ILLUMINA, INC. Stock Compensation Disclosure
Years Ended | |||||||||||
December 31, 2017 | January 1, 2017 | January 3, 2016 | |||||||||
Cost of product revenue | $ | 12 | $ | 9 | $ | 10 | |||||
Cost of service and other revenue | 2 | 2 | 2 | ||||||||
Research and development | 51 | 42 | 42 | ||||||||
Selling, general and administrative | 99 | 76 | 79 | ||||||||
Share-based compensation expense before taxes | 164 | 129 | 133 | ||||||||
Related income tax benefits | (48 | ) | (41 | ) | (39 | ) | |||||
Share-based compensation expense, net of taxes | $ | 116 | $ | 88 | $ | 94 | |||||
Years Ended | |||||||||||
December 31, 2017 | January 1, 2017 | January 3, 2016 | |||||||||
Risk-free interest rate | 0.50% - 1.22% | 0.40% - 0.50% | 0.07% - 0.33% | ||||||||
Expected volatility | 29% - 44% | 40% - 44% | 29% - 38% | ||||||||
Expected term | 0.5 - 1.0 year | 0.5 - 1.0 year | 0.5 - 1.0 year | ||||||||
Expected dividends | 0 | % | 0 | % | 0 | % | |||||
Weighted-average grant-date fair value per share | $ | 46.81 | $ | 48.29 | $ | 53.92 | |||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2017 | Feb 13, 2018 | Showing above |
| 2016 | Mar 2, 2016 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.