stock upon a transfer to any holder that is eligible to hold class A common stock under the charter. See Note 5—U.S. and Europe Retrospective Responsibility Plans.

Voting rights. The holders of the series B and C preferred stock have no right to vote on any matters, except for certain defined matters, including, in specified circumstances, any consolidation, merger, combination or similar transaction of the Company in which the preferred stockholders would either (i) receive shares of common stock or other equity securities of the Company with preferences, rights and privileges that are not substantially identical to the preferences, rights and privileges of the applicable series of preferred stock or (ii) receive securities, cash or other property that is different from what the Company’s class A common stockholders would receive. With respect to these limited matters on which the holders of preferred stock may vote, approval by the preferred stockholders requires the affirmative vote of the outstanding voting power of each such series of preferred stock, each such series voting as a single class. In either case, the series B and C preferred stockholders are entitled to cast a number of votes equal to the number of shares held by each such holder. Holders of the series A preferred stock, upon issuance at conversion, will have similar voting rights to the rights of the holders of the series B and C preferred stock.

Class A common stockholders have the right to vote on all matters on which stockholders generally are entitled to vote. Class B and C common stockholders have no right to vote on any matters, except for certain defined matters, including (i) any decision to exit the core payments business, in which case the class B and C common stockholders will vote together with the class A common stockholders in a single class, and (ii) in specified circumstances, any consolidation, merger, combination or similar transaction of the Company, in which case the class B and C common stockholders will vote together as a single class. In either case, the class B and C common stockholders are entitled to cast a number of votes equal to the number of shares of class B or C common stock held multiplied by the applicable conversion rate in effect on the record date. Holders of the Company’s common stock have no right to vote on any amendment to the current certificate of incorporation that relates solely to any series of preferred stock.