Morgan Stanley 2010 Annual Report Download - page 227

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The components of the Company’s stock-based compensation expense (net of cancellations) are presented below:
2010 2009
Fiscal
2008
One Month
Ended
December 31,
2008
(dollars in millions)
Deferred stock ............................................. $1,075 $1,120 $1,659 $ 66
Stock options .............................................. 1 17 83 5
Performance-based stock units ................................ 39 — — —
Employee Stock Purchase Plan(1) .............................. — 4 10 —
Total(2) .............................................. $1,115 $1,141 $1,752 $ 71
(1) The Company discontinued the Employee Stock Purchase Plan effective June 1, 2009.
(2) Amounts for 2010, 2009 and fiscal 2008 include $222 million, $198 million and $90 million, respectively, primarily related to equity
awards that were granted in 2011, 2010 and December 2008, respectively, to employees who are retirement-eligible under the award
terms. Amounts for the one month ended December 31, 2008 include $2 million primarily related to equity awards that were granted in
2010 to employees who are retirement-eligible under the award terms.
The table above excludes stock-based compensation expense recorded in discontinued operations, which was
approximately $3 million, $11 million, $40 million and $2 million for 2010, 2009, fiscal 2008 and the one month
ended December 31, 2008, respectively. See Note 1 for additional information on discontinued operations.
The tax benefit for stock-based compensation expense related to deferred stock and stock options was $382
million, $380 million, $557 million and $23 million for 2010, 2009, fiscal 2008 and the one month ended
December 31, 2008, respectively. The tax benefit for stock-based compensation expense included in discontinued
operations in 2010, 2009, fiscal 2008 and the one month ended December 31, 2008 was approximately $1
million, $3 million, $15 million and $1 million, respectively.
At December 31, 2010, the Company had approximately $975 million of unrecognized compensation cost related
to unvested stock-based awards (excluding 2010 year-end awards granted in January 2011 to nonretirement-
eligible employees, which will begin to amortize in 2011). The unrecognized compensation cost relating to
unvested stock-based awards expected to vest will primarily be recognized over the next two years.
In connection with awards under its equity-based compensation plans, the Company is authorized to issue shares
of its common stock held in treasury or newly issued shares. At December 31, 2010, approximately 105 million
shares were available for future grant under these plans.
The Company generally uses treasury shares to deliver shares to employees and has an ongoing repurchase
authorization that includes repurchases in connection with awards granted under its equity-based compensation
plans. Share repurchases by the Company are subject to regulatory approval. See Note 15 for additional
information on the Company’s share repurchase program.
Deferred Stock Awards. The Company has made deferred stock awards pursuant to several equity-based
compensation plans. The plans provide for the deferral of a portion of certain key employees’ discretionary
compensation with awards made in the form of restricted common stock or in the right to receive unrestricted
shares of common stock in the future. Awards under these plans are generally subject to vesting over time
contingent upon continued employment and to restrictions on sale, transfer or assignment until the end of a
specified period, generally two to three years from date of grant. All or a portion of an award may be canceled if
employment is terminated before the end of the relevant restriction period. All or a portion of a vested award also
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