Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation:

Stock-based compensation cost for stock awards and stock options is measured at grant date, based on the fair value of the award, and is recognized over the employee requisite service period. The following table presents total stock-based compensation cost included in income from continuing operations.


	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2023		2022		2023		2022
Cost	$	47	$	43	$	93	$	84
Selling, general and administrative	168		153		317		289
Research, development and engineering	73		58		146		115
Pre-tax stock-based compensation cost	$	288	$	254	$	556	$	488
Income tax benefits	(75)		(82)		(142)		(139)
Total net stock-based compensation cost	$	213	$	172	$	414	$	348

Pre-tax stock-based compensation cost for the three months ended June 30, 2023 increased $34 million compared to the corresponding period in the prior year, including increases in restricted stock units ($15 million), performance share units ($11 million) and stock options ($7 million). The increases are driven by stock-based compensation awards granted by the company as part of its annual cycles for executives and other employees.

Pre-tax stock-based compensation cost for the six months ended June 30, 2023 increased $69 million compared to the corresponding period in the prior year, including increases in stock options ($21 million), Employees Stock Purchase Plan (ESPP) ($20 million), restricted stock units ($17 million) and performance share units ($11 million). The increases are driven by stock-based compensation awards granted by the company as part of its annual cycles for executives and other employees and the ESPP being considered compensatory effective April 1, 2022.

Total unrecognized compensation cost related to non-vested awards at June 30, 2023 was $1.6 billion and is expected to be recognized over a weighted-average period of approximately 2.5 years.