Macy's 2014 Annual Report Download - page 86

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-39
Restricted Stock and Restricted Stock Units
The weighted average grant date fair values of restricted stock units granted during 2014, 2013 and 2012 are as
follows:
2014 2013 2012
Restricted stock units ............................................................................... $ 59.41 $ 42.54 $ 39.52
The fair value of the Target Shares and restricted stock awards are based on the fair value of the underlying shares on
the date of grant. The fair value of the portion of the Target Shares that relate to a relative TSR performance objective was
determined using a Monte Carlo simulation analysis to estimate the total shareholder return ranking of the Company
among a ten-or twelve-company executive compensation peer group over the remaining performance periods. The
expected volatility of the Company’s common stock at the date of grant was estimated based on a historical average
volatility rate for the approximate three-year performance period. The dividend yield assumption was based on historical
and anticipated dividend payouts. The risk-free interest rate assumption was based on observed interest rates consistent
with the approximate three-year performance measurement period.
Compensation expense is recorded for all restricted stock and restricted stock unit awards based on the amortization
of the fair market value at the date of grant over the period the restrictions lapse or over the performance period of the
performance-based restricted stock units.
Activity related to restricted stock awards for 2014 is as follows:
Shares
Weighted
Average
Grant Date
Fair Value
(thousands)
Nonvested, beginning of period.................................................................................. 79.2 $ 22.58
Granted........................................................................................................................ — —
Forfeited...................................................................................................................... (0.6) 23.43
Vested.......................................................................................................................... (52.7) 22.16
Nonvested, end of period ............................................................................................ 25.9 $ 23.43
Activity related to restricted stock units for 2014 is as follows:
Shares
Weighted
Average
Grant Date
Fair Value
(thousands)
Nonvested, beginning of period.................................................................................. 1,191.8 $ 41.16
Granted – performance-based ..................................................................................... 289.3 59.81
Performance adjustment.............................................................................................. 46.9 40.63
Granted – time-based .................................................................................................. 202.3 58.83
Dividend equivalents................................................................................................... 21.0 59.52
Forfeited...................................................................................................................... (37.1) 42.12
Vested.......................................................................................................................... (421.3) 40.40
Nonvested, end of period ............................................................................................ 1,292.9 $ 48.47