Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

The following table summarizes the Company’s stock option plan as at December 31, 2016:



	Options outstanding				Nonvested options
	Number of options		Weighted average exercise price		Number of options		Weighted average grant date fair value
Outstanding, January 1, 2016	2,407,973		$	113.01	984,979		$	41.88
New options granted	403,740		161.06		403,740		39.01
Exercised	(269,491	)	74.99		—		—
Vested	—		—		(449,712	)	33.70
Forfeited	(90,340	)	186.95		(88,840	)	42.42
Expired	(1,800	)	60.84		—		—
Outstanding, December 31, 2016	2,450,082		$	121.95	850,167		$	44.49
Vested or expected to vest at December 31, 2016⁽¹⁾	2,437,475		$	121.62	N/A		N/A
Exercisable, December 31, 2016	1,599,915		$	93.79	N/A		N/A

⁽¹⁾As at December 31, 2016, the weighted average remaining term of vested or expected to vest options was 6.9 years with an aggregate intrinsic value of $181 million.

Stock Options Outstanding and Exercisable

The table also provides the aggregate intrinsic value for in-the-money stock options, which represents the amount that would have been received by option holders had they exercised their options on December 31, 2016 at the Company’s closing stock price of $191.56.



	Options outstanding							Options exercisable
Range of exercise prices	Number of options	Weighted average years to expiration	Weighted average exercise price		Aggregate intrinsic value (millions)			Number of options	Weighted average exercise price		Aggregate intrinsic value (millions)
$36.29 – $72.54	304,025	2.3	$	60.59	$	40		304,025	$	60.59	$	40
$72.55 – $86.71	747,445	5.4	73.69		88			747,445	73.69		88
$86.72 – $161.38	678,416	7.0	127.62		44			347,061	111.34		28
$161.39 – $236.50	720,196	8.5	192.56		(1		)	201,384	188.23		—
Total⁽¹⁾	2,450,082	6.2	$	121.94	$	171		1,599,915	$	93.79	$	156

⁽¹⁾ As at December 31, 2016, the total number of in-the-money stock options outstanding was 2,140,692 with a weighted-average exercise price of $107.27. The weighted-average years to expiration of exercisable stock options is 5.1 years.

Weighted-Average Fair Value Assumptions

The weighted average fair value assumptions were approximately:



	2016			2015			2014
Expected option life (years)⁽¹⁾	5.25			5.25			5.98
Risk-free interest rate⁽²⁾	1.21		%	1.10		%	1.66		%
Expected stock price volatility⁽³⁾	27		%	26		%	29		%
Expected annual dividends per share⁽⁴⁾	$	1.40		$	1.40		$	1.40
Estimated forfeiture rate⁽⁵⁾	2.0		%	1.2		%	1.2		%
Weighted average grant date fair value of options granted during the year	$	39.01		$	55.28		$	48.88

⁽¹⁾ Represents the period of time that awards are expected to be outstanding. Historical data on exercise behaviour or, when available, specific expectations regarding future exercise behaviour were used to estimate the expected life of the option.

⁽²⁾ Based on the implied yield available on zero-coupon government issues with an equivalent remaining term at the time of the grant.

⁽³⁾ Based on the historical stock price volatility of the Company’s stock over a period commensurate with the expected term of the option.

⁽⁴⁾ Determined by the current annual dividend at the time of grant. The Company does not employ different dividend yields throughout the contractual term of the option. On April 20, 2016, the Company announced an increase in its quarterly dividend to $0.50 per share, representing $2.00 on an annual basis.

⁽⁵⁾ The Company estimated forfeitures based on past experience. The rate is monitored on a periodic basis.

The following table provides information related to all options exercised in the stock option plan during the years ended December 31:



(in millions of Canadian dollars)	2016		2015		2014
Total intrinsic value	$	30	$	72	$	115
Cash received by the Company upon exercise of options	21		43		62

Summary of Performance Share Units Plan

The following table summarizes information related to the Company’s PSUs as at December 31:



	2016		2015
Outstanding, January 1	348,276		460,783
Granted	147,157		137,958
Units, in lieu of dividends	4,010		3,570
Settled	(83,466	)	(217,179	)
Forfeited	(42,384	)	(36,856	)
Outstanding, December 31	373,593		348,276

Summary of Deferred Share Units Plan

The following table summarizes information related to the DSUs as at December 31:



	2016		2015
Outstanding, January 1	318,176		308,447
Granted	31,069		21,690
Units, in lieu of dividends	2,798		2,015
Settled	(87,996	)	(11,784	)
Forfeited	(30,011	)	(2,192	)
Outstanding, December 31	234,036		318,176

Summary of Total Share Based Liabilities Paid

The following table summarizes the total share based liabilities paid for each of the years ended December 31:



(in millions of Canadian dollars)	2016		2015		2014
Plan
DSUs	$	17	$	3	$	17
PSUs	31		79		—
Other	—		8		12
Total	$	48	$	90	$	29

- Definition

Tabular disclosure of an equity-based arrangement (such as stock or unit options and stock or unit awards) with an individual employee, which is generally an employment contract between the entity and a selected officer or key employee containing a promise by the employer to pay certain equity-based awards at future dates, sometimes including a period after retirement, upon compliance with stipulated requirements. This type of arrangement is distinguished from broader based employee benefit plans as it is usually tailored to the employee. Disclosure also typically includes the amount of related compensation expense recognized during the reporting period, the number of shares or units issued during the period under such arrangements, and the carrying amount as of the balance sheet date of the related liability.

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