Charles Schwab 2014 Annual Report Download - page 101
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THE CHARLES SCHWAB CORPORATION
Notes to Consolidated Financial Statements
(Tabular Amounts in Millions, Except Per Share Data, Option Price Amounts, Ratios, or as Noted)
- 83 -
Accumulated other comprehensive income balances are as follows:
Net unrealized Total
gain on securities accumulated other
available for sale Other comprehensive income
Balance at December 31, 2011 $ 10 $ (2) $ 8
Other net changes 289 1 290
Balance at December 31, 2012 $ 299 $ (1) $ 298
Other net changes (290) 1 (289)
Balance at December 31, 2013 $ 9 $ - $ 9
Other net changes 156 - 156
Balance at December 31, 2014 $ 165 $ - $ 165
19. Employee Incentive, Retirement, and Deferred Compensation Plans
The Company’s stock incentive plans provide for granting options, restricted stock units, and restricted stock awards to
employees, officers, and directors. In addition, the Company offers retirement and employee stock purchase plans to eligible
employees and sponsors deferred compensation plans for eligible officers and non-employee directors.
A summary of the Company’s stock-based compensation and related income tax benefit is as follows:
Year Ended December 31, 2014 2013 2012
Stock option expense $ 44 $ 52 $ 57
Restricted stock unit expense 66 60 40
Restricted stock award expense - - 5
Employee stock purchase plan expense 5 4 3
Total stock-based compensation expense $ 115 $ 116 $ 105
Income tax benefit on stock-based compensation $ (43) $ (43) $ (39)
The Company issues shares for stock options and restricted stock awards from treasury stock. At December 31, 2014, the
Company was authorized to grant up to 59 million common shares under its existing stock incentive plans. Additionally, at
December 31, 2014, the Company had 41 million shares reserved for future issuance under its employee stock purchase plan.
As of December 31, 2014, there was $206 million of total unrecognized compensation cost, net of forfeitures, related to
outstanding stock options, restricted stock awards, and restricted stock units, which is expected to be recognized through
2018 with a remaining weighted-average service period of 2.8 years.
Stock Option Plan
Options are granted for the purchase of shares of common stock at an exercise price not less than market value on the date of
grant, and expire within seven or ten years from the date of grant. Options generally vest annually over a three- to five-year
period from the date of grant. Certain options were granted at an exercise price above the market value of common stock on
the date of grant (i.e., premium-priced options).