14.  Stock-Based Compensation

Restricted Stock and RSUs.

Restricted stock and restricted stock units (“RSUs”) activity for the three months ended March 31, 2018 is summarized below.

 

 

In January 2018, the Company granted 527,337 RSUs or shares of restricted stock to employees as part of 2017 annual incentive compensation that vest ratably over three years from the date of grant and 209,201 RSUs or shares of restricted stock to employees that cliff vest 100% on January 31, 2021. The Company values restricted stock and RSUs at their grant-date fair value as measured by BlackRock’s common stock price. The total fair market value of RSUs/restricted stock granted to employees during the three months ended March 31, 2018 was $427 million.  

At March 31, 2018, the intrinsic value of outstanding RSUs was $1.2 billion, reflecting a closing stock price of $541.72.

At March 31, 2018, total unrecognized stock-based compensation expense related to unvested RSUs was $575 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of 1.5 years.

Performance-Based RSUs.  

Performance-based RSU activity for the three months ended March 31, 2018 is summarized below.

 

 

In January 2018, the Company granted 199,068 performance-based RSUs to certain employees that cliff vest 100% on January 31, 2021. These awards are amortized over a service period of three years. The number of shares distributed at vesting could be higher or lower than the original grant based on the level of attainment of predetermined Company performance measures. In January 2018, the Company granted 23,376 performance-based RSUs to certain employees based on the attainment of Company performance measures during the performance period.

The Company initially values performance-based RSUs at their grant-date fair value as measured by BlackRock’s common stock price. The total grant-date fair market value of performance-based RSUs granted to employees during the three months ended March 31, 2018 was $121 million.

At March 31, 2018, the intrinsic value of outstanding performance-based RSUs was $464 million, reflecting a closing stock price of $541.72.

At March 31, 2018, total unrecognized stock-based compensation expense related to unvested performance-based awards was $203 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of 1.7 years.

See Note 14, Stock-Based Compensation, in the 2017 Form 10-K for more information on performance-based RSUs.

Market Performance-based RSUs.        

Market performance-based RSUs activity for the three months ended March 31, 2018 is summarized below.

 

See Note 14, Stock-Based Compensation, in the 2017 Form 10-K for more information on market performance-based RSUs.

Long-Term Incentive Plans Funded by PNC.    Under a share surrender agreement, PNC committed to provide up to 4 million shares of BlackRock stock, held by PNC, to fund certain BlackRock long-term incentive plans (“LTIP”), including performance-based and market performance-based RSUs. The current share surrender agreement commits PNC to provide BlackRock Series C nonvoting participating preferred stock to fund the remaining committed shares. As of March 31, 2018, 3.9 million shares had been surrendered by PNC, including 103,064 shares during the three months ended March 31, 2018.

At March 31, 2018, the remaining shares committed by PNC of 0.1 million were available to fund certain future long-term incentive awards.

Performance-based Stock Options.

Stock option activity for the three months ended March 31, 2018 is summarized below.

 

At March 31, 2018, total unrecognized stock-based compensation expense related to unvested performance-based stock options was $191 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of 5.7 years. 

See Note 14, Stock-Based Compensation, in the 2017 Form 10-K for more information on performance-based stock options.