MasterCard 2010 Annual Report Download - page 127

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
RSUs will be settled in shares of the Company’s Class A common stock after the vesting period. The total
intrinsic value of RSUs converted into shares of Class A common stock during the years ended December 31,
2010, 2009 and 2008 was $234 million, $91 million and $194 million, respectively. As of December 31, 2010,
there was $40 million of total unrecognized compensation cost related to non-vested RSUs. The cost is expected
to be recognized over a weighted average period of 2 years.
Performance Stock Units
The following table summarizes the Company’s PSU activity for the year ended December 31, 2010:
Units
Weighted-Average
Grant-Date Fair
Value
Weighted Average
Remaining
Contractual Term
Aggregate
Intrinsic
Value
(in thousands) (in years) (in millions)
Outstanding at January 1, 2010 1,027 $145
Granted 57 $219
Converted (550) $106
Forfeited/expired (49) $187
Outstanding at December 31, 2010 485 $192 0.5 $109
PSUs vested at December 31, 20101182 $189 0.5 $ 41
1Includes PSUs for participants that are eligible to retire and thus have fully earned their awards.
The weighted-average grant-date fair value of PSUs granted during the years ended December 31, 2010,
2009 and 2008 was $219, $184 and $192, respectively.
With regard to the performance stock units granted in 2010, whether or not the performance stock units vest
will be based upon MasterCard performance against a predetermined return on equity goal, with an average of
return on equity over the three-year period commencing January 1, 2010 yielding threshold, target or maximum
performance, with a potential adjustment determined at the discretion of the MasterCard Human Resources and
Compensation Committee of the Board of Directors using subjective quantitative and qualitative goals expected
to be established at the beginning of each year in the performance period from 2010 through 2012. These goals
are expected to include MasterCard performance against internal management metrics and external relative
metrics.
With regard to the performance stock units granted in 2009, whether or not the performance stock units vest
will be based upon MasterCard performance against a predetermined return on equity goal, with an average of
return on equity over the three-year period commencing January 1, 2009 yielding threshold, target or maximum
performance, with a potential adjustment determined at the discretion of the MasterCard Human Resources and
Compensation Committee of the Board of Directors using subjective quantitative and qualitative goals expected
to be established at the beginning of each year in the performance period from 2009 through 2011. These goals
are expected to include MasterCard performance against internal management metrics and external relative
metrics.
These performance stock units have been classified as equity awards, will be settled by delivering stock to
the employees and contain service and performance conditions. The initial fair value of each PSU is the closing
price on the New York Stock Exchange of the Company’s Class A common stock on the date of grant. Given that
the performance terms are subjective and not fixed on the date of grant, the performance units will be remeasured
at the end of each reporting period, at fair value, until the time the performance conditions are fixed and the
ultimate number of shares to be issued is determined. Estimates are adjusted as appropriate. Compensation
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