MasterCard 2011 Annual Report Download - page 120

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2011, 2010 and 2009 was $4 million, $234 million and $91 million, respectively. As of December 31, 2011, there
was $56 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, 2011:
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, 2011 ...... 485 $192
Granted ......................... 49 $224
Converted ....................... (381) $192
Forfeited/expired ................. (2) $190
Outstanding at December 31, 2011 . . . 151 $203 0.9 $56
PSUs vested at December 31, 20111. . 69 $194 0.7 $26
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, 2011,
2010 and 2009 was $224, $219 and $184, respectively.
Whether or not the PSUs 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 on January 1 of the
grant year, 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 that are established at the beginning of each year in the performance
period. These goals are expected to include MasterCard performance against internal management metrics and
external relative metrics. The 2011, 2010 and 2009 grant years beginning January 1 have a performance period
ending 2013, 2012 and 2011, respectively.
These PSUs 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 PSUs 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 expense is calculated using the
number of PSUs expected to vest, multiplied by the period ending price of a share of MasterCard’s Class A
common stock on the New York Stock Exchange, less previously recorded compensation expense.
With regard to the PSUs granted in 2008, the Company awarded 200% of the original number of shares
granted and not forfeited prior to vesting based upon the Company’s performance against predetermined net
income (two-thirds weighting) and operating margin (one-third weighting) goals for the three-year period
commencing January 1, 2008 and ending December 31, 2010.
116