Stock-Based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company’s Amended and Restated Equity and Incentive Plan provides for the grant of options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and other stock- or cash-based awards to employees, directors and other individuals who perform services for the Company and its subsidiaries. The maximum number of shares reserved for grant of awards under the plan is 22.5 million, with approximately 4.5 million shares available as of December 31, 2020. The Company typically settles stock-based awards with treasury shares.

Time-based awards generally vest ratably over a three-year period following the date of grant, and performance- or market-based awards generally vest three years following the date of grant based on the attainment of performance- or market-based goals, all of which are subject to a service condition.

Stock Unit Awards

Stock unit awards entitle the holder to receive shares of common stock upon vesting on a one-to-one basis. Certain performance-based RSUs vest based upon the level of performance attained, but vesting can increase (typically by up to 20%) if certain relative total shareholder return goals are achieved. Market-based RSUs generally vest based on the level of total shareholder return or absolute stock price attainment.

In June 2020, the Company granted market-based RSUs that vest based on absolute stock price attainment. The grant date fair value of this award is estimated using a Monte Carlo simulation model. The weighted average assumptions used in the model are outlined in the table below. During the years ended December 31, 2019 and 2018 the Company did not issue any stock unit awards containing a market condition.

	2020
Expected volatility of stock price	91%
Risk-free interest rate	0.18%
Valuation period	3 years
Dividend yield	—%

Annual activity related to stock units consisted of (in thousands of shares):

			Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)
Time-based RSUs
	Outstanding at January 1, 2020		847	$	36.99
		Granted (a)	798	23.14
		Vested (b)	(435)	37.13
		Forfeited	(140)	30.36
	Outstanding and expected to vest at December 31, 2020 (c)		1,070	$	27.47	0.9	$	40
Performance-based and market-based RSUs
	Outstanding at January 1, 2020		1,061	$	38.89
		Granted (a)	552	21.06
		Vested (b)	(73)	36.64
		Forfeited	(552)	32.97
	Outstanding at December 31, 2020		988	$	32.41	1.4	$	37
	Outstanding and expected to vest at December 31, 2020 (c)		38	$	20.70	2.5	$	1

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(a)Reflects the maximum number of stock units assuming achievement of all performance-, market- and time-vesting criteria and does not include those for non-employee directors, which are discussed separately below. The weighted-average fair value of time-based RSUs and performance-based RSUs granted in 2019 was $34.14 and $34.56, respectively, and the weighted-average fair value of time-based RSUs and performance-based RSUs granted in 2018 was $48.41 and $48.52, respectively.

(b)The total fair value of RSUs vested during 2020, 2019 and 2018 was $19 million, $18 million and $20 million, respectively.

(c)Aggregate unrecognized compensation expense related to time-based RSUs and performance-based and market-based RSUs amounted to $17 million and will be recognized over a weighted average vesting period of 1.0 years.

Stock Options

There were no stock options outstanding as of December 31, 2020. Stock options exercised during 2019 and 2018 had intrinsic values of $1 million and $8 million, respectively.

Non-employee Directors Deferred Compensation Plan

Prior to 2019, the Company granted stock awards on a quarterly basis to non-employee directors representing between 50% and 100% of a director’s annual compensation and such awards could be deferred under the Non-employee Directors Deferred Compensation Plan. Beginning in 2019, the Company

grants stock awards on an annual basis to non-employee directors representing between 50% and 100% of a director’s annual compensation and such awards can be deferred under the Non-employee Directors Deferred Compensation Plan. During 2020, 2019 and 2018, the Company granted 34,000, 40,000 and 34,000 awards, respectively, to non-employee directors.

Stock-Compensation Expense

During 2020, 2019 and 2018, the Company recorded stock-based compensation expense of $9 million ($7 million, net of tax), $22 million ($17 million, net of tax) and $24 million ($18 million, net of tax), respectively.