SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

We maintain the MVW Equity Plan for the benefit of our officers, directors and employees. Under the MVW Equity Plan, we are authorized to award: (1) RSUs of our common stock, (2) SARs relating to our common stock, and (3) stock options to purchase our common stock. A total of 1.8 million shares are authorized for issuance pursuant to grants under the MVW Equity Plan. As of December 31, 2021, approximately 1.4 million shares were available for grants under the MVW Equity Plan.

The following table details our share-based compensation expense related to award grants to our officers, directors, and employees:


($ in millions)	2021		2020		2019
Service-based RSUs	$	34	$	22	$	17
Performance-based RSUs	9		9		7
ILG Acquisition Converted RSUs	—		2		10
	43		33		34
SARs	8		4		3

	$	51	$	37	$	37

The following table details our deferred compensation costs related to unvested awards:


($ in millions)	At Year-End 2021(1)		At Year-End 2020
Service-based RSUs	$	33	$	27
Performance-based RSUs	—		6

	33		33
SARs	2		1
	$	35	$	34

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(1)As of December 31, 2021, the weighted average remaining term for RSU grants outstanding at year-end 2021 was one to two years and we expect that deferred compensation expense will be recognized over a weighted average period of one to three years.

Restricted Stock Units

We have issued RSUs that vest over time, which we refer to as service-based RSUs, and RSUs that vest based on performance with respect to established criteria, which we refer to as performance-based RSUs.

The following table shows the changes in our outstanding RSUs and the associated weighted average grant-date fair values:


	2021
	Service-based			Performance-based			Total
	Number of RSUs	Weighted Average Grant-Date Fair Value Per RSU		Number of RSUs	Weighted Average Grant-Date Fair Value Per RSU		Number of RSUs	Weighted Average Grant-Date Fair Value Per RSU
Outstanding at year-end 2020	783,489	$	88.98	550,171	$	99.56	1,333,660	$	93.34
Granted	260,077	$	161.42	—	$	—	260,077	$	161.42
Distributed	(264,735)	$	97.57	(35,135)	$	138.68	(299,870)	$	102.39
Forfeited	(13,751)	$	115.94	(39,915)	$	133.95	(53,666)	$	129.33
Outstanding at year-end 2021	765,080	$	110.14	475,121	$	93.77	1,240,201	$	103.87

The weighted average grant-date fair value per RSU granted in 2020 and 2019 was $95.92 and $95.66, respectively. The fair value of the RSUs which vested in 2021, 2020, and 2019 was $46 million, $30 million, and $34 million, respectively, and included $3 million, $6 million, and $15 million, respectively, related to RSUs converted from ILG equity-based RSUs to MVW equity-based RSUs in the ILG Acquisition.

Stock Appreciation Rights

The following table shows the changes in our outstanding SARs and the associated weighted average exercise prices:


	2021
	Number of SARs	Weighted Average Exercise Price Per SAR
Outstanding at year-end 2020	622,102	$	84.58
Granted	127,857	$	173.88
Exercised	(122,031)	$	57.78
Forfeited or expired	(1,053)	$	173.88
Outstanding at year-end 2021(1)(2)	626,875	$	107.86

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(1)As of December 31, 2021, outstanding SARs had a total intrinsic value of $39 million and a weighted average remaining term of 6 years.

(2)As of December 31, 2021, 356,698 SARs with a weighted average exercise price of $86.61, an aggregate intrinsic value of $29 million and a weighted average remaining contractual term of 5 years were exercisable.

The weighted average grant-date fair value per SAR granted in 2021, 2020, and 2019 was $70.66, $29.63, and $28.89, respectively. The intrinsic value of SARs which vested in 2021, 2020, and 2019, was $5 million, $4 million, and $4 million, respectively. The aggregate intrinsic value of SARs which were exercised in 2021, 2020, and 2019 was $14 million, $19 million, and $11 million, respectively.

We use the Black-Scholes model to estimate the fair value of the SARs granted. The expected stock price volatility was calculated based on the average of the historical and implied volatility of our stock price. The average expected life was calculated using the simplified method, as we have insufficient historical information to provide a basis for estimating average expected life. The risk-free interest rate was calculated based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. The dividend yield assumption listed below is based on the expectation of future payouts.

The following table outlines the assumptions used to estimate the fair value of grants in 2021, 2020, and 2019:


	2021	2020	2019
Expected volatility	48.35%	38.81%	31.10%
Dividend yield	1.48%	2.13%	1.76%
Risk-free rate	0.97%	0.96%	2.59%
Expected term (in years)	6.25	6.25	6.25

Employee Stock Purchase Plan

During 2015, the Board of Directors adopted, and our shareholders subsequently approved, the Marriott Vacations Worldwide Corporation Employee Stock Purchase Plan (the “ESPP”), which became effective during 2015. A total of 500,000 shares of common stock may be purchased under the ESPP. The ESPP allows eligible employees to purchase shares of our common stock at a price per share not less than 95% of the fair market value per share of common stock on the purchase date, up to a maximum threshold established by the plan administrator for the offering period.