Prudential 2012 Annual Report Download - page 169

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
17. SHARE-BASED PAYMENTS (continued)
The following chart summarizes the compensation cost recognized and the related income tax benefit for stock options, restricted
stock units, performance shares and performance units for the years ended December 31:
2012 2011 2010
Total
Compensation Cost
Recognized
Income Tax
Benefit
Total
Compensation Cost
Recognized
Income Tax
Benefit
Total
Compensation Cost
Recognized
Income Tax
Benefit
(in millions)
Employee stock options .................. $ 45 $16 $ 44 $16 $ 39 $14
Employee restricted stock units ............ 84 30 83 30 80 29
Employee performance shares and
performance units ..................... 26 9 14 5 15 6
Total ............................. $155 $55 $141 $51 $134 $49
Compensation costs for all stock based compensation plans capitalized in deferred acquisition costs for the years ended December 31,
2012, 2011 and 2010 were de minimis.
Stock Options
Each stock option granted has an exercise price no less than the fair market value of the Company’s Common Stock on the date of
grant and has a maximum term of 10 years. Generally, one third of the option grant vests in each of the first three years.
A summary of the status of the Company’s stock option grants is as follows:
Employee Stock Options
Shares
Weighted Average
Exercise Price
Outstanding at December 31, 2011 ....................................................... 19,335,322 $57.22
Granted ........................................................................ 2,674,909 59.28
Exercised ....................................................................... (2,801,968) 33.17
Forfeited ....................................................................... (78,948) 58.48
Expired ........................................................................ (511,935) 76.80
Outstanding at December 31, 2012 ....................................................... 18,617,380 $60.59
Vested and expected to vest at December 31, 2012 .......................................... 18,413,795 $60.60
Exercisable at December 31, 2012 ....................................................... 13,889,546 $61.03
The weighted average grant date fair value of employee stock options granted during the years ended December 31, 2012, 2011 and
2010 was $16.36, $20.21, and $18.00, respectively.
The total intrinsic value (i.e., market price of the stock less the option exercise price) of employee stock options exercised during the
years ended December 31, 2012, 2011 and 2010 was $66 million, $49 million, and $35 million, respectively.
The weighted average remaining contractual term and the aggregate intrinsic value of stock options outstanding, vested and expected
to vest and exercisable as of December 31, 2012 is as follows:
December 31, 2012
Employee Stock Options
Weighted Average
Remaining
Contractual Term
Aggregate
Intrinsic Value
(in years) (in millions)
Outstanding ...................................................................... 5.01 $76
Vested and expected to vest ......................................................... 4.97 $76
Exercisable ...................................................................... 3.89 $73
Restricted Stock Units, Performance Share Awards and Performance Unit Awards
A restricted stock unit is an unfunded, unsecured right to receive a share of Common Stock at the end of a specified period of time,
which is subject to forfeiture and transfer restrictions. Generally, the restrictions will lapse on the third anniversary of the date of grant.
Performance shares and performance units are awards denominated in Common Stock. The number of units is determined over the
performance period, and may be adjusted based on the satisfaction of certain performance goals. Performance share awards are payable in
Common Stock. Performance unit awards are payable in cash.
Prudential Financial, Inc. 2012 Annual Report 167