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Share-Based Compensation
 3 Months Ended
Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Share-Based Compensation SHARE-BASED COMPENSATION
Long-Term Incentive Plan
The Aptiv PLC Long-Term Incentive Plan, as amended and restated effective April 23, 2015 (the “PLC LTIP”), allows for the grant of awards of up to 25,665,448 ordinary shares for long-term compensation. The PLC LTIP is designed to align the interests of management and shareholders. The awards can be in the form of shares, options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance awards and other share-based awards to the employees, directors, consultants and advisors of the Company. The Company has awarded annual long-term grants of RSUs under the PLC LTIP in order to align management compensation with Aptiv’s overall business strategy. In addition, the Company has competitive and market-appropriate ownership requirements for its directors and officers. All of the RSUs granted under the PLC LTIP are eligible to receive dividend equivalents for any dividend paid from the grant date through the vesting date. Dividend equivalents are generally paid out in ordinary shares upon vesting of the underlying RSUs.
Board of Director Awards
Aptiv has granted RSUs to the Board of Directors as detailed in the table below:
Grant DateRSUs grantedGrant Date Fair Value (1)Vesting DateShares Issued Upon VestingFair Value of Shares at IssuanceShares Withheld to Cover Withholding Taxes
(dollars in millions)
April 202223,387 $2 April 202320,457 $2 2,930 
April 202117,589 $3 April 202215,633 $2 1,956 
(1)Determined based on the closing price of the Company’s ordinary shares on the date of the grant.
In addition, in April 2023, Aptiv granted 20,584 RSUs to the Board of Directors at a grant date fair value of approximately $2 million. The grant date fair value was determined based on the closing price of the Company’s ordinary shares on the date of the grant. The RSUs will vest in April 2024.
Executive Awards
Aptiv has made annual grants of RSUs to its executives in February of each year beginning in 2012. These awards include a time-based vesting portion and a performance-based vesting portion, as well as continuity awards in certain years. The time-based RSUs, which make up 40% (25% prior to 2021) of the awards for Aptiv’s officers and 50% for Aptiv’s other executives, vest ratably over three years beginning on the first anniversary of the grant date. The performance-based RSUs, which make up 60% (75% prior to 2021) of the awards for Aptiv’s officers and 50% for Aptiv’s other executives, vest at the completion of a three-year performance period if certain targets are met. Each executive will receive between 0% and 200% (150% for the 2019 and 2020 grants based on the executive performance grant modification in 2020) of his or her target performance-based award based on the Company’s performance against established company-wide performance metrics, which are:
Metric2020 - 2023
Grants		2019
Grant
Average return on net assets (1)33%50%
Cumulative net income33%25%
Relative total shareholder return (2)33%25%
(1)Average return on net assets is measured by tax-affected operating income divided by average net working capital plus average net property, plant and equipment for each calendar year during the respective performance period.
(2)Relative total shareholder return is measured by comparing the average closing price per share of the Company’s ordinary shares for the specified trading days in the fourth quarter of the end of the performance period to the average closing price per share of the Company’s ordinary shares for the specified trading days in the fourth quarter of the year preceding the grant, including dividends, and assessed against a comparable measure of competitor and peer group companies.
The details of the executive grants were as follows:
Grant DateRSUs GrantedGrant Date Fair ValueTime-Based Award Vesting DatesPerformance-Based Award Vesting Date
(in millions)
February 20190.71 $62 Annually on anniversary of grant date, 2020 - 2022December 31, 2021
February 20200.75 $62 Annually on anniversary of grant date, 2021 - 2023December 31, 2022
February 20210.44 $72 Annually on anniversary of grant date, 2022 - 2024December 31, 2023
February 20220.59 $80 Annually on anniversary of grant date, 2023 - 2025December 31, 2024
February 20230.79 $99 Annually on anniversary of grant date, 2024 - 2026December 31, 2025
The grant date fair value of the RSUs is determined based on the target number of awards issued, the closing price of the Company’s ordinary shares on the date of the grant of the award, including an estimate for forfeitures, and a contemporaneous valuation performed by an independent valuation specialist with respect to the relative total shareholder return awards.
Any new executives hired after the annual executive RSU grant date may be eligible to participate in the PLC LTIP. The Company has also granted additional awards to employees in certain periods under the PLC LTIP. Any off cycle grants made for new hires or to other employees are valued at their grant date fair value based on the closing price of the Company’s ordinary shares on the date of any such grant.
The details of the shares issued upon vesting of the executive grants are as follows:
Time-Based AwardsPerformance-Based Awards
Vesting DateOrdinary Shares Issued Upon VestingFair Value of Shares at IssuanceOrdinary Shares Withheld to Cover Withholding TaxesOrdinary Shares Issued Upon VestingFair Value of Shares at IssuanceOrdinary Shares Withheld to Cover Withholding Taxes
(dollars in millions)
Q1 2023286,337 $33 116,753 315,664 $37 138,036 
Q1 2022354,600 $46 140,409 325,283 $42 136,143 
A summary of RSU activity, including award grants, vesting and forfeitures is provided below:
RSUsWeighted Average Grant Date Fair Value
 (in thousands)
Nonvested, January 1, 20231,247 $136.61 
Granted1,353 $121.65 
Vested(286)$118.55 
Forfeited(29)$115.21 
Nonvested, March 31, 20232,285 $130.28 
Aptiv recognized share-based compensation expense related to these awards of $18 million ($18 million, net of tax) and $5 million ($5 million, net of tax) based on the Company’s best estimate of ultimate performance against the respective targets during the three months ended March 31, 2023 and 2022, respectively. Aptiv will continue to recognize compensation expense, based on the grant date fair value of the awards applied to the Company’s best estimate of ultimate performance against the respective targets, over the requisite vesting periods of the awards. Based on the grant date fair value of these awards and the Company’s best estimate of ultimate performance against the respective targets as of March 31, 2023, unrecognized compensation expense on a pre-tax basis of approximately $249 million is anticipated to be recognized over a weighted average period of approximately two years. For the three months ended March 31, 2023 and 2022, approximately $30 million and $36 million, respectively, of cash was paid and reflected as a financing activity in the statements of cash flows related to the tax withholding for vested RSUs.
Subsidiary Awards
During the first quarter of 2023, certain employees of Wind River were granted stock options in Wind River, which is now a subsidiary of the Company (the “Subsidiary Awards”). These Subsidiary Awards will vest ratably over a three year period subject to continuing employment. Refer to Note 17. Acquisitions and Divestitures for further information on the Wind River acquisition.
In the first quarter of 2023, approximately 7 million Subsidiary Awards were granted at a grant date fair value of $3.69 per Subsidiary Award, all of which were outstanding and unvested as of March 31, 2023.
The following summarizes the weighted average inputs used in the Black-Scholes model to value the Subsidiary Awards granted during the three months ended March 31, 2023:
Expected volatility43.47 %
Expected term3.5 years
Expected dividends$— 
Risk-free interest rate4.38 %
Aptiv recognized share-based compensation expense related to these Subsidiary Awards of $1 million during the three months ended March 31, 2023. Aptiv will continue to recognize compensation expense based on the grant date fair value of the Subsidiary Awards over the requisite service period. As of March 31, 2023, unrecognized compensation expense on a pre-tax basis related to unvested Subsidiary Awards of approximately $26 million is anticipated to be recognized over a period of approximately three years.