Share-Based Compensation
The Company’s outstanding share-based awards consist mainly of non-qualified stock options and restricted shares. As of December 31, 2025, the Company had 39 million shares available for future grants of share-based awards under the 2020 Stock Incentive Plan. As of December 31, 2025, there were 15 million shares of common stock available for issuance under the ESPP.
Stock Options
Stock option activity for the year ended December 31, 2025 is summarized in the table below:
SharesWeighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual Life
Aggregate
Intrinsic Value
 (in millions) (in years)(in millions)
Outstanding at beginning of period17 $370 
Granted389 
Exercised(3)215 
Forfeited(1)491 
Outstanding at end of period18 391 5.6$546 
Exercisable at end of period11 336 4.0505 
Vested and expected to vest, end of period18 390 5.5542 
Restricted Shares
Restricted share activity for the year ended December 31, 2025 is summarized in the table below:
(shares in millions)SharesWeighted-Average
Grant Date
Fair Value
per Share
Nonvested at beginning of period$489 
Granted421 
Vested(2)503 
Nonvested at end of period441 
Other Share-Based Compensation Data
(in millions, except per share amounts)For the Years Ended December 31,
202520242023
Stock Options
Weighted-average grant date fair value of shares granted, per share$110 $138 $134 
Total intrinsic value of stock options exercised616 1,886 1,325 
Restricted Shares
Weighted-average grant date fair value of shares granted, per share421 523 493 
Total fair value of restricted shares vested553 690 803 
Employee Stock Purchase Plan
Number of shares purchased
Share-Based Compensation Items
Share-based compensation expense, before tax$971 $1,018 $1,059 
Share-based compensation expense, net of tax effects865 896 937 
Income tax benefit realized from share-based award exercises130 216 231 
(in millions, except years)December 31, 2025
Unrecognized compensation expense related to share awards$1,333 
Weighted-average years to recognize compensation expense1.3
Share-Based Compensation Recognition and Estimates
The principal assumptions the Company used in calculating grant-date fair value for stock options were as follows:
For the Years Ended December 31,
 202520242023
Risk-free interest rate
3.7% - 4.3%
3.6% - 4.4%
3.8% - 4.6%
Expected volatility
25.1% - 33.5%
25.5% - 30.7%
29.7% - 30.6%
Expected dividend yield
1.7% - 3.5%
1.4% - 1.5%
1.3% - 1.5%
Forfeiture rate5.0%5.0%5.0%
Expected life in years4.84.64.6
Risk-free interest rates are based on U.S. Treasury yields in effect at the time of grant. Expected volatilities are based on the historical volatility of the Company’s common stock and the implied volatility from exchange-traded options on the Company’s common stock. Expected dividend yields are based on the per share cash dividend paid by the Company. The Company uses historical data to estimate option exercises and forfeitures within the valuation model. The expected lives of options granted represent the periods of time the awards granted are expected to be outstanding based on historical exercise patterns.
Other Employee Benefit Plans
The Company offers various defined contribution retirement savings plans for its domestic employees. Compensation expense related to these plans was $850 million, $853 million and $804 million for the years ended December 31, 2025, 2024 and 2023, respectively.
In addition, the Company maintains non-qualified, deferred compensation plans, which allow certain members of senior management and executives to defer portions of their salary or bonus. The deferrals are recorded within long-term investments with an approximately equal amount in other liabilities in the Consolidated Balance Sheets. The total deferrals are distributable based upon termination of employment or other periods, as elected under each plan and were $2.2 billion and $2.1 billion as of December 31, 2025 and 2024, respectively.

Historical Timeline

Fiscal YearFiled
2025Mar 2, 2026Showing above
2024Feb 27, 2025
2023Feb 28, 2024
2022Feb 24, 2023
2021Feb 15, 2022
2020Mar 1, 2021
2019Feb 14, 2020
2018Feb 12, 2019
2017Feb 13, 2018
2016Feb 8, 2017
2015Feb 9, 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.