Stock Compensation Plans

12 Months Ended

Aug. 31, 2016

Stock Compensation Plans [Abstract]

Stock Compensation Plans

14. Stock Compensation Plans

The Walgreens Boots Alliance, Inc. Omnibus Incentive Plan (the “Omnibus Plan”) which became effective in fiscal 2013, provides for incentive compensation to the Company’s non-employee directors, officers and employees, and consolidates into a single plan several previously existing equity compensation plans.

The Company grants stock options, performance shares and restricted units under the Omnibus Plan. Performance shares issued under the Omnibus Plan offer performance-based incentive awards and equity-based awards to key employees. The fair value of each performance share granted assumes that performance goals will be achieved at 100 percent. If such goals are not met, no compensation expense is recognized and any recognized compensation expense is reversed. Restricted stock units are also equity-based awards with performance requirements that are granted to key employees. The performance shares and restricted stock unit awards are both subject to restrictions as to continuous employment except in the case of death, normal retirement or total and permanent disability.

Total stock-based compensation expense for fiscal 2016, 2015 and 2014 was $115 million, $109 million and $114 million, respectively. The recognized tax benefit was $21 million, $7 million and $31 million for fiscal 2016, 2015 and 2014, respectively. Unrecognized compensation cost related to non-vested awards at August 31, 2016, was $111 million. This cost is expected to be recognized over a weighted average of three years.