Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

We recorded stock-based compensation expense of $1 million ($1 million, net of tax) and $7 million ($5 million, net of tax) during the three months ended September 30, 2024 and 2023, respectively. We recorded stock-based compensation expense of $14 million ($11 million, net of tax) and $23 million ($16 million, net of tax) during the nine months ended September 30, 2024 and 2023, respectively.

As part of our declaration and payment of a special cash dividend in December 2023, we granted additional restricted stock units (“RSUs”) to our award holders with unvested shares as a dividend equivalent, which has been deferred until, and will not be paid unless, the shares of stock underlying the award vest.

The activity related to RSUs 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, 2024	290	$	161.87
Granted (a)	134	111.39
Vested (b)	(120)	137.08
Forfeited	(23)	163.81
Outstanding and expected to vest at September 30, 2024 (c)	281	$	148.16	1.4	$	25
Performance-based RSUs
Outstanding at January 1, 2024	411	$	128.77
Granted (a)	150	112.44
Vested (b)	(222)	68.54
Forfeited	(25)	175.36
Outstanding at September 30, 2024	314	$	159.74	1.6	$	28
Outstanding and expected to vest at September 30, 2024 (c)	64	$	192.77	1.6	$	6

________

(a)Reflects the maximum number of stock units assuming achievement of all performance- and time-vesting criteria and does not include those for non-employee directors. The weighted-average fair value of time-based RSUs and performance-based RSUs granted during the nine months ended September 30, 2023 was $209.08 and $208.64, respectively.

(b)The total fair value of RSUs vested during the nine months ended September 30, 2024 and 2023 was $32 million and $21 million, respectively.

(c)Aggregate unrecognized compensation expense related to time-based and performance-based RSUs amounted to $28 million and will be recognized over a weighted average vesting period of 1.4 years.