Morgan Stanley 2014 Annual Report Download - page 274

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Stock-Based Compensation Plans. The accounting guidance for stock-based compensation requires
measurement of compensation cost for stock-based awards at fair value and recognition of compensation cost
over the service period, net of estimated forfeitures (see Note 2).
The components of the Company’s stock-based compensation expense (net of cancellations) are presented below:
2014 2013 2012
(dollars in millions)
Restricted stock units(1) .................................................. $1,212 $1,140 $864
Stock options ........................................................... 5 15 4
Performance-based stock units ............................................. 45 29 29
Total ............................................................. $1,262 $1,184 $897
(1) Amounts for 2014, 2013 and 2012 include $31 million, $25 million and $31 million, respectively, related to stock-based awards that
were granted in 2015, 2014 and 2013, respectively, to employees who satisfied retirement-eligible requirements under award terms that
do not contain a service period.
The table above excludes stock-based compensation expense recorded in discontinued operations, which was
approximately $3 million in 2012. See Note 1 for additional information on discontinued operations.
The tax benefit related to stock-based compensation expense was $404 million, $371 million and $306 million
for 2014, 2013 and 2012, respectively. The tax benefit for stock-based compensation expense included in
discontinued operations was $1 million in 2012.
At December 31, 2014, the Company had $779 million of unrecognized compensation cost related to unvested
stock-based awards. Absent estimated or actual forfeitures or cancellations, this amount of unrecognized
compensation cost will be recognized as $506 million in 2015, $207 million in 2016 and $66 million thereafter.
These amounts do not include 2014 performance year awards granted in January 2015, which will begin to be
amortized in 2015 (see “2014 Performance Year Deferred Compensation Awards” herein).
In connection with awards under its stock-based compensation plans, the Company is authorized to issue shares
of its common stock held in treasury or newly issued shares. At December 31, 2014, approximately 87 million
shares were available for future grant under these plans.
The Company generally uses treasury shares, if available, to deliver shares to employees and has an ongoing
repurchase authorization that includes repurchases in connection with awards granted under its stock-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.
Restricted Stock Units. The Company has granted restricted stock unit awards pursuant to several stock-based
compensation plans. The plans provide for the deferral of a portion of certain employees’ incentive 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 one to three years from the 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 may be
canceled in certain limited situations, including termination for cause during the relevant restriction period.
Recipients of stock-based awards may have voting rights, at the Company’s discretion, and generally receive
dividend equivalents.
270