MARRIOTT VACATIONS WORLDWIDE Corp
For the period ended Dec 31, 2023. Filed Feb 27, 2024.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2023 · Filed Feb 27, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
18. Share-based Compensation
- SHARE-BASED COMPENSATION
We maintain the MVW Equity Plan for the benefit of our officers, directors, and employees. Under the MVW Equity Plan, we are authorized to award: (1) RSUs of our common stock, (2) SARs relating to our common stock, and (3) stock options to purchase our common stock. A total of 1.8 million shares are authorized for issuance pursuant to grants under the MVW Equity Plan. As of December 31, 2023, approximately 1.5 million shares were available for grants under the MVW Equity Plan.
The following table details our share-based compensation expense related to award grants to our officers, directors, and employees:
| ($ in millions) | 2023 | 2022 | 2021 |
|---|---|---|---|
| Service-based RSUs | $29 | $31 | $34 |
| Performance-based RSUs | — | 3 | 9 |
| 29 | 34 | 43 | |
| SARs | 2 | 5 | 8 |
| $31 | $39 | $51 |
The following table details our deferred compensation costs related to unvested awards:
| ($ in millions) | At Year-End 2023(1) | At Year-End 2022 |
|---|---|---|
| Service-based RSUs | $22 | $26 |
| Performance-based RSUs | 1 | 7 |
| 23 | 33 | |
| SARs | 1 | 1 |
| $24 | $34 |
(1)As of December 31, 2023, the weighted average remaining term for RSU grants outstanding at year-end 2023 wasone totwo years and we expect that deferred compensation expense will be recognized over a weighted average period ofone tothree years.
Restricted Stock Units
We have issued RSUs that vest over time, which we refer to as service-based RSUs, and RSUs that vest based on performance with respect to established criteria, which we refer to as performance-based RSUs.
The following table shows the changes in our outstanding RSUs and the associated weighted average grant-date fair values:
| 2023 | ||||||
|---|---|---|---|---|---|---|
| Service-based | Performance-based | Total | ||||
| Number of RSUs | Weighted Average Grant-Date Fair Value Per RSU | Number of RSUs | Weighted Average Grant-Date Fair Value Per RSU | Number of RSUs | Weighted Average Grant-Date Fair Value Per RSU | |
| Outstanding at year-end 2022 | 728,067 | $119.39 | 292,446 | $117.82 | 1,020,513 | $118.94 |
| Granted | 203,575 | $142.15 | 114,602 | $144.73 | 318,177 | $143.08 |
| Distributed | (260,633) | $124.25 | — | $— | (260,633) | $124.25 |
| Forfeited | (15,895) | $144.67 | (214,324) | $104.82 | (230,219) | $107.57 |
| Outstanding at year-end 2023 | 655,114 | $123.91 | 192,724 | $148.29 | 847,838 | $129.45 |
The weighted average grant-date fair value per RSU granted in 2022 and 2021 was $151.86 and $161.42, respectively. The fair value of the RSUs which vested in 2023, 2022, and 2021 was $36 million, $65 million, and $46 million, respectively. The fair value of the RSUs which vested in 2021 included $3 million related to RSUs converted from ILG equity-based RSUs to MVW equity-based RSUs in the ILG Acquisition.
Stock Appreciation Rights
The following table shows the changes in our outstanding SARs and the associated weighted average exercise prices:
| 2023 | ||
|---|---|---|
| Number ofSARs | Weighted Average Exercise Price Per SAR | |
| Outstanding at year-end 2022 | 689,506 | $114.32 |
| Granted | 37,436 | $153.10 |
| Exercised | (4,289) | $52.09 |
| Forfeited or expired | (2,625) | $153.10 |
| Outstanding at year-end 2023(1)(2) | 720,028 | $116.56 |
(1)As of December 31, 2023, outstanding SARs had an aggregate intrinsic value of $3 million and a weighted average remaining term of 5 years.
(2)As of December 31, 2023,540,034 SARs with a weighted average exercise price of $104.13, an aggregate intrinsic value of $3 million and a weighted average remaining contractual term of 4 years were exercisable.
The weighted average grant-date fair value per SAR granted in 2023, 2022, and 2021 was $58.50, $59.68, and $70.66, respectively. The SARS which vested in 2023 did not have any intrinsic value. The intrinsic value of SARs which vested in 2022 and 2021 was $2 million and $5 million, respectively. The aggregate intrinsic value of SARs which were exercised in 2023, 2022, and 2021 was less than $1 million, $1 million, and $14 million, respectively.
We use the Black-Scholes model to estimate the fair value of the SARs granted. The expected stock price volatility was calculated based on the average of the historical and implied volatility of our stock price. The average expected life was calculated using the simplified method, as we have insufficient historical information to provide a basis for estimating average expected life. The risk-free interest rate was calculated based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. The dividend yield assumption listed below is based on the expectation of future payouts.
The following table outlines the assumptions used to estimate the fair value of grants in 2023, 2022, and 2021:
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Expected volatility | 40.47% | 42.86% | 48.35% |
| Dividend yield | 1.87% | 1.53% | 1.48% |
| Risk-free rate | 4.07% | 1.77% | 0.97% |
| Expected term (in years) | 6.25 | 6.25 | 6.25 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.