We issue RSUs, Options, and Performance RSUs to certain employees and directors. We recognized share-based compensation expense of $46 million, $48 million and $15 million during the years ended December 31, 2022, 2021 and 2020, respectively. The total tax benefit recognized related to this compensation was $6 million, $4 million and $4 million for the years ended December 31, 2022, 2021 and 2020, respectively. In addition, we withheld common stock shares associated with net share settlements to cover tax withholding obligations upon the vesting of awards under our employee equity incentive program. For the years ended December 31, 2022, 2021 and 2020, we withheld approximately 147,000, 131,000 and 152,000 shares at a total cost of $8 million, $6 million and $4 million, respectively, through net share settlements. Shares withheld to cover tax withholding obligations are retired.

As of December 31, 2022, unrecognized compensation cost for unvested awards was approximately $36 million, which is expected to be recognized over a weighted average period of 1.7 years. As of December 31, 2022, there were 2,659,206 shares of common stock available for future issuance under this plan.

RSUs vest in annual installments over three years from the date of grant, subject to the individual’s continued employment through the applicable vesting date. Vested RSUs generally will be settled for common stock. The grant date fair value is equal to closing stock price on the date of grant. The following table provides information about our RSU grants for the last three fiscal years:


	Year Ended December 31,
	2022		2021		2020
Number of shares granted	800,378		588,930		672,123
Weighted average grant date fair value per share	$	44.12	$	38.50	$	25.14
Fair value of shares vested (in millions)	$	25	$	19	$	10


	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding, beginning of period	1,029,638	33.55
Granted	800,378	44.12
Vested	(486,326)	32.82
Forfeited	(43,106)	40.86
Outstanding, end of period	1,300,584	40.09

Options vest over three years in annual installments from the date of grant, subject to the individual’s continued employment through the applicable vesting date and will terminate 10 years from the date of grant or earlier on the unvested portion of an individual whose service was terminated. The exercise price is equal to the closing price of the common stock on the date of grant. The following table provides information about our option grants for the last three fiscal years:


	Year Ended December 31,
	2022		2021		2020
Number of options granted	389,536		542,793		566,401
Weighted average exercise price per share	$	44.09	$	38.22	$	25.80
Weighted average grant date fair value per share	$	20.08	$	18.41	$	9.14


	Year Ended December 31,
	2022		2021		2020
Expected volatility(1)	45.8	%	50.5	%	35.4	%
Dividend yield(2)	—	%	—	%	—	%
Risk-free rate(3)	1.7	%	1.1	%	1.0	%
Expected term (in years)(4)	6.0		6.0		6.0

(1)During the year ended December 31, 2020, due to limited trading history for our common stock, we did not have sufficient information available on which to base a reasonable and supportable estimate of the expected volatility of its share price. As a result, we used an average historical volatility of our peer group over a time period consistent with its expected term assumption. Our peer group was determined based upon companies in our industry with similar business models and is consistent with those used to benchmark our executive compensation.


	Number of Shares	Weighted Average Exercise Price Per Share
Outstanding, beginning of period	2,086,724	$	32.39
Granted	389,536	44.09
Exercised	(58,345)	28.76
Forfeited, canceled or expired	(5,683)	38.96
Outstanding, end of period	2,412,232	34.35
Exercisable, end of period	1,510,974	31.87

As of December 31, 2022, we had 1,510,974 options outstanding that were exercisable with an aggregate intrinsic value of $12 million and weighted average remaining contractual term of approximately 7 years. The intrinsic value of all options exercised during the year was $0.9 million.

In March 2022, we issued 93,064 Performance RSUs with a grant date fair value of $44.09. The Performance RSUs are settled at the end of a two-year performance period, with 50% of the Performance RSUs subject to achievement

based on the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization further adjusted for net deferral and recognition of revenues and related direct expenses related to sales of VOIs of projects under construction. The remaining 50% of the Performance RSUs are subject to the achievement of certain contract sales targets.

In March 2021, we issued 124,711 Performance RSUs with a grant date fair value of $38.22. The Performance RSUs are settled at the end of a two-year performance period, with 50% of the Performance RSUs subject to achievement based on the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization further adjusted for net deferral and recognition of revenues and related direct expenses related to sales of VOIs of projects under construction. The remaining 50% of the Performance RSUs issued are subject to the achievement of certain contract sales targets.

In August 2021, and in conjunction with the Diamond Acquisition, we issued 351,118 Performance RSUs with a grant date fair value of $40.27. The Performance RSUs are settled at the end of the performance period which is from the Acquisition Date through December 31, 2023, with 67% of the Performance RSUs subject to achievement based on certain run rate cost savings. The remaining 33% of the Performance RSUs issued are subject to the achievement of the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization further adjusted for net deferral and recognition of revenues and related direct expenses related to sales of VOIs of projects under construction.

During the year ended December 31, 2020, we issued 168,529 Performance RSUs with a grant date fair value of $25.69. The Performance RSUs are settled at the end of a three-year performance period, with 70% of the Performance RSUs subject to achievement based on the Company’s adjusted earnings before interest expense, taxes and depreciation and amortization further adjusted for net deferral and recognition of revenues and related direct expenses related to sales of VOIs of projects under construction. The remaining 30% of the Performance RSUs are subject to the achievement of certain contract sales targets.

During the fourth quarter of 2021, the Compensation Committee approved the modification of the performance conditions for the Performance RSUs issued in 2020 and March 2021, to reflect the results of HGV's and Diamond's operations subsequent to the Acquisition Date. We estimated that the performance conditions for the 2020 Performance RSU awards remain improbable of achievement under the modified performance conditions. As such, the Company did not accrue expenses related to the Performance RSUs granted in 2020. In regards to the Performance RSUs granted in March 2021, we determined that under the modified performance conditions, the awards issued were probable of achievement. During 2021, we did not incur incremental compensation expense resulting from the modification which was applied to the Performance RSUs of 28 grantees.

For all other performance-based awards, compensation expense will be recorded through the end of the performance period if it is deemed probable that the performance goals will be met. If the performance goals are not met, no compensation cost will be recognized and any previously recognized compensation cost will be reversed.

The following table provides information about our Performance RSU grants, which is based on our Adjusted EBITDA metric described in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K, further adjusted by net deferral and recognition of revenues and related direct expenses related to sales of VOIs of projects under construction for the last three fiscal years:


	Year Ended December 31,
	2022		2021		2020
Number of shares granted	46,532		178,224		117,975
Weighted average grant date fair value per share	$	44.09	$	39.55	$	25.69
Fair value of shares vested (in millions)	—		—		2


	Year Ended December 31,
	2022		2021		2020
Number of shares granted	46,532		62,356		50,554
Weighted average grant date fair value per share	$	44.09	$	38.22	$	25.69
Fair value of shares vested (in millions)	—		—		1

During fiscal 2021, 235,249 Performance RSU grants, which are based on achieving certain run rate cost savings initiatives, were granted with a weighted average grant date fair value per share of $40.27. There were no Performance RSU grants based on achieving certain run rate cost savings initiatives for the 2022 and 2020 fiscal years, respectively.


	Adjusted EBITDA(1)			Contract Sales			Run Rate Cost Savings
	Number of Shares	Weighted Average Grant Date Fair Value per Share		Number of Shares	Weighted Average Grant Date Fair Value per Share		Number of Shares	Weighted Average Grant Date Fair Value per Share
Outstanding, beginning of period	374,243	$	34.07	146,352	$	32.98	235,249	$	40.27
Granted	46,532	44.09		46,532	44.09		—	—
Vested	—	—		—	—		—	—
Forfeited, canceled or expired	(85,542)	33.32		(36,656)	33.32		—	—
Outstanding, end of period	335,233	35.12		156,228	36.20		235,249	40.27

In March 2017, the Board of Directors adopted the Hilton Grand Vacations Inc. Employee Stock Purchase Plan (the “ESPP”), which became effective during 2017. In connection with the Plan, we reserved 2.5 million shares of common stock which may be purchased under the ESPP. Under the ESPP, eligible employees can purchase common stock twice per year at the end of a six-month payment period (a "Purchase Period"). 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 last day of the Purchase Period, up to a maximum threshold established by the plan administrator for the offering period. For the year ended December 31, 2022 and 2021, we issued 121,095 and 39,985 shares, respectively, and recognized less than $1 million of compensation expense in both periods related to this plan.

In November 2022, the Board of Directors amended the ESPP plan to allow eligible employees to purchase shares of our common stock at a price per share not less than 85% of the fair market value per share of common stock on the first day of the Purchase Period or the last day of the Purchase Period, whichever is lower, up to a maximum threshold established by the plan administrator for the offering period. The amendment will become effective in 2023.