XML 101 R55.htm IDEA: XBRL DOCUMENT v3.22.0.1
SHARE-BASED COMPENSATION PLANS (Tables)
 12 Months Ended
Dec. 31, 2021
SHARE-BASED COMPENSATION PLANS  
Schedule of share-based compensation expense recognized in Consolidated Statements of Income

Years Ended December 31,

 

 

 

 

 

 

 

(in millions)

 

 

2021

 

2020

 

2019

Share-based compensation expense - pre-tax(a)

 

$

278

$

274

$

314

Share-based compensation expense - after tax(b)

 

 

220

 

216

 

248

(a)As a result of accelerated vesting events, such as retirement eligibility in the year of grant and involuntary terminations, we recognized $67 million, $63 million and $82 million in 2021, 2020 and 2019, respectively, prior to the end of the specified vesting periods. It is our policy to reverse compensation expense for forfeited awards when they occur.(b)We also recognized $16 million of additional tax expense due to share settlements occurring in 2021.
Schedule of assumptions used to estimate the fair value of PSUs based on AIG's TSR

 

 

 

 

 

2021

 

Expected dividend yield(a)

 

 

 

 

-

%

Expected volatility(b)

 

 

 

 

47.63

%

Risk-free interest rate(c)

 

 

 

 

0.28

%

(a) The award agreement provides that TSR for AIG and each member of the Peer Group will be calculated assuming dividends distributed are reinvested on the ex-dividend date.

(b)We used the historical volatility over the most recent 2.81-year period for AIG and the members of the Peer Group, commensurate with the remaining Performance Period as of the Valuation Date.

(c)We converted the semi-annual zero-coupon U.S. Treasury rates as of the Valuation Date to continuously compounded rates. We then chose the continuously compounded risk-free rate that is commensurate with the length of the remaining performance period as of the valuation date and interpolated between the yields of the two-year and the three-year continuously compounded rates to determine the yield.
Summary of outstanding share-settled LTI awards

 

 

 

 

 

Weighted Average

As of or for the Year

Number of Units

 

Grant-Date Fair Value

Ended December 31, 2021(b)

2021 LTI

2020 LTI

2019 LTI

 

2021 LTI

2020 LTI

2019 LTI

Unvested, beginning of year

-

5,348,656

3,497,419

 

$

-

$

31.33

$

44.79

Granted

5,948,029

-

-

 

 

44.96

 

-

 

-

Vested(c)

(1,344,917)

(771,594)

(3,174,495)

 

 

44.90

 

30.57

 

44.76

Forfeited

(214,678)

(410,568)

(322,924)

 

 

44.60

 

31.79

 

44.85

Unvested, end of year(d)

4,388,434

4,166,494

-

 

$

45.00

$

31.43

$

-

(a) Excludes stock options, other RSUs and DSUs, which are discussed under Stock Options, Other RSU Grants and Non-Employee Plan, respectively.

(b) PSUs represent target amount granted and does not reflect potential increases or decreases that could result from the final outcome of the performance goals for the respective awards, which is determined by the CMRC in the quarter after the applicable performance period ends.

(c) Also reflects units that vest as a result of an accelerated vesting event that occurred prior to the specified vesting date.

(d) At December 31, 2021, the total unrecognized compensation cost for outstanding RSUs and PSUs was $185 million and the weighted-average and expected period of years over which that cost is expected to be recognized are 0.95 year and 2 years.
Schedule of weighted-average assumptions The following weighted-average assumptions were used for stock options granted:

 

2021

 

2020

 

2019

 

Expected annual dividend yield(a)

2.89

%

3.97

%

2.86

%

Expected volatility(b)

36.68

%

42.03

%

23.17

%

Risk-free interest rate(c)

0.95

%

0.57

%

2.47

%

Expected term(d)

6.43

years

6.39

years

6.38

years

(a)The dividend yield is the projected annualized AIG dividend yield estimated by Bloomberg Professional service as of the valuation date.

(b) The expected volatility is based on the implied volatility of 24 months stock option estimated by the Bloomberg Professional service as of the valuation date.

(c) The risk-free interest rate is the continuously compounded interest rate for the term between the valuation date and the expiration date that is assumed to be constant and equal to the interpolated value between the closest data points on the U.S. dollar LIBOR-swap curve as of the valuation date.

(d) The contractual terms are 7 and 10 years from the date of grant.
Schedule of stock option activity The following table provides a rollforward of stock option activity:

 

 

 

 

 

Weighted Average

 

 

Aggregate

As of or for the Year

 

 

 

Weighted Average

 

Remaining

 

 

Intrinsic Values

Ended December 31, 2021

Units

 

 

Exercise Price

Contractual Life

 

(in millions)

Outstanding, beginning of year

11,429,491

 

$

47.67

 

7.59

 

 

 

Granted

2,674,353

 

 

44.23

 

 

 

 

 

Exercised

(674,216)

 

 

46.16

 

 

 

 

 

Forfeited or expired

(408,201)

 

 

45.13

 

 

 

 

 

Outstanding, end of year

13,021,427

 

$

47.12

 

7.32

 

$

142

Exercisable, end of year

4,047,524

 

$

52.88

 

6.27

 

$

21
Summary of outstanding share-settled RSU grants

 

 

 

 

 

Weighted Average

As of or for the Year

Number of Units

 

Grant-Date Fair Value

Ended December 31,

2021

2020

2019

 

 

2021

 

2020

 

2019

Unvested, beginning of year

1,151,380

1,231,185

1,634,610

 

$

46.18

$

54.17

$

56.11

Granted

493,140

583,068

399,779

 

 

49.36

 

35.54

 

52.40

Vested

(699,067)

(535,220)

(774,350)

 

 

50.03

 

50.89

 

57.32

Forfeited

(125,813)

(127,653)

(28,854)

 

 

51.80

 

54.90

 

55.23

Unvested, end of year

819,640

1,151,380

1,231,185

 

$

43.95

$

46.18

$

54.17