Goldman Sachs 2015 Annual Report Download - page 219

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Restricted Stock Units
The firm grants RSUs to employees under the 2015 SIP,
which are valued based on the closing price of the
underlying shares on the date of grant after taking into
account a liquidity discount for any applicable post-vesting
and delivery transfer restrictions. RSUs generally vest and
underlying shares of common stock deliver as outlined in
the applicable award agreements. Employee award
agreements generally provide that vesting is accelerated in
certain circumstances, such as on retirement, death,
disability and conflicted employment. Delivery of the
underlying shares of common stock is conditioned on the
grantees satisfying certain vesting and other requirements
outlined in the award agreements.
The table below presents the activity related to RSUs.
Restricted Stock
Units Outstanding
Weighted Average
Grant-Date Fair Value
of Restricted Stock
Units Outstanding
Future
Service
Required
No Future
Service
Required
Future
Service
Required
No Future
Service
Required
Outstanding,
December 2014 6,656,869 421,289,845 $143.07 $129.52
Granted 1, 2 4,193,176 10,450,094 164.23 158.58
Forfeited (726,013) (165,355) 152.06 147.10
Delivered 3— (13,966,859) — 125.29
Vested 2(4,474,876) 4,474,876 140.29 140.29
Outstanding,
December 2015 5,649,156 422,082,601 159.82 148.00
1. The weighted average grant-date fair value of RSUs granted during
2015, 2014 and 2013 was $160.19, $151.40 and $122.59, respectively. The
fair value of the RSUs granted during 2015, 2014 and 2013 includes a
liquidity discount of 9.2%, 13.8% and 13.7%, respectively, to reflect post-
vesting and delivery transfer restrictions of up to 4 years.
2. The aggregate fair value of awards that vested during 2015, 2014 and 2013
was $2.40 billion, $2.39 billion and $2.26 billion, respectively.
3. Includes RSUs that were cash settled.
4. Includes restricted stock subject to future service requirements as of
December 2015 and December 2014 of 6,354 and 20,651 shares,
respectively.
In the first quarter of 2016, the firm granted to its
employees 15.0 million year-end RSUs, of which
4.0 million RSUs require future service as a condition of
delivery for the related shares of common stock. These
awards are subject to additional conditions as outlined in
the award agreements. Generally, shares underlying these
awards, net of required withholding tax, deliver over a
three-year period but are subject to post-vesting and
delivery transfer restrictions through January 2021. These
grants are not included in the table above.
Stock Options
Stock options generally vest as outlined in the applicable
stock option agreement. In general, options expire on the
tenth anniversary of the grant date, although they may be
subject to earlier termination or cancellation under certain
circumstances in accordance with the terms of the
applicable stock option agreement and the SIP in effect at
the time of grant.
The table below presents the activity related to outstanding
stock options, all of which were granted in 2005 through
2008.
Options
Outstanding
Weighted
Average
Exercise
Price
Aggregate
Intrinsic
Value
(in millions)
Weighted
Average
Remaining
Life
(years)
Outstanding,
December 2014 19,955,338 $120.40 $1,516 3.28
Exercised (5,199,063) 96.57
Outstanding,
December 2015 14,756,275 128.79 891 2.38
Exercisable,
December 2015 14,756,275 128.79 891 2.38
The total intrinsic value of options exercised during
2015, 2014 and 2013 was $531 million, $2.03 billion and
$26 million, respectively.
The table below presents options outstanding.
Exercise Price
Options
Outstanding
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Life
(years)
$ 75.00 - $ 89.99 8,780,151 $ 78.78 3.00
90.00 - 194.99 —— —
195.00 - 209.99 5,976,124 202.27 1.48
Outstanding,
December 2015 14,756,275 128.79 2.38
As of December 2015, there was $440 million of total
unrecognized compensation cost related to non-vested
share-based compensation arrangements. This cost is
expected to be recognized over a weighted average period
of 1.54 years.
The table below presents the share-based compensation and
the related excess tax benefit.
Year Ended December
$ in millions 2015 2014 2013
Share-based compensation $2,304 $2,101 $2,039
Excess net tax benefit related to
options exercised 134 549 3
Excess net tax benefit related to
share-based awards 1406 788 94
1. Represents the net tax benefit recognized in additional paid-in capital on
stock options exercised, the delivery of common stock underlying share-
based awards and dividend equivalents paid on RSUs.
Goldman Sachs 2015 Form 10-K 207