Yahoo 2015 Annual Report Download - page 147

for which performance goals had not been set during the period); excludes tranches of
previously granted performance-based restricted stock units for which performance goals were
set during the year ended December 31, 2015.
As of December 31, 2015, there was $685 million of unamortized stock-based compensation expense
related to unvested restricted stock and restricted stock units, which is expected to be recognized
over a weighted average period of 2.3 years.
The total fair value of restricted stock awards vested during the years ended December 31, 2013,
2014, and 2015 was $220 million, $415 million, and $502 million, respectively.
During the year ended December 31, 2015, 17 million shares that were subject to previously granted
restricted stock units vested. These vested restricted stock awards were net share settled. The
Company withheld 7 million shares based upon the Company’s closing stock price on the vesting
date, to satisfy the Company’s tax withholding obligation relating to the employees’ minimum
statutory obligation for the applicable income and other employment taxes. The Company then
remitted cash to the appropriate taxing authorities.
Total payments for the employees’ tax obligations to the relevant taxing authorities were $258 million
for the year ended December 31, 2015 and are reflected as a financing activity within the consolidated
statements of cash flows. The payments were used for tax withholdings related to the net share
settlements of restricted stock units. The payments had the effect of share repurchases by the
Company as they reduced the number of shares that would have otherwise been issued on the
vesting date and were recorded as a reduction of additional paid-in capital.
In 2013, 2014, and 2015, $64 million, $150 million, and $58 million, respectively, of excess tax benefits
from stock-based awards for options exercised and restricted stock awards that vested in current
and prior periods were included as a source of cash flows from financing activities. These excess tax
benefits represent the reduction in income taxes otherwise payable during the period, attributable to
the actual gross tax benefits in excess of the expected tax benefits for options exercised and
restricted stock awards that vested in current and prior periods. The Company has accumulated
excess tax deductions relating to stock options exercised and restricted stock awards that vested
prior to January 1, 2006 available to reduce income taxes otherwise payable. To the extent such
deductions reduce income taxes payable in the current year, they are reported as financing activities
in the consolidated statements of cash flows.
Performance-Based Executive Incentive Equity Awards
CEO 2012 Annual Equity Awards.Marissa A. Mayer, the Company’s Chief Executive Officer, received
an equity award for 2012 that vested over three years. A total of $6 million of the grant date fair value
of this equity award was granted as restricted stock units on July 26, 2012 and vested over three
years. The remaining portion of this equity award (valued at $6 million per Ms. Mayer’s offer letter
from the Company) was granted in November 2012 as a performance-based stock option that vested
over the two and a half years after July 26, 2012, subject to satisfaction of performance criteria. See
below for additional discussion of the performance-based stock options.
After 2012, Ms. Mayer is eligible to receive annual equity grants when such grants are made to senior
executives. Subject to the discretion of the Compensation and Leadership Development Committee
of the Board of Directors (the “Compensation Committee”), the Company contemplates that the
target value of such awards will not be less than the target value of her 2012 annual grant.
CEO One-Time Retention Award. Ms. Mayer received a one-time retention equity award that vests
over five years. A total of $15 million of the grant date fair value of this equity award was granted as
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