SHARE-BASED AND OTHER COMPENSATION PROGRAMS

6 Months Ended

Jun. 30, 2012

Shared Based And Other Compensation Programs [Abstract]

SHARE BASED AND OTHER COMPENSATION PROGRAMS

8)       SHARE-BASED COMPENSATION PROGRAMS

AXA and AXA Financial sponsor various share-based compensation plans for eligible employees and financial professionals of AXA Financial and its subsidiaries, including the Company. AllianceBernstein also sponsors its own unit option plans for certain of its employees. Activity in these share-based plans in the discussions that follow relates to awards granted to eligible employees of AXA Equitable under each of these plans in the aggregate, except where otherwise noted.

For the second quarter and first six months of 2012 and 2011, respectively, the Company recognized compensation (credit) cost of $(5) million, $16 million, $56 million and $116 million for share-based payment arrangementsas further described herein.

On March 16, 2012, under the terms of the AXA Performance Unit Plan 2012, AXA awarded approximately 2.3 million unearned performance units to employees of AXA Equitable. The extent to which 2012-2013 cumulative performance targets measuring the performance of AXA and the insurance related businesses of AXA Financial Group are achieved will determine the number of performance units earned, which may vary in linear formula between 0% and 130% of the number of performance units at stake. The performance units earned during this performance period will vest and be settled on the third anniversary of the award date. The price used to value the performance units at settlement will be the average closing price of the AXA ordinary share for the last 20 trading days of the vesting period converted to U.S. dollars using the Euro to U.S. dollar exchange rate on March 15, 2015. In the second quarter and first six months of 2012, the expense (credit) associated with the March 16, 2012 grant of performance units was approximately $(512,237) and $5 million, respectively.

On March 16, 2012, approximately 900,790 options to purchase AXA ordinary shares were granted to AXA Equitable employees under the terms of the Stock Option Plan at an exercise price of 12.22euros. All of those options have a four-year graded vesting schedule, with one-third vesting on each of the second, third, and fourth anniversaries of the grant date. Approximately 370,426of the total options awarded on March 16, 2012 are further subject to conditional vesting terms that require the AXA ordinary share price to outperform the Euro Stoxx Insurance Index over a specified period. All of the options granted on March 16, 2012 have a ten-year term. The weighted average grant date fair value per option award was estimated at $2.48 using a Black-Scholes options pricing model with modification to measure the value of the conditional vesting feature. Key assumptions used in the valuation included expected volatility of 39.89%, a weighted average expected term of 5.6years, anexpected dividend yield of 7.54% and a risk-free interest rate of 1.8%. The total fair value of these options (net of expected forfeitures) of approximately $2 million is charged to expense over the shorter of the vesting term or the period up to the date at which the participant becomes retirement eligible. In second quarter and first six months of 2012, the expense associated with the March 16, 2012 grant of options was approximately $116,789 and $495,982, respectively.

On April 12, 2012, cash distributions of approximately $9 million were made to AXA Equitable active and former employees in settlement of 539,406 performance units, representing 50 percent of the number of performance units earned under the terms of the AXA Performance Unit Plan 2010. The remaining earned performance units vest with continued service to March 19, 2013, the third anniversary of the date of grant, with limited exception for retirement, death, or disability, and will be valued using the average closing price of the AXA ordinary share for the last 20 trading days of the vesting period converted to U.S. dollars at the Euro to U.S. dollar exchange rate on March 18, 2013. Participants may elect to receive AXA ordinary shares in lieu of cash for all or a portion of that settlement.

On March 16, 2012, under the terms of the AXA Miles Program 2012, AXA granted 50 AXA Miles to every employee and eligible financial professional of AXA Group for the purpose of enhancing long-term employee-shareholder engagement. Each AXA Mile represents a phantom share of AXA stock that will convert to an actual AXA ordinary share at the end of a four-year vesting period provided the employee or financial professional remains in the employ of the company or has retired.  Half of each AXA Miles grant, or 25 AXA Miles, are further subject to vesting conditions based on achievement of improvements in specific AXA performance metrics. The total fair value of these AXA Miles awards of approximately $6 million, net of expected forfeitures, is charged to expense over the shorter of the vesting term or the period up to the date at which the participant becomes retirement eligible and is updated to reflect change in respect of the expectation for meeting the predefined performance conditions. In second quarter and first six months of 2012, the expense associated with the March 16, 2012 grant of AXA Miles was approximately $61,503and $395,462, respectively.

AllianceBernstein Long-term Incentive Compensation Plans.In fourth quarter 2011, AllianceBernstein implemented changes to AllianceBernstein's employee long-term incentive compensation award. AllianceBernstein amended all outstanding year-end deferred incentive compensation awards of active employees (i.e., those employees employed as of December 31, 2011), so that employees who terminate their employment or are terminated without cause may continue to vest, so long as the employees do not violate the agreements and covenants set forth in the applicable award agreement, including restrictions on competition, employee and client solicitation, and a claw-back for failing to follow existing risk management policies. This amendment resulted in the immediate recognition in the fourth quarter of the cost of all unamortized deferred incentive compensation on outstanding awards from prior years that would otherwise have been expensed in future periods.

In addition, awards granted in 2012, will contain the same continued vesting provisions and, accordingly, AllianceBernstein's annual incentive compensation expense will reflect 100% of the expense associated with the deferred incentive compensation awarded in each year. This approach to expense recognition will more closely match the economic cost of awarding deferred incentive compensation to the period in which the related service is performed.

During the second quarter and first six months of 2012, AllianceBernstein purchased 2.1million and6.6million Holding units for $28million and $95 million, respectively. These amounts reflect open-market purchases of 2.1 million and6.3 millionHolding units for $28 million and $91 million, respectively, with the remainder primarily relating to purchases of Holding units from employees to allow them to fulfill statutory tax withholding requirements at the time of distribution of long-term incentive compensation awards, offset by Holding units purchased by employees as part of a distribution reinvestment election.

AllianceBernstein granted to employees and Eligible Directors2.8 million restricted Holding awards during the second quarter of 2012 and11.9 million restricted Holding unit awards(including 8.7 million restricted Holding units granted in January 2012 for 2011 year-end awards) during the first six months of 2012.To fund theseawards, AllianceBernstein allocated previously repurchased Holding units that had been held in the consolidated rabbi trust. The 2011 incentive compensation awards, which were recognized as expense in fourth quarter 2011, allowed most employees to allocate their awards between restricted Holding units and deferred cash. As a result, 8.7 million restricted Holding units, valued at $130 million, for the December 2011 awards were issued from the consolidated rabbi trust in January 2012. There were approximately 8.7 million unallocated Holding units remaining in the consolidated rabbi trust as of June 30, 2012.