16. Stock-Based Compensation

Restricted Stock and RSUs.

Restricted stock and restricted stock units (“RSUs”) activity for the six months ended June 30, 2019 is summarized below.

In January 2019, the Company granted 674,206 RSUs or shares of restricted stock to employees as part of 2018 annual incentive compensation that vest ratably over three years from the date of grant and 377,291 RSUs or shares of restricted stock to employees that cliff vest 100% on January 31, 2022. 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 six months ended June 30, 2019 was $482 million.  

At June 30, 2019, the intrinsic value of outstanding RSUs was $1.1 billion, reflecting a closing stock price of $469.30.

At June 30, 2019, total unrecognized stock-based compensation expense related to unvested RSUs was $512 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 six months ended June 30, 2019 is summarized below.

In January 2019, the Company granted 283,014 performance-based RSUs to certain employees that cliff vest 100% on January 31, 2022. 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 2019, the Company granted 2,117 additional 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 six months ended June 30, 2019 was $117 million.

At June 30, 2019, the intrinsic value of outstanding performance-based RSUs was $356 million, reflecting a closing stock price of $469.30.

At June 30, 2019, total unrecognized stock-based compensation expense related to unvested performance-based awards was $161 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period 1.6 years.

See Note 16, Stock-Based Compensation, in the 2018 Form 10-K for more information on 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, including performance-based and market performance-based RSUs. The share surrender agreement commits PNC to provide BlackRock Series C nonvoting participating preferred stock to fund the remaining committed shares. On January 31, 2019, PNC surrendered its remaining 143,458 shares to BlackRock and has completed its share delivery obligation in connection with the agreement.

Performance-based Stock Options.

Stock options outstanding at both June 30, 2019 and December 31, 2018 were 2,106,482 with a weighted average exercise price of $513.50.

At June 30, 2019, total unrecognized stock-based compensation expense related to unvested performance-based stock options was $148 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of 4.4 years. 

See Note 16, Stock-Based Compensation, in the 2018 Form 10-K for more information on performance-based stock options.