Fifth Third Bank 2012 Annual Report Download - page 145

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
143 Fifth Third Bancorp
Other stock-based compensation
During 2009, the Bancorp’s Board of Directors approved the use of
phantom stock units as part of its compensation for executives in
connection with changes made in reaction to the TARP
compensation rules. On February 22, 2011, the Bancorp redeemed
its Series F preferred stock held by the U.S. Treasury under the
CPP. As a result of this redemption, the last payment of phantom
stock occurred in April of 2011. The phantom stock units were
issued under the Bancorp’s 2008 Incentive Compensation Plan. The
number of phantom stock units was determined each pay period by
dividing the amount of salary to be paid in phantom stock units for
that pay period, by the reported closing price of the Bancorp’s
common stock on the pay date for such pay period. The phantom
stock units vested immediately on issuance. Phantom stock was
expensed based on the number of outstanding units multiplied by
the closing price of the Bancorp’s stock at period end. The phantom
stock units did not include any rights to receive dividends or
dividend equivalents. Phantom stock units issued on or before June
12, 2010 were settled in cash upon the earlier to occur of June 15,
2011 or the executive’s death. Units issued thereafter will be settled
in cash with 50% settled on June 15, 2012 and 50% to be settled on
June 15, 2013. The amount paid on settlement of the phantom
stock units is equal to the total amount of phantom stock units
settled at the reported closing price of the Bancorp’s common stock
on the settlement date. Under the phantom stock program, no
phantom stock units were granted during the year ended December
31, 2012, and phantom stock units of 132,649 and 488,703 were
granted with a weighted average grant price of $14.40 and $12.80
during the years ended December 31, 2011 and 2010, respectively.
During 2012 and 2011, 199,813 and 521,091, phantom stock units
were settled, respectively. No phantom stock units were settled
during 2010.
Performance units are payable contingent upon the Bancorp
achieving certain predefined performance targets over the three-year
measurement period. Awards granted during 2012, 2011 and 2010
will be entirely settled in stock. The performance targets are based
on the Bancorp’s performance relative to a defined peer group.
During 2012, 2011 and 2010, 344,741, 328,061, and 61,320
performance units, respectively, were granted by the Bancorp. These
awards were granted at a weighted-average grant-date fair value of
$14.36, $13.36 and $13.76 per unit during 2012, 2011 and 2010,
respectively.
The Bancorp sponsors a stock purchase plan that allows
qualifying employees to purchase shares of the Bancorp’s common
stock with a 15% match. During the years ended December 31,
2012, 2011 and 2010, there were 827,709, 886,447 and 749,127
shares, respectively, purchased by participants and the Bancorp
recognized stock-based compensation expense of $1 million in each
of the respective years.