Share-Based Payments

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

9. Share-Based Payments

Stock Option Activity

Stock option activity is as follows:


	Number of shares (in thousands)	Weighted-average exercise price per stock option		Weighted-average remaining contractual term (in years)	Aggregate intrinsic value (in millions)
Outstanding stock options at December 31, 2022	7,861	$	58.85
Granted	—	—
Exercised	(490)	50.95
Forfeited	(94)	88.40
Expired	(37)	78.63
Outstanding stock options at June 30, 2023	7,240	$	58.90	5.34	$	189
Vested and expected to vest at June 30, 2023	7,188	$	58.70	5.32	$	189
Exercisable at June 30, 2023	6,523	$	55.94	5.09	$	188

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e., the difference between our closing stock price on the last trading day of the period and the exercise price, times the number of shares for options where the closing stock price is greater than the exercise price) that would have been received by the option holders had all option holders exercised their options on that date. This amount changes based on the market value of our stock.

Restricted Stock Units (“RSUs”) Activity

We grant RSUs, which represent the right to receive shares of our common stock. Vesting for RSUs is generally contingent upon the holder’s continued employment with us and may be subject to other conditions (which may include the satisfaction of a performance measure). Also, certain of our performance-based RSUs, including those that are market-based, include a range of shares that may be released at vesting, which are above or below the targeted number of RSUs based on actual performance relative to the performance measure. If the vesting conditions are not met, unvested RSUs will be forfeited. Upon vesting of the RSUs, we may withhold shares otherwise deliverable to satisfy tax withholding requirements.

The following table summarizes our RSU activity with performance-based RSUs, including those with market conditions, presented at 100% of the target level shares that may potentially vest (amounts in thousands, except per share data):


	Number of shares	Weighted- average grant date fair value per RSU
Unvested RSUs at December 31, 2022	13,754	$	74.53
Granted	1,924	78.64
Vested	(3,370)	76.90
Forfeited	(533)	78.40
Unvested RSUs at June 30, 2023	11,775	$	74.36

As of December 31, 2022 and 2021, we had recorded a share-based compensation liability related to compensation payments under our annual performance plans for 2022 and 2021, respectively, which the Company determined to settle certain amounts not yet paid in stock as opposed to cash. During the six months ended June 30, 2023 and 2022, we settled the respective share-based compensation liability by granting 1,188 thousand and 2,777 thousand RSUs, respectively, that vested during the first quarter shortly after grant. The number of shares issued was based on the Company’s closing stock price on the date of grant. The impact of this settlement was recorded in “Additional Paid-In-Capital” in our condensed consolidated statement of changes in shareholders’ equity for the six months ended June 30, 2023 and 2022.

At June 30, 2023, $329 million of total unrecognized compensation cost related to RSUs is expected to be recognized over a weighted-average period of 1.18 years.

Activision Blizzard, Inc. 10-Q