v3.22.0.1
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2021
Employee Benefit Plans [Abstract]  
Employee Benefit Plans
Note 16—Employee Benefit Plans
Pension and Postretirement
 
Plans
An analysis of the projected benefit obligations
 
for our pension plans and accumulated benefit obligations
 
for
our postretirement health and life
 
insurance plans follows:
Millions of Dollars
Pension Benefits
Other Benefits
2021
2020
2021
2020
U.S.
Int’l.
U.S.
Int’l.
Change in Benefit Obligation
Benefit obligation at January 1
$
2,548
4,403
2,319
3,880
170
216
Service cost
73
61
85
54
2
2
Interest cost
53
79
66
85
4
6
Plan participant contributions
-
-
-
1
16
18
Plan amendments
-
-
-
2
-
(30)
Actuarial (gain) loss
(117)
(176)
319
398
(16)
7
Benefits paid
(654)
(162)
(241)
(151)
(40)
(49)
Curtailment
12
-
-
2
1
-
Recognition of termination benefits
9
-
-
3
-
-
Foreign currency exchange
 
rate change
-
(81)
-
129
-
-
Benefit obligation at December 31
*
$
1,924
4,124
2,548
4,403
137
170
*Accumulated benefit obligation portion of above at
 
December 31:
$
1,793
3,658
2,359
4,095
Change in Fair Value
 
of Plan Assets
Fair value of plan assets at January
 
1
$
1,770
4,793
1,591
4,306
-
-
Actual return on plan assets
97
147
321
416
-
-
Company contributions
451
119
99
60
24
31
Plan participant contributions
-
1
-
1
16
18
Benefits paid
(654)
(162)
(241)
(151)
(40)
(49)
Foreign currency exchange
 
rate change
-
(86)
-
161
-
-
Fair value of plan assets at December 31
$
1,664
4,812
1,770
4,793
-
-
Funded Status
$
(260)
688
(778)
390
(137)
(170)
Millions of Dollars
Pension Benefits
Other Benefits
2021
2020
2021
2020
U.S.
Int’l.
U.S.
Int’l.
Amounts Recognized in the
 
Consolidated Balance Sheet at
 
December 31
Noncurrent assets
$
1
991
-
746
-
-
Current liabilities
(29)
(15)
(56)
(11)
(34)
(39)
Noncurrent liabilities
(232)
(288)
(722)
(345)
(103)
(131)
Total
 
recognized
$
(260)
688
(778)
390
(137)
(170)
Weighted-Average
 
Assumptions Used to
 
Determine Benefit Obligations at
 
December 31
Discount rate
2.80
%
2.15
2.30
1.80
2.65
2.15
Rate of compensation increase
4.00
3.40
4.00
3.10
Interest crediting rate
 
for applicable benefits
2.50
2.10
Weighted-Average
 
Assumptions Used to
 
Determine Net Periodic Benefit Cost
 
for
 
Years Ended
 
December 31
Discount rate
2.60
%
1.80
3.05
2.35
2.35
3.10
Expected return on plan assets
5.20
2.50
5.80
3.60
Rate of compensation increase
4.00
3.40
4.00
3.35
Interest crediting rate
 
for applicable benefits
2.10
4.10
For both U.S. and international pension
 
plans, the overall expected long-term
 
rate of return is developed
 
from the
expected future return of each asset
 
class, weighted by the expected allocation
 
of pension assets to that asset
class.
 
We rely on a variety of independent
 
market forecasts
 
in developing the expected rate
 
of return for each
class of assets.
During 2021, the actuarial gains related
 
to the benefit obligations for
 
U.S. and international plans were primarily
related to an increase in the discount
 
rates.
 
During 2020 and 2019, the actuarial losses related to
 
the benefit
obligations for U.S. and international
 
plans were primarily related to a decrease
 
in the discount rates.
The following tables summarize information
 
related to the Company's
 
pension plans with projected and
accumulated benefit obligations
 
in excess of the fair value of the plans'
 
assets:
Millions of Dollars
Pension Benefits
2021
2020
U.S.
Int’l.
U.S.
Int’l.
Pension Plans with Projected Benefit Obligation
 
in
Excess of Plan Assets
Projected benefit obligation
$
261
362
2,548
391
Fair value of plan assets
-
58
1,770
35
Pension Plans with Accumulated Benefit
 
Obligation in
Excess of Plan Assets
Accumulated benefit obligation
$
234
271
2,359
338
Fair value of plan assets
-
9
1,770
35
Included in accumulated other comprehensive
 
income (loss) at December 31 were the following
 
before-tax
 
amounts that had not been recognized
 
in net periodic benefit cost:
Millions of Dollars
Pension Benefits
Other Benefits
2021
2020
2021
2020
U.S.
Int’l.
U.S.
Int’l.
Unrecognized net actuarial loss
 
(gain)
$
188
86
467
326
(1)
14
Unrecognized prior service cost
 
(credit)
-
1
-
-
(145)
(182)
Millions of Dollars
Pension Benefits
Other Benefits
2021
2020
2021
2020
U.S.
Int’l.
U.S.
Int’l.
Sources of Change in Other
 
Comprehensive Income (Loss)
Net gain (loss) arising during the period
$
134
207
(83)
(120)
16
(7)
Amortization of actuarial loss included
in income (loss)*
145
33
95
21
-
1
Net change during the period
$
279
240
12
(99)
16
(6)
Prior service credit (cost) arising during the
period
$
-
-
-
(1)
-
30
Amortization of prior service (credit)
included in income (loss)
-
(1)
-
(1)
(37)
(31)
Net change during the period
$
-
(1)
-
(2)
(37)
(1)
*Includes settlement (gains) losses recognized in 2021 and 2020.
The components of net periodic benefit cost of all defined
 
benefit plans are presented in the following
 
table:
Millions of Dollars
Pension Benefits
Other Benefits
2021
2020
2019
2021
2020
2019
U.S.
Int’l.
U.S.
Int’l.
U.S.
Int’l.
Components of Net
 
Periodic Benefit Cost
Service cost
$
73
61
85
54
79
69
2
2
1
Interest cost
53
79
66
85
79
97
4
6
8
Expected return on plan
assets
(80)
(120)
(85)
(145)
(74)
(138)
-
-
-
Amortization of prior
 
service credit
-
(1)
-
(1)
-
(2)
(37)
(31)
(33)
Recognized net actuarial
 
loss (gain)
43
33
51
22
54
32
-
1
(2)
Settlements loss (gain)
102
-
44
(1)
62
-
-
-
-
Curtailment loss
12
-
-
-
-
-
-
-
-
Net periodic benefit cost
$
203
52
161
14
200
58
(31)
(22)
(26)
The components of net periodic benefit cost,
 
other than the service cost component, are included
 
in the “Other
expenses” line item on our consolidated
 
income statement.
We recognized pension
 
settlement losses of $
102
 
million in 2021, $
43
 
million in 2020, and $
62
 
million in 2019 as
lump-sum benefit payments from certain
 
U.S. and international pension
 
plans exceeded the sum of service and
interest costs for
 
those plans and led to recognition of settlement
 
losses.
In determining net pension and other postretirement
 
benefit costs, we amortize
 
prior service costs on a straight-
line basis over the average
 
remaining service period of employees expected to
 
receive benefits under the plan.
 
For
net actuarial gains and losses, we amortize
10
 
percent of the unamortized balance each year.
We have multiple non-pension
 
postretirement benefit plans
 
for health and life insurance.
 
The health care plans
are contributory and subject to various
 
cost sharing features, with participant
 
and company contributions adjusted
annually; the life insurance plans
 
are noncontributory.
 
The measurement of the U.S. pre-65 retiree
 
medical
accumulated postretirement
 
benefit obligation assumes a health care
 
cost trend rate of
6.5
 
percent in 2022 that
declines to
5
 
percent by 2028.
 
The measurement of the U.S. post-65
 
retiree medical accumulated
 
postretirement
benefit obligation assumes a health care
 
cost trend rate of
4.25
 
percent in 2022 that increases to
5
 
percent by
2028.
Plan Assets
We follow a policy of broadly
 
diversifying pension plan assets across asset
 
classes and individual holdings.
 
As a
result, our plan assets have no significant
 
concentrations of credit risk.
 
Asset classes that are considered
appropriate include U.S. equities,
 
non-U.S. equities, U.S. fixed
 
income, non-U.S. fixed income, real
 
estate and
private equity investments.
 
Plan fiduciaries may consider and add other asset classes to
 
the investment program
from time to time.
 
The target allocations for
 
plan assets are
22
 
percent equity securities,
74
 
percent debt
securities,
3
 
percent real estate
 
and
1
 
percent other.
 
Generally,
 
the plan investments are publicly
 
traded,
therefore minimizing liquidity risk
 
in the portfolio.
 
The following is a description of the valuation
 
methodologies used for the pension plan assets.
 
There have been
no changes in the methodologies used at December 31, 2021 and
 
2020.
●
Fair values of equity securities and government
 
debt securities categorized in Level
 
1 are primarily based
on quoted market prices in active
 
markets for identical assets
 
and liabilities.
●
Fair values of corporate
 
debt securities, agency and mortgage-backed
 
securities and government debt
securities categorized in Level
 
2 are estimated using recently
 
executed transactions
 
and quoted market
prices for similar assets and liabilities in active markets
 
and for identical assets and liabilities in markets
that are not active.
 
If there have been no market transactions
 
in a particular fixed income security,
 
its fair
value is calculated by pricing models that
 
benchmark the security against other securities with actual
market prices.
 
When observable quoted market
 
prices are not available, fair
 
value is based on pricing
models that use something other than actual market
 
prices (e.g., observable inputs such as benchmark
yields, reported trades and issuer spreads
 
for similar securities), and these securities are categorized
 
in
Level 3 of the fair value hierarchy.
 
●
Fair values of investments
 
in common/collective trusts are
 
determined by the issuer of each fund based
on the fair value of the underlying assets.
●
Fair values of mutual funds are based
 
on quoted market prices, which represent
 
the net asset value of
shares held.
●
Time deposits are valued at cost,
 
which approximates fair value.
●
Cash is valued at cost, which approximates
 
fair value.
 
Fair values of international
 
cash equivalents
categorized in Level 2 are
 
valued using observable yield curves, discounting
 
and interest rates.
 
U.S. cash
balances held in the form of short-term fund units
 
that are redeemable at the measurement
 
date are
categorized as Level 2.
●
Fair values of exchange
 
-traded derivatives classified
 
in Level 1 are based on quoted market
 
prices.
 
For
other derivatives classified in Level 2, the values
 
are generally calculated from
 
pricing models with market
input parameters from third
 
-party sources.
●
Fair values of insurance contracts
 
are valued at the present value
 
of the future benefit payments owed
 
by
the insurance company to
 
the plans’ participants.
●
Fair values of real estate
 
investments are valued
 
using real estate valuation
 
techniques and other
methods that include reference
 
to third-party sources and sales comparables
 
where available.
●
A portion of U.S. pension plan assets is held as a participating interest
 
in an insurance annuity contract,
which is calculated as the market
 
value of investments held under
 
this contract, less the accumulated
benefit obligation covered by
 
the contract.
 
The participating interest is classified as
 
Level 3 in the fair
value hierarchy as
 
the fair value is determined via a combination
 
of quoted market prices, recently
executed transactions,
 
and an actuarial present value computation
 
for contract obligations.
 
At
December 31, 2021, the participating interest
 
in the annuity contract was valued
 
at $
83
 
million and
consisted of $
206
 
million in debt securities, less $
123
 
million for the accumulated benefit obligation
covered by the contract.
 
At December 31, 2020, the participating interest
 
in the annuity contract was
valued at $
94
 
million and consisted of $
233
 
million in debt securities, less $
139
 
million for the
accumulated benefit obligation
 
covered by the contract.
 
The participating interest is not available
 
for
meeting general pension benefit obligations
 
in the near term.
 
No future company contributions
 
are
required and no new benefits are being accrued under
 
this insurance annuity contract.
The fair values of our pension plan assets at
 
December 31, by asset class were as follows:
 
Millions of Dollars
U.S.
International
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
2021
Equity securities
U.S.
$
3
-
5
8
-
-
-
-
International
42
-
-
42
-
-
-
-
Mutual funds
17
-
-
17
236
403
-
639
Debt securities
Corporate
-
1
-
1
-
-
-
-
Mutual funds
-
-
-
-
511
-
-
511
Cash and cash equivalents
-
-
-
-
68
-
-
68
Real estate
-
-
-
-
-
-
157
157
Total in fair
 
value hierarchy
$
62
1
5
68
815
403
157
1,375
Investments measured at net asset value*
Equity securities
Common/collective trusts
$
394
417
Debt securities
Common/collective trusts
1,073
3,015
Cash and cash equivalents
9
-
Real estate
36
1
Total**
$
62
1
5
1,580
815
403
157
4,808
 
*In accordance with FASB ASC Topic 715, “Compensation—Retirement Benefits,”
 
certain investments that are to be measured at fair value
 
 
using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
 
The fair value
 
 
amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Change in
 
Fair Value of Plan Assets.
**Excludes the participating interest in the insurance annuity contract with a net asset of $
83
 
million and net receivables related to security
 
 
transactions of $
5
 
million.
The fair values of our pension plan assets at
 
December 31, by asset class were as follows:
 
Millions of Dollars
U.S.
International
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
2020
Equity securities
U.S.
$
-
3
5
8
-
-
-
-
International
99
-
-
99
-
-
-
-
Mutual funds
72
-
-
72
235
384
-
619
Debt securities
Corporate
-
1
-
1
-
-
-
-
Mutual funds
-
-
-
-
455
-
-
455
Cash and cash equivalents
-
-
-
-
74
-
-
74
Derivatives
-
-
-
-
6
-
-
6
Real estate
-
-
-
-
-
-
142
142
Total in fair
 
value hierarchy
$
171
4
5
180
770
384
142
1,296
Investments measured at net asset value*
Equity securities
Common/collective trusts
$
678
372
Debt securities
Common/collective trusts
730
3,007
Cash and cash equivalents
8
-
Real estate
79
112
Total**
$
171
4
5
1,675
770
384
142
4,787
 
*In accordance with FASB ASC Topic 715, “Compensation—Retirement Benefits,”
 
certain investments that are to be measured at fair value
 
 
using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
 
The fair value
 
 
amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Change in
 
 
Fair Value of Plan Assets.
**Excludes the participating interest in the insurance annuity contract with a net asset of $
94
 
million and net receivables related to security
 
 
transactions of $
7
 
million.
Level 3 activity was not material for all periods.
Our funding policy for U.S. plans is to contribute
 
at least the minimum required by the Employee
 
Retirement
Income Security Act of 1974 and the Internal Revenue
 
Code of 1986, as amended.
 
Contributions to foreign plans
are dependent upon local laws and tax
 
regulations.
 
In 2022, we expect to contribute
 
approximately $
115
 
million
to our domestic qualified and nonqualified pension
 
and postretirement benefit plans
 
and $
80
 
million to our
international qualified and nonqualified pension and
 
postretirement benefit plans.
The following benefit payments,
 
which are exclusive of amounts
 
to be paid from the insurance annuity contract
and which reflect expected future
 
service, as appropriate, are expected
 
to be paid:
Millions of Dollars
Pension
Other
Benefits
Benefits
U.S.
Int’l.
2022
$
369
152
21
2023
185
152
18
2024
176
158
15
2025
154
162
14
2026
144
164
12
2027–2031
557
893
44
The following table summarizes our
 
severance accrual activity:
Millions of Dollars
2021
2020
2019
Balance at January 1
$
24
23
48
Accruals
170
14
(1)
Benefit payments
(116)
(13)
(24)
Balance at December 31
$
78
24
23
Accruals include severance costs
 
associated with our company-wide restructuring
 
program.
 
Of the remaining
balance at December 31, 2021, $
43
 
million is classified as short-term.
Defined Contribution Plans
Most U.S. employees are eligible
 
to participate in the ConocoPhillips Savings
 
Plan (CPSP).
 
Employees can deposit
up to
75
 
percent of their eligible pay,
 
subject to statutory limits, in the CPSP to a choice of
17
 
investment options.
 
Employees who participate in the CPSP and contribute
1
 
percent of their eligible pay receive
 
a
6
 
percent company
cash match with a potential company
 
discretionary cash contribution of up
 
to
6
 
percent.
 
Effective January 1, 2019,
new employees, rehires, and employees
 
that elected to opt out of Title II of the ConocoPhillips
 
Retirement Plan are
eligible to receive a Company Retirement
 
Contribution (CRC) of
6
 
percent of eligible pay into
 
their CPSP.
 
After
three years
 
of service with the company,
 
the employee is
100
 
percent vested in any
 
CRC.
 
Company contributions
charged to expense for the CPSP and
 
predecessor plans were $
93
 
million in 2021, $
62
 
million in 2020, and $
82
million in 2019.
We have several
 
defined contribution plans for our
 
international employees, each with its own
 
terms and eligibility
depending on location.
 
Total
 
compensation expense recognized
 
for these international plans was
 
approximately
$
26
 
million in 2021, $
25
 
million in 2020, and $
30
 
million in 2019.
Share-Based Compensation Plans
The 2014 Omnibus Stock and Performance Incentive
 
Plan of ConocoPhillips (the Plan) was approved
 
by
shareholders in May 2014, replacing
 
similar prior plans and providing that no new awards
 
shall be granted under
the prior plans.
 
Over its
10
-year life, the Plan allows the issuance
 
of up to
79
 
million shares of our common stock
for compensation to our employees
 
and directors; however,
 
as of the effective date of the
 
Plan, (i) any shares of
common stock available for
 
future awards under the prior plans
 
and (ii) any shares of common stock
 
represented
by awards granted
 
under the Plan or the prior plans that are forfeited,
 
expire or are cancelled without
 
delivery of
shares of common stock or which result
 
in the forfeiture of shares
 
of common stock back to the company
 
shall be
available for awards
 
under the Plan.
 
Of the
79
 
million shares available for
 
issuance under the Plan, no more than
40
 
million shares of common stock are
 
available for incentive stock
 
options.
 
The Human Resources and
Compensation Committee of our Board
 
of Directors is authorized to
 
determine the types, terms, conditions and
limitations of awards granted.
 
Awards may be granted
 
in the form of, but not
 
limited to, stock options, restricted
stock units and performance share units
 
to employees and non-employee directors
 
who contribute to the
company’s continued
 
success and profitability.
Total
 
share-based compensation expense is
 
measured using the grant date
 
fair value for our equity-classified
awards and the settlement date
 
fair value for our liability-classified awards.
 
We recognize share
 
-based
compensation expense over the shorter
 
of the service period (i.e., the stated period of time required
 
to earn the
award); or the period beginning at the start
 
of the service period and ending when an employee first becomes
eligible for retirement, but
 
not less than six months, as this is the minimum period of time required
 
for an award to
not be subject to forfeiture.
 
Our share-based compensation programs
 
generally provide accelerated
 
vesting (i.e., a
waiver of the remaining period of service required
 
to earn an award) for awards
 
held by employees at the time of
their retirement.
 
Some of our share-based awards
 
vest ratably (i.e., portions
 
of the award vest at different
 
times)
while some of our awards cliff vest
 
(i.e., all of the award vests at
 
the same time).
 
We recognize
 
expense on a
straight-line basis over the service period for
 
the entire award, whether the
 
award was granted
 
with ratable or cliff
vesting.
Compensation Expense
—Total
 
share-based compensation expense recognized
 
in net income (loss) and the
associated tax benefit were:
Millions of Dollars
2021
2020
2019
Compensation cost
$
304
159
274
Tax benefit
 
76
40
71
Stock Options
—Stock options granted under
 
the provisions of the Plan and prior plans permit purchase of our
common stock at exercise
 
prices equivalent to the average
 
fair market value of ConocoPhillips
 
common stock on
the date the options were granted.
 
The options have terms of 10 years
 
and generally vest ratably,
 
with one-third
of the options awarded vesting and
 
becoming exercisable on
 
each anniversary date following the date
 
of grant.
 
Options awarded to certain employees
 
already eligible for retirement
 
vest within six months of the grant
 
date, but
those options do not become exercisable
 
until the end of the normal vesting period.
 
Beginning in 2018, stock
option grants were discontinued
 
and replaced with three-year,
 
time-vested restricted
 
stock units which generally
will be cash-settled for 2018 and 2019 awards
 
and stock-settled beginning
 
with 2020 awards.
The following summarizes our stock
 
option activity for the year ended December 31, 2021:
Millions of Dollars
Weighted-Average
Aggregate
Options
Exercise Price
Intrinsic Value
Outstanding at December 31, 2020
16,922,525
$
55.12
$
22
Exercised
(3,846,361)
51.40
68
Expired or cancelled
(1,102,381)
53.47
Outstanding at December 31, 2021
11,973,783
$
56.46
$
188
Vested at December
 
31, 2021
11,973,783
$
56.46
$
188
Exercisable at December 31, 2021
11,973,783
$
56.46
$
188
The weighted-average remaining
 
contractual term of outstanding
 
options, vested options and exercisable
 
options
at December 31, 2021, were all
3.06
 
years.
 
The aggregate intrinsic value
 
of options exercised was
 
$
23
 
million in
2020 and $
39
 
million in 2019.
 
 
During 2021, we received $
198
 
million in cash and realized a tax
 
benefit of $
15
 
million from the exercise of
options.
 
At December 31, 2021, all outstanding stock
 
options were fully vested and there
 
was no remaining
compensation cost to be recorded.
Stock Unit Program—
Generally,
 
restricted stock units are granted
 
annually under the provisions of the Plan and
vest in an aggregate installment
 
on the third anniversary of the grant
 
date.
 
In addition, restricted stock
 
units
granted under the Plan for a variable
 
long-term incentive program
 
vest ratably in three
 
equal annual installments
beginning on the first anniversary of the grant
 
date.
 
Restricted stock units are also
 
granted ad hoc to attract
 
or
retain key personnel,
 
and the terms and conditions under which these restricted
 
stock units vest vary by award.
Stock-Settled
Upon vesting, these restricted stock
 
units are settled by issuing one share of ConocoPhillips
 
common stock per
unit.
 
Units awarded to retirement
 
eligible employees vest six months
 
from the grant date; however,
 
those units
are not issued as common stock until
 
the earlier of separation from the company
 
or the end of the regularly
scheduled vesting period.
 
Until issued as stock, most recipients
 
of the restricted stock units receive
 
a cash
payment of a dividend equivalent or
 
an accrued reinvested dividend
 
equivalent that is charged to retained
earnings.
 
The grant date fair market
 
value of these restricted stock
 
units is deemed equal to the average
ConocoPhillips stock price on the grant
 
date.
 
The grant date fair market
 
value of units that do not receive a
dividend equivalent while unvested
 
is deemed equal to the average
 
ConocoPhillips stock price on the grant
 
date,
less the net present value of the dividends that
 
will not be received.
The following summarizes our stock
 
-settled stock unit activity for the year
 
ended December 31, 2021:
Weighted-Average
Millions of Dollars
Stock Units
Grant Date Fair Value
Total
 
Fair Value
Outstanding at December 31, 2020
6,431,985
$
58.94
Granted
4,590,103
46.56
Forfeited
(566,047)
48.59
Issued
(2,810,730)
54.74
$
144
Outstanding at December 31, 2021
7,645,311
$
53.81
Not Vested at
 
December 31, 2021
5,509,133
53.81
At December 31, 2021, the remaining unrecognized
 
compensation cost from the unvested
 
stock-settled units was
$
126
 
million, which will be recognized over
 
a weighted-average
 
period of
1.67
 
years, the longest period being
2.59
years.
 
The weighted-average
 
grant date fair value
 
of stock unit awards granted
 
during 2020 and 2019 was $
57.40
and $
67.77
, respectively.
 
The total fair value of stock
 
units issued during 2020 and 2019 was $
143
 
million and
$
225
 
million, respectively.
Cash-Settled
Cash settled executive restricted
 
stock units granted in 2018 and
 
2019 replaced the stock option program.
 
These
restricted stock units, subject to
 
elections to defer,
 
will be settled in cash equal to the fair
 
market value of a share
of ConocoPhillips common stock per unit
 
on the settlement date and are classified
 
as liabilities on the balance
sheet.
 
Units awarded to retirement
 
eligible employees vest six months
 
from the grant date; however,
 
those units
are not settled until the earlier of separation
 
from the company or the end of the regularly
 
scheduled vesting
period.
 
Compensation expense is initially measured
 
using the average fair market
 
value of ConocoPhillips common
stock and is subsequently adjusted,
 
based on changes in the ConocoPhillips stock price through
 
the end of each
subsequent reporting period, through
 
the settlement date.
 
Recipients receive an accrued reinvested
 
dividend
equivalent that is charged to
 
compensation expense.
 
The accrued reinvested dividend
 
is paid at the time of
settlement, subject to the terms and
 
conditions of the award.
 
Beginning with executive restricted
 
stock units
granted in 2020 awards will be
 
settled in stock.
The following summarizes our cash
 
-settled stock unit activity for the year
 
ended December 31, 2021:
Weighted-Average
Millions of Dollars
Stock Units
Grant Date Fair Value
Total
 
Fair Value
Outstanding at December 31, 2020
614,615
$
39.95
Granted
11,186
57.19
Forfeited
(2,927)
51.43
Issued
(396,398)
50.75
$
20
Outstanding at December 31, 2021
226,476
$
72.18
Not Vested at
 
December 31, 2021
59,443
72.18
At December 31, 2021, there was
no
 
remaining unrecognized compensation
 
cost to be recorded for the unvested
cash-settled units.
 
The weighted-average grant
 
date fair value of stock
 
unit awards granted during
 
2020 and 2019
were $
41.59
 
and $
68.20
, respectively.
 
The total fair value of stock
 
units issued during 2020 and 2019 were
negligible and $
6
 
million, respectively.
Performance Share Program
—Under the Plan, we also annually grant restricted
 
performance share units (PSUs) to
senior management.
 
These PSUs are authorized three years
 
prior to their effective grant
 
date (the performance
period).
 
Compensation expense is initially measured
 
using the average fair market
 
value of ConocoPhillips
common stock and is subsequently adjusted,
 
based on changes in the ConocoPhillips stock price through
 
the end
of each subsequent reporting period, through
 
the grant date for stock
 
-settled awards and the settlement
 
date for
cash-settled awards.
 
Stock-Settled
For performance periods beginning before
 
2009, PSUs do not vest until the employee becomes
 
eligible for
retirement by reaching age 55
 
with five years of service, and restrictions
 
do not lapse until the employee separates
from the company.
 
With respect to awards for performance
 
periods beginning in 2009 through 2012, PSUs do not
vest until the earlier of the date the employee
 
becomes eligible for retirement
 
by reaching age 55 with five years
of service or five years after the grant
 
date of the award, and restrictions
 
do not lapse until the earlier of the
employee’s separation
 
from the company or five years
 
after the grant date (although
 
recipients can elect to defer
the lapsing of restrictions until separation).
 
We recognize compensation
 
expense for these awards
 
beginning on
the grant date and ending on the date
 
the PSUs are scheduled to vest.
 
Since these awards are authorized
 
three
years prior to the effective
 
grant date, for
 
employees eligible for retirement
 
by or shortly after the grant date,
 
we
recognize compensation expense
 
over the period beginning on the date of authorization
 
and ending on the date of
grant.
 
Until issued as stock, recipients of the PSUs receive
 
a quarterly cash payment of a dividend
 
equivalent that
is charged to retained earnings.
 
Beginning in 2013, PSUs authorized for future grants
 
will vest, absent employee
election to defer,
 
upon settlement following the conclusion
 
of the three-year performance period.
 
We recognize
compensation expense over the period beginning
 
on the date of authorization and
 
ending on the conclusion of the
performance period.
 
PSUs are settled by issuing one share
 
of ConocoPhillips common stock per unit.
The following summarizes our stock
 
-settled Performance Share
 
Program activity for the year ended
 
December 31, 2021:
Weighted-Average
Millions of Dollars
Stock Units
Grant Date Fair Value
Total
 
Fair Value
Outstanding at December 31, 2020
1,736,728
$
50.56
Issued
(287,881)
49.91
$
18
Outstanding at December 31, 2021
1,448,847
$
50.69
Not Vested at
 
December 31, 2021
3,191
$
48.61
At December 31, 2021, there was
no
 
remaining unrecognized compensation
 
cost to be recorded on the unvested
stock-settled performance share
 
s.
 
The weighted-average grant
 
date fair value of stock-settled
 
PSUs granted
during 2020 and 2019 was $
58.61
 
and $
68.90
, respectively.
 
The total fair value of stock-settled
 
PSUs issued during
2020 and 2019 was $
13
 
million and $
25
 
million, respectively.
Cash-Settled
In connection with and immediately following
 
the separation of our Downstream
 
businesses in 2012, grants of new
PSUs, subject to a shortened performance period,
 
were authorized.
 
Once granted, these PSUs vest,
 
absent
employee election to defer,
 
on the earlier of five years after
 
the grant date of the award
 
or the date the employee
becomes eligible for retirement.
 
For employees eligible for retirement
 
by or shortly after the grant date,
 
we
recognize compensation expense
 
over the period beginning on the date of authorization
 
and ending on the date of
grant.
 
Otherwise, we recognize compensation
 
expense beginning on the grant
 
date and ending on the date the
PSUs are scheduled to vest.
 
These PSUs are settled in cash equal to the fair
 
market value of a share
 
of
ConocoPhillips common stock per unit on
 
the settlement date and thus are classified
 
as liabilities on the balance
sheet.
 
Until settlement occurs,
 
recipients of the PSUs receive a quarterly cash
 
payment of a dividend equivalent
that is charged to compensation expense.
 
Beginning in 2013, PSUs authorized for future
 
grants will vest upon settlement
 
following the conclusion of the
three-year performance period.
 
We recognize compensation
 
expense over the period beginning on the date
 
of
authorization and ending at the conclusion
 
of the performance period.
 
These PSUs will be settled in cash equal to
the fair market value of a share
 
of ConocoPhillips common stock per unit
 
on the settlement date and are
 
classified
as liabilities on the balance sheet.
 
For performance periods beginning before
 
2018, during the performance
period, recipients of the PSUs do not receive a
 
quarterly cash payment of a dividend
 
equivalent, but after the
performance period ends, until settlement
 
in cash occurs, recipients of the PSUs receive
 
a quarterly cash payment
of a dividend equivalent that is charged
 
to compensation expense.
 
For the performance period beginning in 2018,
recipients of the PSUs receive an accrued reinvested
 
dividend equivalent that is charged
 
to compensation expense.
 
The accrued reinvested dividend
 
is paid at the time of settlement, subject to the terms
 
and conditions of the
award.
The following summarizes our cash
 
-settled Performance Share
 
Program activity for the year ended
 
December 31, 2021:
Weighted-Average
Millions of Dollars
Stock Units
Grant Date Fair Value
Total
 
Fair Value
Outstanding at December 31, 2020
124,529
$
39.95
Granted
1,073,228
46.65
Settled
(1,080,078)
48.13
$
52
Outstanding at December 31, 2021
117,679
$
72.18
At December 31, 2021, all outstanding
 
cash-settled performance awards
 
were fully vested and there was
no
remaining compensation cost to
 
be recorded.
 
The weighted-average
 
grant date fair value
 
of cash-settled PSUs
granted during 2020 and 2019 was $
58.61
 
and $
68.90
, respectively.
 
The total fair value of cash-settled
performance share awards
 
settled during 2020 and 2019 was $
116
 
million and $
171
 
million, respectively.
From inception of the Performance Share
 
Program through 2013,
 
approved PSU awards were
 
granted after the
conclusion of performance periods.
 
Beginning in February 2014, initial target PSU awards
 
are issued near the
beginning of new performance periods.
 
These initial target PSU awards
 
will terminate at the end of the
performance periods and will be settled after the
 
performance periods have ended.
 
Also in 2014, initial target PSU
awards were issued for open
 
performance periods that began in
 
prior years.
 
For the open performance period
beginning in 2012, the initial target PSU awards
 
terminated at the end of the three-year
 
performance period and
were replaced with approved
 
PSU awards.
 
For the open performance period beginning in
 
2013, the initial target
PSU awards terminated at
 
the end of the three-year performance period
 
and were settled after the performance
period ended.
 
There is no effect on recognition
 
of compensation expense.
Other
—In addition to the above active programs,
 
we have outstanding shares
 
of restricted stock and restricted
stock units that were either issued
 
as part of our non-employee director compensation
 
program for current
 
and
former members of the company’s
 
Board of Directors,
 
as part of an executive compensation
 
program that has
been discontinued or acquired as a result
 
of an acquisition.
 
Generally, the recipients
 
of the restricted shares or
units receive a dividend or dividend equivalent.
The following summarizes the aggregate
 
activity of these restricted shares
 
and units for the year ended
 
December 31, 2021:
Weighted-Average
Millions of Dollars
Stock Units
Grant Date Fair Value
Total
 
Fair Value
Outstanding at December 31, 2020
970,099
$
47.78
Granted
797,704
46.43
Cancelled
(1,948)
27.80
Issued
(149,488)
46.80
$
8
Outstanding at December 31, 2021
1,616,367
$
47.24
Not Vested at
 
December 31, 2021
695,958
$
45.87
At December 31, 2021, the remaining compensation
 
cost from the unvested
 
restricted stock was $
20
 
million,
which will be recognized over a weighted-average
 
period of
1.46
 
years, the longest period being
2
 
years. The
weighted-average
 
grant date fair value
 
of awards granted during
 
2020 and 2019 was $
51.46
 
and $
63.58
,
respectively.
 
The total fair value of awards
 
issued during 2020 and 2019 was $
6
 
million and $
11
 
million,
respectively.