Stock-Based Compensation

3 Months Ended

Mar. 31, 2022

Stock-Based Compensation

Stock-Based Compensation

17. Stock-Based Compensation:

Stock-based compensation cost 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.

(Dollars in millions)
For the three months ended March 31:	2022		2021
Cost	$	40	$	34
Selling, general and administrative		136		115
Research, development and engineering		57		49
Pre-tax stock-based compensation cost	$	234	$	198
Income tax benefits		(57)		(48)
Total net stock-based compensation cost	$	177	$	149

Pre-tax stock-based compensation cost for the three months ended March 31, 2022 increased $36 million compared to the corresponding period in the prior year, including increases in stock options ($5 million), performance share units ($3 million) and restricted stock units ($28 million). The increases primarily relate to a change in the timing of the company’s executive grant cycle in 2022.

Total unrecognized compensation cost related to non-vested awards at March 31, 2022 was $1.5 billion and is expected to be recognized over a weighted-average period of approximately 2.6 years.

Capitalized stock-based compensation cost was not material at March 31, 2022 and 2021.

Effective April 1, 2022, the company increased the discount for eligible participants under its Employees Stock Purchase Plan (ESPP) from 5 percent to 15 percent off the average market price on the date of purchase. With this change, the ESPP is considered compensatory under the accounting requirements for stock-based compensation.