SunTrust 2011 Annual Report Download - page 161
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Please find page 161 of the 2011 SunTrust annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Notes to Consolidated Financial Statements (Continued)
145
The following table provides a rollforward of the Company's federal and state UTBs for the year ended December 31:
(Dollars in millions)
Balance at January 1
Increases in UTBs related to prior years
Decreases in UTBs related to prior years
Increases in UTBs related to the current year
Decreases in UTBs related to settlements
Decreases in UTBs related to lapse of the applicable statutes of limitations
Balance at December 31
2011
$132
12
(12)
8
(1)
(6)
$133
2010
$188
26
(11)
4
(57)
(18)
$132
NOTE 16 - EMPLOYEE BENEFIT PLANS
The Company sponsors various short-term incentive and LTI plans for eligible employees. The Company delivers LTIs through
various incentive programs, including stock options, restricted stock, LTI cash, and salary shares. Awards under the LTI cash plan
cliff vest over a period of three years from the date of the award and are paid in cash. MIP is the Company's short-term cash
incentive plan for key employees that provides for potential annual cash awards based on the Company's performance and/or the
achievement of business unit and individual performance objectives. Compensation expense for the MIP and LTI Cash plans was
$116 million, $77 million and $28 million for the years ended December 31, 2011, 2010, and 2009, respectively.
The terms related to TARP prohibited the payment of any bonus, incentive compensation or stock option award to our five NEOs
and certain other highly compensated executives. As a result, until the Company repaid the U.S. government's TARP investment,
SunTrust continued the use of salary shares in 2011 as defined in the U.S. Treasury’s Interim Final Rule on TARP Standards for
Compensation and Corporate Governance. Specifically, the Company paid additional base salary amounts in the form of stock
(salary shares) to the SEOs and some of the other employees who were among the next 20 most highly-compensated employees.
The Company did this each pay period in the form of stock units under the SunTrust Banks, Inc. 2009 Stock Plan (the "2009 Stock
Plan"). The stock units did not include any rights to receive dividends or dividend equivalents. As required by EESA, each salary
share was non-forfeitable upon grant and may not be sold or transferred until the expiration of a holding period (except as necessary
to satisfy applicable withholding taxes). As a result, these individuals are at risk for the value of the Company's stock price until
the stock unit is settled. The stock units are settled in cash; for the 2010 salary shares, one half was settled on March 31, 2011 and
one half will be settled on March 31, 2012, unless settled earlier due to the executive’s death. The 2011 salary shares were settled
on March 30, 2011, the date the Company repaid the U.S. government's TARP investment. The amount to be paid on settlement
of the stock units will be equal to the value of a share of SunTrust common stock on the settlement date. Benefit plan determinations
and limits were established to ensure that the salary shares were accounted for equitably within relevant benefit plans. In 2011,
the value of salary shares paid was $7 million. As of December 31, 2011, the accrual related to salary shares was $3 million.
Following the repayment by SunTrust of the U.S. Treasury’s TARP investment in the Company, the Compensation Committee of
the Board approved a revised compensation structure for the Company’s NEOs. Effective April 1, 2011, the compensation structure
includes an annual incentive opportunity under the Company’s existing MIP. A new LTI arrangement was also implemented. The
design of the LTI plan delivers 50% restricted stock units with vesting tied to the Company’s total shareholder return relative to
a peer group consisting of the banks which comprise the KBW Bank Sector Index. The remaining 50% of the LTI plan will consist
of approximately half restricted stock units, the vesting of which is tied to the achievement of a Tier 1 capital ratio target, and the
other half in stock options. These grants are reflected in the summary of stock option and restricted stock activity table, including
the aforementioned restricted stock units granted in 2011.
Stock-Based Compensation
The Company provides stock-based awards through the SunTrust Banks Inc. 2009 Stock Plan (as amended and restated effective
January 1, 2011) under which the Compensation Committee of the Board of Directors (the “Committee”) has the authority to grant
stock options, restricted stock, and restricted stock units, of which some may have performance features such as vesting tied to
the Company's total shareholder return relative to a peer group or vesting tied to the achievement of a Tier 1 capital ratio target,
to key employees of the Company. Under the 2009 Stock Plan, approximately 21 million shares of common stock is authorized
and reserved for issuance, of which no more than 17 million shares may be issued as restricted stock or stock units. See the summary
of stock option and restricted stock activity table for the shares available for additional grants. Stock options are granted at a price
which is no less than the fair market value of a share of SunTrust common stock on the grant date and may be either tax-qualified
incentive stock options or non-qualified stock options. Stock options typically vest after three years and generally have a maximum
contractual life of ten years and upon option exercise, shares are issued to employees from treasury stock.