Fifth Third Bank 2014 Annual Report Download - page 152

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
150 Fifth Third Bancorp
Other stock-based compensation
The Bancorp’s Board of Directors previously 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 were settled in
cash with 50% settled on June 15, 2012 and 50% settled on June 15,
2013. The amount paid on settlement of the phantom stock units
was 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 years ended December 31, 2014,
2013 and 2012. No phantom stock units were settled during the year
ended December 31, 2014 and 200,130 and 199,813 phantom stock
units were settled during the years ended December 31, 2013 and
2012, respectively.
Performance units are payable contingent upon the Bancorp
achieving certain predefined performance targets over the three-year
measurement period. Awards granted during 2014, 2013 and 2012
will be entirely settled in stock. The performance targets are based
on the Bancorp’s performance relative to a defined peer group.
During 2014, 2013 and 2012, 322,567, 348,595, and 344,741
performance units, respectively, were granted by the Bancorp. These
awards were granted at a weighted-average grant-date fair value of
$15.61, $16.15 and $14.36 per unit during 2014, 2013 and 2012,
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,
2014, 2013 and 2012, there were 599,101, 690,039 and 827,709
shares, respectively, purchased by participants and the Bancorp
recognized stock-based compensation expense of $1 million in each
of the respective years.