Share-Based Compensation Plans

The Northern Trust Corporation 2017 Long-Term Incentive Plan provides for the grant of nonqualified and incentive stock options; tandem and free-standing stock appreciation rights; stock awards in the form of restricted stock, restricted stock units and other stock awards; and performance awards.

Beginning with the grants made on February 21, 2017 under the Corporation’s prior equity incentive plan, restricted stock unit and performance stock unit grants continue to vest in accordance with the original terms of the award if the applicable employee retires after satisfying applicable age and service requirements. For all applicable periods, stock option grants continue to vest in accordance with the original terms of the award if the applicable employee retires after satisfying applicable age and service requirements.

The Corporation granted 793,995 stock unit awards with a total grant-date fair value of $82.6 million during the three months ended March 31, 2018, compared to 839,354 stock unit awards with a total grant-date fair value of $73.9 million during the three months ended March 31, 2017. Current-quarter compensation expense included $26.9 million attributable to restricted stock units granted to retirement-eligible employees that were expensed in their entirety on the date of grant, compared to $21.6 million in the prior-year quarter.

There were no non-qualified stock options grants in the current quarter, compared to 468,381 non-qualified stock option grants with a total grant-date fair value of $9.0 million during the three months ended March 31, 2017. Compensation expense for the three months ended March 31, 2017 included $5.5 million attributable to stock options granted to retirement-eligible employees that were expensed in their entirety on the date of grant.

The Corporation granted 242,232 performance stock units with a total grant-date fair value of $25.4 million during the three months ended March 31, 2018, compared to 206,091 performance stock units with a total grant-date fair value of $18.1 million during the three months ended March 31, 2017. Current-quarter compensation expense included $4.7 million attributable to performance stock units granted to retirement-eligible employees that are expensed from the date of grant through the requisite service period which ends on June 30, 2018, compared to $3.3 million in the prior-year quarter.

Restricted stock unit award compensation expense for the three months ended March 31, 2018 and 2017 included $2.7 million and $2.5 million, respectively, attributable to restricted stock units vested in full and expensed in their entirety upon date of grant.

Total compensation expense for share-based payment arrangements and the associated tax impacts were as follows for the three months ended March 31, 2018 and 2017.

Table 62: Total Compensation Expense for Share-Based Payment Arrangements



	Three Months Ended March 31,
(In Millions)	2018		2017
Restricted Stock Unit Awards	$	46.7	$	41.2
Stock Options	0.8		6.3
Performance Stock Units	9.0		8.5
Total Share-Based Compensation Expense	56.5		56.0
Tax Benefits Recognized	$	14.0	$	21.2