Share-based Incentive Compensation Plans

ING U.S., Inc. 2013 Omnibus Employee Incentive Plan and Voya Financial, Inc. 2014 Omnibus Employee Incentive Plan

The Company has provided equity-based compensation awards to its employees under the ING U.S., Inc. 2013 Omnibus Employee Incentive Plan (the "2013 Omnibus Plan") and the Voya Financial, Inc. 2014 Omnibus Employee Incentive Plan (the "2014 Omnibus Plan"). At inception of the 2013 Omnibus Plan, a total of 7,650,000 shares of Company common stock were reserved and available for issuance under the plan. As of December 31, 2017, common stock reserved and available for issuance under the 2013 Omnibus Plan was 344,885 shares. The 2013 Omnibus Plan is no longer actively used for new grants of equity-based compensation awards.

The 2014 Omnibus Plan was adopted by the Company's Board of Directors and approved by shareholders in 2014, and has substantially the same terms as the 2013 Omnibus Plan, except for certain changes intended to allow certain performance-based compensation awards to comply with the criteria for tax deductibility set forth in Section 162(m) of the Internal Revenue Code. The 2014 Omnibus Plan provides for 17,800,000 shares of common stock to be available for issuance as equity-based compensation awards. As of December 31, 2017, common stock reserved and available for issuance under the 2014 Omnibus Plan was 7,862,649 shares.

The 2013 Omnibus Plan and the 2014 Omnibus Plan (together, the "Omnibus Plans") each permit the granting of a wide range of equity-based awards, including RSUs, which represent the right to receive a number of shares of Company common stock upon vesting; restricted stock, which are shares of Company stock that are issued subject to sale and transfer restrictions until the vesting conditions are met; PSUs, which are RSUs subject to certain performance-based vesting conditions, and under which the number of shares of common stock delivered upon vesting varies with the level of achievement of performance criteria; and stock options. Grants of equity-based awards under the Omnibus Plans are approved in advance by the Compensation and Benefits Committee (the "Committee") of the Board of Directors of the Company, and are subject to such terms and conditions as the Committee may determine, including in respect of vesting and forfeiture, subject to certain limitations provided in the Omnibus Plans. Equity-based awards under the Omnibus Plans may carry dividend equivalent rights, pursuant to which notional dividends accumulate on unvested equity awards and are paid, in cash, upon vesting. Except for stock option awards made during 2015, awards made under the Omnibus Plans, to date, have included dividend equivalent rights. Dividend equivalents are credited to the recipient and are paid only to the extent the applicable performance criteria and service conditions are met.

During each of the years ended December 31, 2017, 2016 and 2015 the Company awarded RSUs and PSUs to its employees under the Omnibus Plans. The PSU awards entitle recipients to receive, upon vesting, a number of shares of common stock that ranges from 0% to 150% of the number of PSUs awarded, depending on the level of achievement of the specified performance conditions. The establishment and the achievement of performance objectives are determined and approved by the Committee. Except under certain termination conditions, RSUs and PSUs generally vest no earlier than one year from the date of the award and no later than three years from the date of the award. In the case of retirement (eligibility for which is based on the employee's age and years of service as provided in the relevant award agreement), awards vest in full, but subject to the satisfaction of any applicable performance criteria.

In December 2015, the Company also awarded contingent stock options under the 2014 Omnibus Plan. These options are subject to vesting conditions based on the achievement of specified performance measures, and generally become exercisable one year following satisfaction of the relevant vesting condition. The options have a term of ten years from the grant date. During the year ended December 31, 2017, all outstanding options vested as the necessary performance conditions were satisfied. The vested options are generally subject to a one year holding period from the dates of vesting and have an exercise price of $37.60 per share

If an award under the Omnibus Plans is forfeited, expired, terminated or otherwise lapses, the shares of Company common stock underlying that award will again become available for issuance. Shares withheld by the Company to pay employee taxes, or which are withheld by or tendered to the Company to pay the exercise price of stock options (or are repurchased from an option holder by the Company with proceeds from the exercise of stock options) are not available for reissuance.

Voya Financial, Inc. 2013 Omnibus Non-Employee Director Incentive Plan

The Company offers equity-based awards to Voya Financial, Inc. non-employee directors under the Voya Financial, Inc. 2013 Omnibus Non-Employee Director Incentive Plan ("2013 Director Plan”), which the Company adopted in connection with the IPO. A total of 288,000 shares of Company common stock may be issued under the 2013 Director Plan. The material terms of the 2013 Director Plan are substantially consistent with the material terms of the 2013 Omnibus Plan described above.

During the years ended December 31, 2017, 2016, and 2015, the Company granted 27,261, 34,758 and 19,913 RSUs, respectively, to certain of its non-employee directors. The awards granted in 2017 vest in full on the first anniversary of the grant date, and the awards granted in 2016 and 2015 vest one-third on each of the first, second and third anniversary of the grant date, in each case provided that the grantee remains a director of the Company on the relevant vesting date; however, no shares are delivered in connection with the RSUs until such time as the director's service on the Board is terminated.

Compensation Cost

The fair value of stock options was estimated using the Black-Scholes option pricing model. The following is a summary of the assumptions used in this model for the stock options granted during 2015:



Expected volatility		28.6	%
Expected term (in years)		6.02
Strike price	$	37.60
Risk-free interest rate		2.1	%
Expected dividend yield		0.11	%
Weighted average estimated fair value	$	11.89

The vesting of the stock options was contingent on the satisfaction of performance conditions on or before December 31, 2018; the Company assumed for purposes of the award's fair value that such conditions would be met in full prior to such date. The Company utilized the Simplified Method for the Expected term calculations. At the time of grant, the Company did not have historical exercises on which to base its own estimate. Additionally, exercise data relating to employees of comparable companies was not easily obtainable. Furthermore, because the Company did not have historical stock prices for a period at least equal to the expected term, the Company estimated volatility using a weighted-average consisting 70% of historical peer group volatility and 30% of the historical volatility of the Company common stock. The contractual term for exercising the options is ten years.

The fair value of the TSR component of the PSU awards was estimated using a Monte Carlo simulation. The following is a summary of the significant assumptions used to calculate the fair value of the TSR component of the PSU awards granted during the periods indicated:



	2017		2016
Expected volatility of the Company's common stock	26.67	%	24.37	%
Average expected volatility of peer companies	27.43	%	25.63	%
Expected term (in years)	2.86		2.82
Risk-free interest rate	1.45	%	1.05	%
Expected dividend yield	—	%	—	%
Average correlation coefficient of peer companies	68	%	61	%

The following table summarizes share-based compensation expense, which includes expenses related to awards granted under the Omnibus Plans, Director Plan, Phantom Plan and ING Group share-based compensation plans for the periods indicated:



	Year Ended December 31,
	2017		2016		2015
RSUs	$	57	$	62	$	54
PSU awards	44		32		37
Stock options	16		14		1
Other ⁽¹⁾	1		2		15
Total	118		110		107
Income tax benefit	39		38		37
Share-based compensation	$	79	$	72	$	70

⁽¹⁾ Includes compensation cost for legacy plans, under which no new awards are being issued.

Awards Outstanding

The following tables summarize the number of awards under the Omnibus Plans for the periods indicated:



	RSU Awards				PSU Awards
_{(awards in millions)}	Number of Awards		Weighted Average Grant Date Fair Value		Number of Awards⁽¹⁾			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2017	3.3		$	35.02	1.5			$	28.88
Adjusted for PSU performance factor	N/A		N/A		—		*	31.45
Granted	1.4		42.30		1.2			42.32
Vested	(1.6	)	34.86		(0.4	)		31.34
Forfeited	(0.1	)	36.86		(0.1	)		34.00
Outstanding at December 31, 2017	3.0		$	38.42	2.2			$	35.53

Awards expected to vest as of December 31, 2017	3.0		$	38.42	2.2			$	35.53

* Less than 0.1.

⁽¹⁾Based upon performance through December 31, 2017, recipients of performance awards would be entitled to between 125.0% and 131.0% of shares at the vesting date depending on the year of grant. The performance awards are included in the preceding table as if the participants earn shares equal to 100% of the units granted.



	Stock Options
_{(awards in millions)}	Number of Awards		Weighted Average Exercise Price
Outstanding as of January 1, 2017	3.3		$	37.60
Granted	—		—
Exercised	—		—
Forfeited	(0.3	)	37.60
Outstanding as of December 31, 2017	3.0		$	37.60
Vested, not exercisable, as of December 31, 2017	3.0		$	37.60
Vested, exercisable, as of December 31, 2017	—		—



	RSUs		PSU Awards		Stock Options
Unrecognized compensation cost	$	34	$	35	$	5
Expected remaining weighted-average period of expense recognition (in years)	1.5		1.8		0.5

The total grant date fair value of shares vested for the year ended December 31, 2017 was $54, $12 and $36 for RSUs, PSUs and stock options, respectively.