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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of stock-based compensation expense by award type

The Company recognized the following stock-based compensation expense by award type and expense category line item during the periods indicated (in millions):



	Three Months Ended
	March 31,
Award type	2019		2018
Stock appreciation rights	$	3.9	$	3.5
Restricted stock units	27.7		27.2
Common stock equivalents	0.2		0.2
Total (1)	$	31.8	$	30.9



	Three Months Ended
	March 31,
Expense category line item	2019		2018
Cost of services and product development	$	11.3	$	11.4
Selling, general and administrative	20.4		18.2
Acquisition and integration charges (2)	0.1		1.3
Total (1)	$	31.8	$	30.9

(1) Includes charges of $20.9 million and $17.8 million during the three months ended March 31, 2019 and 2018, respectively, for awards to retirement-eligible employees. Those awards vest on an accelerated basis.

(2) Includes charges related to an acquisition and the related integration process.

Schedule of stock-based compensation expense by expense category



	Three Months Ended
	March 31,
Expense category line item	2019		2018
Cost of services and product development	$	11.3	$	11.4
Selling, general and administrative	20.4		18.2
Acquisition and integration charges (2)	0.1		1.3
Total (1)	$	31.8	$	30.9

(2) Includes charges related to an acquisition and the related integration process.

Schedule of fair value assumptions of SARs

The fair value of a SARs award is determined on the date of grant using the Black-Scholes-Merton valuation model with the following weighted average assumptions:



	Three Months Ended
	March 31,
	2019		2018
Expected dividend yield (1)	—	%	—	%
Expected stock price volatility (2)	21	%	21	%
Risk-free interest rate (3)	2.5	%	2.5	%
Expected life in years (4)	4.6		4.5


(1)	The expected dividend yield assumption was based on both the Company's historical and anticipated dividend payouts. Historically, the Company has not paid cash dividends on its Common Stock.


(2)	The determination of expected stock price volatility was based on both historical Common Stock prices and implied volatility from publicly traded options in the Common Stock.


(3)	The risk-free interest rate was based on the yield of a U.S. Treasury security with a maturity similar to the expected life of the award.


(4)	The expected life represents the Company’s estimate of the weighted average period of time the SARs are expected to be outstanding (that is, the period between the service inception date and the expected exercise date).

Stock appreciation rights

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of summary of the changes in SARS, RSUs, and CSEs outstanding

The following table summarizes changes in SARs outstanding during the three months ended March 31, 2019:



	Stock Appreciation Rights ("SARs") (in millions)		Per Share Weighted Average Exercise Price		Per Share Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (Years)
Outstanding at December 31, 2018	1.2		$	89.45	$	19.88	4.33
Granted	0.3		143.01		32.58		6.85
Exercised	(0.1	)	57.65		14.93		n/a
Outstanding at March 31, 2019 (1) (2)	1.4		$	100.54	$	22.42	4.70
Vested and exercisable at March 31, 2019 (2)	0.7		$	83.60	$	18.48	3.64

n/a = not applicable

(1) As of March 31, 2019, 0.7 million of the total SARs outstanding were unvested. The Company expects that substantially all of those unvested awards will vest in future periods.

(2) As of March 31, 2019, the total SARs outstanding had an intrinsic value of $72.2 million. On such date, SARs vested and exercisable had an intrinsic value of $50.5 million.

Restricted stock units

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of summary of the changes in SARS, RSUs, and CSEs outstanding

The following table summarizes the changes in RSUs outstanding during the three months ended March 31, 2019:



	Restricted Stock Units ("RSUs") (in millions)		Per Share Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018	1.4		$	101.75
Granted (1)	0.5		139.38
Vested and released	(0.5	)	96.19
Outstanding at March 31, 2019 (2) (3)	1.4		$	118.18

(1)

The 0.5 million of RSUs granted during the three months ended March 31, 2019 consisted of 0.2 million of performance-based RSUs awarded to executives and 0.3 million of service-based RSUs awarded to non-executive employees. The performance-based awards include RSUs in final settlement of 2018 grants and approximately 0.1 million of RSUs representing the target amount of the grant for the year ending December 31, 2019 that is tied to an increase in Gartner's total contract value for 2019. The number of performance-based RSUs that will ultimately be awarded for 2019 ranges from 0% to 200% of the target amount and will be finalized based on the actual increase in Gartner's total contract value for 2019 as measured on December 31, 2019. If the specified minimum level of achievement is not met, the performance-based RSUs pertaining to 2019 will be forfeited in their entirety and any previously recorded compensation expense will be reversed.


(2)	The Company expects that substantially all of the RSUs outstanding will vest in future periods.

(3)

As of March 31, 2019, the weighted average remaining contractual term of the RSUs outstanding was approximately 1.8 years.

Common stock equivalents

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of summary of the changes in SARS, RSUs, and CSEs outstanding

The following table summarizes the changes in CSEs outstanding during the three months ended March 31, 2019:



	Common Stock Equivalents ("CSEs")		Per Share Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018	109,780		$	24.96
Granted	1,119		154.98
Converted to shares of Common Stock upon grant	(852	)	125.85
Outstanding at March 31, 2019	110,047		$	25.50