PG&E 2011 Annual Report Download - page 81

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NOTE 6: COMMON STOCK AND SHARE-BASED COMPENSATION (Continued)
The following table summarizes RSU activity for 2011:
Number of Weighted Average
Restricted Grant-Date
Stock Units Fair Value
Nonvested at January 1 . . . 1,154,396 $ 39.74
Granted .............. 841,122 $ 45.10
Vested ................ (280,937) $ 39.72
Forfeited .............. (88,533) $ 42.60
Nonvested at December 31 .1,626,048 $ 42.57
Restricted Stock
Prior to 2011, PG&E Corporation had awarded shares of restricted common stock to eligible employees. The
terms of the restricted stock award agreements provide that the shares will vest over a five year period. Although the
recipients of restricted common stock possess voting rights, they may not sell or transfer their shares until the shares
vest.
For restricted common stock awarded prior to 2009, the terms of the agreements provide that 60% of the shares
vest over a period of three years at the rate of 20% per year. If PG&E Corporation’s annual total shareholder return
(‘‘TSR’’) is in the top quartile of its comparator group, as measured for the three immediately preceding calendar
years, the restrictions on the remaining 40% of the shares will lapse in the third year. If PG&E Corporation’s TSR is
not in the top quartile for that period, then the restrictions on the remaining 40% of the shares will lapse in the fifth
year. Compensation expense related to the portion of the restricted stock award that is subject to conditions based
on TSR is recognized over the shorter of the requisite service period and three years. Dividends declared on
restricted stock are paid to recipients only when the restricted stock vests.
The weighted average grant-date fair value per-share of restricted common stock granted during 2010 and 2009
was $42.97 and $35.53, respectively. PG&E Corporation did not award restricted common stock in 2011. The total
fair value of restricted common stock that vested during 2011, 2010, and 2009 was $12 million, $8 million, and
$24 million, respectively. The tax benefit from restricted common stock that vested during 2011, 2010, and 2009 was
not material. As of December 31, 2011, there was less than $1 million of total unrecognized compensation cost
related to restricted common stock.
The following table summarizes restricted common stock activity for 2011:
Number of Weighted Average
Shares of Grant-Date
Restricted Stock Fair Value
Nonvested at January 1 475,880 $ 40.87
Granted ........... —
Vested ............ (312,539) $ 38.08
Forfeited .......... (3,585) $ 46.04
Nonvested at
December 31 ...... 159,756 $ 46.49
Performance Shares
In 2011, PG&E Corporation granted 774,125 contingent performance shares to eligible employees under the
2006 LTIP. Unlike performance shares awarded prior to 2010 (see below), which are settled in cash, 2011 and 2010
grants will be settled in PG&E Corporation common stock and are classified as share-based equity awards. The
vesting of the performance shares granted in 2011 and 2010 is dependent upon three years of continuous service.
Additionally the amount of common stock that recipients are entitled to receive, if any, will be determined based on
PG&E Corporation’s TSR relative to the performance of a specified group of peer companies for the applicable
three-year performance period. Total compensation expense for these shares is based on the grant-date fair value,
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