PNC Bank 2015 Annual Report Download - page 197

The weighted-average grant date fair value of incentive/
performance unit awards and restricted share/restricted share
unit awards granted in 2015, 2014 and 2013 was $91.57,
$80.79 and $64.77 per share, respectively. The total intrinsic
value of incentive/performance unit and restricted share/
restricted share unit awards vested during 2015, 2014 and
2013 was approximately $175 million, $119 million and $63
million, respectively. We recognize compensation expense for
such awards ratably over the corresponding vesting and/or
performance periods for each type of program.
Table 108: Nonvested Incentive/Performance Unit Awards
and Restricted Share/Restricted Share Unit Awards –
Rollforward
Shares in thousands
Nonvested
Incentive/
Performance
Units
Weighted-
Average
Grant Date
Fair Value
Nonvested
Restricted
Share/
Restricted
Share
Units
Weighted-
Average
Grant Date
Fair Value
December 31, 2014 1,837 $69.84 3,652 $69.03
Granted (a) 711 90.77 1,112 92.08
Vested/Released (a) (682) 66.17 (1,259) 61.15
Forfeited (36) 73.56 (172) 79.25
December 31, 2015 1,830 $79.27 3,333 $79.26
(a) Includes adjustments for achieving specific performance goals for Incentive/
Performance Unit Awards granted in prior periods.
In the preceding table, the units and related weighted-average
grant date fair value of the incentive/performance unit awards
exclude the effect of dividends on the underlying shares, as
those dividends will be paid in cash if and when the
underlying shares are issued to the participants.
Liability Awards
A summary of all nonvested, cash-payable incentive/
performance units and restricted share unit activity follows:
Table 109: Nonvested Cash-Payable Incentive/Performance
Units and Restricted Share Units – Rollforward
In thousands
Cash-Payable
Incentive/
Performance
Units
Cash-Payable
Restricted
Share Units Total
Outstanding at December 31,
2014 177 658 835
Granted (a) 81 364 445
Vested and Released (a) (98) (350) (448)
Forfeited (43) (8) (51)
Outstanding at December 31,
2015 117 664 781
(a) Includes adjustments for achieving specific performance goals for Cash-Payable
Incentive/Performance Units granted in prior periods.
Included in the preceding table are cash-payable restricted
share units granted to certain executives. These grants were
made primarily as part of an annual bonus incentive deferral
plan. While there are time-based and other vesting criteria,
there are generally no market or performance criteria
associated with these awards. Prior to the 2015 grant,
compensation expense recognized related to these awards was
recorded in prior periods as part of the annual cash bonus
process. Due to certain requisite service period changes in the
award agreements starting with the 2015 grant (for the 2014
performance year), compensation expense is recognized
ratably over a four year period commensurate with the
performance year plus the three years of service-based vesting
requirements. As of December 31, 2015, the aggregate
intrinsic value of all outstanding nonvested cash-payable
incentive/performance units and restricted share units was $74
million.
The total of all share-based liability awards paid out during
2015, 2014 and 2013 was approximately $41 million, $38
million and $29 million, respectively.
Employee Stock Purchase Plan
As of December 31, 2015, our ESPP had approximately
1 million shares available for issuance. Full-time employees
with six months and part-time employees with 12 months of
continuous employment with a participating PNC entity are
eligible to participate in the ESPP at the commencement of the
next six-month offering period. Eligible participants may
purchase our common stock at 95% of the fair market value
on the last day of each six-month offering period. No charge
to earnings is recorded with respect to the ESPP.
Table 110: Employee Stock Purchase Plan – Summary
Year ended December 31 Shares Issued Purchase Price Per Share
2015 168,962 $90.87 and $90.55
2014 157,856 $84.60 and $86.67
2013 167,260 $69.27 and $73.70
BlackRock LTIP and Exchange Agreements
BlackRock adopted the 2002 LTIP program to help attract and
retain qualified professionals. At that time, PNC agreed to
transfer up to 4 million shares of BlackRock common stock to
fund a portion of the 2002 LTIP program and future LTIP
programs approved by BlackRock’s Board of Directors,
subject to certain conditions and limitations. Approximately
1.1 million shares of BlackRock common stock were
transferred by PNC and distributed to LTIP participants in
connection with the 2002 LTIP program.
In 2009, PNC’s obligation to deliver its BlackRock common
shares to BlackRock under LTIP programs was replaced with
an obligation to deliver shares of BlackRock’s Series C
Preferred Stock. This change was part of an Exchange
Agreement with BlackRock whereby PNC acquired
2.9 million shares of Series C Preferred Stock from
BlackRock in exchange for common shares.
The PNC Financial Services Group, Inc. – Form 10-K 179