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This excerpt taken from the LLY 10-K filed Feb 22, 2010. Note 8: Stock-Based
Compensation
Stock-based compensation expense in the amount of
$368.5 million, $255.3 million, and
$282.0 million was recognized in 2009, 2008, and 2007,
respectively, as well as related tax benefits of
$128.9 million, $88.6 million, and $96.4 million,
respectively. Our stock-based compensation expense consists
primarily of performance awards (PAs), and shareholder value
awards (SVAs). We recognize the stock-based compensation expense
over the requisite service period of the individual grantees,
which generally equals the vesting period. We provide newly
issued shares and treasury stock to satisfy stock option
exercises and for the issuance of PA and SVA shares. We classify
tax benefits resulting from tax deductions in excess of the
compensation cost recognized for exercised stock options as a
financing cash flow in the consolidated statements of cash flows.
At December 31, 2009, additional stock-based compensation
awards may be granted under the 2002 Lilly Stock Plan for not
more than 84.6 million shares.
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