Share-Based Payments

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

Share-Based Payments

NOTE 15. SHARE-BASED PAYMENTS

Under our various share-based payment plans, senior and other management employees and nonemployee directors have received performance stock units and other nonvested stock units.

As of December 31, 2024, we were authorized to issue up to approximately 84 million shares of common stock (including shares that may be issued upon exercise of outstanding options or upon vesting of performance stock units or other nonvested stock units) pursuant to these various plans:

•Performance stock units, which are nonvested stock units, which are valued based upon the market price of our common stock at the date of grant and performance expectations. These distribute in the form of AT&T common stock and cash at the end of a three-year period, subject to the achievement of certain performance goals. We treat the cash-settled portion of these awards as a liability.

•Restricted stock and restricted stock units are valued at the market price of our common stock at the date of grant and do not have any performance conditions. Restricted stock predominantly vests over a three- to ten-year period and restricted stock units predominantly vest over a three-year period.

We account for our share-based payment arrangements based on the fair value of the awards on their respective grant date, which may affect our ability to fully realize the value shown on our consolidated balance sheets of deferred tax assets associated with compensation expense. We record a valuation allowance when our future taxable income is not expected to be sufficient to recover the asset. Accordingly, there can be no assurance that the current stock price of our common shares will rise to levels sufficient to realize the entire tax benefit currently reflected on our consolidated balance sheets. However, to the extent we generate excess tax benefits (i.e., those additional tax benefits in excess of the deferred taxes associated with compensation expense previously recognized) the potential future impact on income would be reduced.

Our consolidated statements of income include the share-based compensation cost recognized for the plans described above as “Selling, general and administrative” expense. Those expenses, as well as the associated tax benefits, are reflected in the table below:

	2024		2023		2022
Performance stock units	$	127	$	79	$	168
Restricted stock and stock units	378		400		350
Total	$	505	$	479	$	518
Income tax benefit	$	123	$	118	$	127

A summary of the status of our nonvested stock units as of December 31, 2024, and changes during the year then ended is presented as follows (shares in millions):

Nonvested Stock Units	Shares	Weighted-Average Grant- Date Fair Value
Nonvested at January 1, 2024	28	$	20.05
Granted	37	18.68
Vested	(25)	18.42
Forfeited	(3)	18.55
Nonvested at December 31, 2024	37	$	19.88

As of December 31, 2024, there was $666 of total unrecognized compensation cost related to nonvested share-based payment arrangements outstanding. That cost is expected to be recognized over a weighted-average period of 2.21 years. The total fair value of shares vested during the year was $452 for 2024, compared to $592 for 2023 and $783 for 2022.