Stock-based Compensation Plans
|12 Months Ended|
Dec. 31, 2016
|Disclosure of Compensation Related Costs, Share-based Payments [Abstract]|
|Stock-based Compensation Plans||
Stock-based Compensation Plans
The Corporation administers a number of equity compensation plans, with awards being granted predominantly from the Bank of America Key Employee Equity Plan (KEEP). Under this plan, 450 million shares of the Corporation’s common stock, and any shares that were subject to an award under this plan as of December 31, 2014, if such award is canceled, terminates, expires, lapses or is settled in cash for any reason from and after January 1, 2015, are authorized to be used for grants of awards under the KEEP.
During 2016, the Corporation granted 163 million RSU awards to certain employees under the KEEP. Generally, one-third of the RSUs vest on each of the first three anniversaries of the grant date provided that the employee remains continuously employed with the Corporation during that time. The RSUs are authorized to settle predominantly in shares of common stock of the Corporation, and are expensed ratably over the vesting period, net of estimated forfeitures, for non-retirement eligible employees based on the grant-date fair value of the shares. Certain RSUs will be settled in cash or contain settlement provisions that subject these awards to variable accounting whereby compensation expense is adjusted to fair value based on changes in the share price of the Corporation's common stock up to the settlement date. Awards granted in prior years were predominantly cash settled.
RSUs granted to employees who are retirement eligible or will become retirement eligible during the vesting period are expensed as of the grant date or ratably over the period from the grant date to the date the employee becomes retirement eligible, net of estimated forfeitures.
The compensation cost for the stock-based plans was $2.08 billion, $2.17 billion and $2.30 billion in 2016, 2015 and 2014 and the related income tax benefit was $792 million, $824 million and $854 million for 2016, 2015 and 2014, respectively.
From time to time, the Corporation has entered into equity total return swaps to hedge a portion of cash-settled RSUs granted to certain employees as part of their compensation in order to minimize the change in the expense to the Corporation driven by fluctuations in the fair value of the RSUs. Certain of these derivatives are designated as cash flow hedges of unrecognized unvested awards with the changes in fair value of the hedge recorded in accumulated OCI and reclassified into earnings in the same period as the RSUs affect earnings. The remaining derivatives are used to hedge the price risk of cash-settled awards with changes in fair value recorded in personnel expense. For information on amounts recognized on equity total return swaps used to hedge the Corporation’s outstanding RSUs, see Note 2 – Derivatives.
The table below presents the status at December 31, 2016 of the share-settled restricted stock/units and changes during 2016.
The table below presents the status at December 31, 2016 of the cash-settled RSUs granted under the KEEP and changes during 2016.
At December 31, 2016, there was an estimated $1.2 billion of total unrecognized compensation cost related to certain share-based compensation awards that is expected to be recognized over a period of up to four years, with a weighted-average period of 1.6 years. The total fair value of restricted stock vested in 2016, 2015 and 2014 was $358 million, $145 million and $704 million, respectively. In 2016, 2015 and 2014, the amount of cash paid to settle equity-based awards for all equity compensation plans was $1.7 billion, $3.0 billion and $2.7 billion, respectively.
The table below presents the status of all option plans at December 31, 2016 and changes during 2016.
All options outstanding as of December 31, 2016 were vested and exercisable with a weighted-average remaining contractual term of less than one year and have no aggregate intrinsic value. No options have been granted since 2008.
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://www.xbrl.org/2003/role/presentationRef