Stock-based and Other Incentive Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based and Other Incentive Compensation

Stock-based and Other Incentive Compensation

Cash-settled Stock Appreciation Rights (“CSARs”)

CSAR activity during the three months ended March 31, 2024, was as follows:

	Number of CSAR Awards	Weighted Average Grant Price		Weighted Average Remaining Term	Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2023	3,452,120	$	18.77	1.72 years	$	37
Outstanding as of March 31, 2024	3,452,120	$	18.77	1.47 years	$	36
Exercisable as of March 31, 2024	2,423,412	$	14.39	0.59 years	$	36

As of March 31, 2024, there was $2 million of compensation expense that has yet to be recognized related to non-vested CSAR awards. This expense is expected to be recognized over the remaining weighted-average vesting period of 21 months.

The following table summarizes the assumptions used in the Black-Scholes-Merton model, which the Company uses to estimate the fair value of the CSARs:

	March 31, 2024	December 31, 2023
Expected dividend yield	1.73%	1.70%
Risk-free interest rate	4.51% - 5.49%	3.99% - 5.60%
Weighted average volatility	21.76%	22.24%
Expected life (in years)	0.00 - 3.00	0.06 - 3.25
Weighted average grant date fair value per share of rights granted	$4.71	$4.83

Compensation expense (benefit) related to CSAR awards was as follows:

	Three Months Ended March 31,
(in millions)	2024		2023
Selling, general and administrative expenses	(1)		10
Income tax expense (benefit)	—		(2)
CSAR compensation (benefit) expense, net	$	(1)	$	8

The Company had a short-term liability of $36 million and $37 million recorded within accrued compensation and benefits in the Condensed Consolidated Balance Sheets at March 31, 2024 and December 31, 2023, respectively. The Company had a long-term liability of $2 million and $2 million recorded within other liabilities in the Condensed Consolidated Balance Sheets at March 31, 2024 and December 31, 2023, respectively.

Performance Cash Awards

Compensation expense related to Performance Cash Awards was as follows:

	Three Months Ended March 31,
(in millions)	2024		2023
Cost of revenue	$	1	$	1
Selling, general and administrative expenses	3		3
Performance Cash compensation expense	4		4
Income tax benefit	(1)		(1)
Performance Cash compensation expense, net	$	3	$	3

The Company had a short-term liability of $1 million and $16 million recorded within accrued compensation and benefits in the Condensed Consolidated Balance Sheets at March 31, 2024 and December 31, 2023, respectively. The Company had a long-term liability of $17 million and $13 million recorded within other liabilities in the Condensed Consolidated Balance Sheets at March 31, 2024 and December 31, 2023 respectively.