Equity Plans

12 Months Ended

Aug. 31, 2023

Share-Based Payment Arrangement [Abstract]

As of August 31, 2023, 95 million shares of our common stock were available for future awards under our equity plans, including 14 million shares approved for issuance under our employee stock purchase plan (“ESPP”).

Restricted Stock and Restricted Stock Units (“Restricted Stock Awards”)

As of August 31, 2023, there were 29 million shares of Restricted Stock Awards outstanding, 26 million of which contained only service conditions. For service-based Restricted Stock Awards granted through October 2021, restrictions generally lapse in one-fourth or one-third increments during each year of employment after the grant date. For service-based Restricted Stock Awards granted beginning in November 2021, restrictions generally lapse on 25% or 33% of the units granted after the first year and on 6.25% or 8.33% each quarter thereafter over the remaining three or two years of employment. Restrictions generally lapse on Restricted Stock with performance or market conditions as conditions are met over a 3-year period. At the end of the performance period, the number of actual shares to be awarded will vary between 0% and 200% of target amounts, depending upon the achievement level. In 2022, our Board of Directors approved dividend equivalent rights for unvested restricted stock units awarded on or after October 13, 2021.

Restricted Stock Awards activity for 2023 is summarized as follows:


	Number of Shares	Weighted-Average Grant Date Fair Value Per Share

Outstanding as of September 1, 2022	23	$	60.93
Granted	17	55.99
Restrictions lapsed	(9)	58.23
Canceled	(2)	58.00
Outstanding as of August 31, 2023	29	59.11


For the year ended	2023		2022		2021

Restricted stock award shares granted	17		13		11
Weighted-average grant-date fair value per share	$	55.99	$	70.81	$	53.58
Aggregate vesting-date fair value of shares vested	$	514	$	498	$	385

Employee Stock Purchase Plan (“ESPP”)

Our ESPP is offered to substantially all employees and permitted eligible employees to purchase shares of our common stock through payroll deductions of up to 10% of their eligible compensation, subject to certain limitations prior to August 2021. Beginning in August 2021, employees are permitted to deduct up to 15% of their eligible compensation to purchase shares under the ESPP. The purchase price of the shares under the ESPP equals 85% of the lower of the fair market value of our common stock on either the first or last day of each six-month offering period. Compensation expense is calculated as of the beginning of the offering period as the fair value of the employees’ purchase rights utilizing the Black-Scholes option valuation model and is recognized over the offering period. Grant-date fair value and assumptions used in the Black-Scholes option valuation model were as follows:


For the year ended	2023			2022			2021

Weighted-average grant-date fair value per share	$	17.06		$	18.87		$	20.71
Average expected life in years	0.5			0.5			0.5
Weighted-average expected volatility (based on implied volatility)	37		%	43		%	41		%
Weighted-average risk-free interest rate	5.1		%	2.0		%	0.1		%
Expected dividend yield	0.7		%	0.6		%	0.3		%

Under the ESPP, employees purchased 5 million, 4 million, and 3 million shares of common stock in 2023, 2022, and 2021, respectively, at a per share weighted average price of $51.93, $58.52, and $51.42, respectively.

Stock Options

As of August 31, 2023, stock options of 2 million shares were outstanding, all of which were fully exercisable. Stock options expire 8 years from the date of grant. We did not grant any stock options in 2023, 2022, or 2021. Stock options of 1 million shares were exercised in 2023. The total intrinsic value for options exercised was $30 million, $54 million, and $143 million in 2023, 2022, and 2021, respectively.

Stock-based Compensation Expense


For the year ended	2023		2022		2021

Stock-based compensation expense by caption
Research and development	$	226	$	175	$	110
Cost of goods sold	201		193		186
Selling, general, and administrative	137		133		99
Restructure	(7)		(5)		—
	$	557	$	496	$	395

Stock-based compensation expense by type of award
Restricted stock awards	$	488	$	429	$	333
ESPP	69		66		52
Stock options	—		1		10
	$	557	$	496	$	395

Income tax benefits related to the tax deductions for share-based awards are recognized only upon the settlement of the related share-based awards. Income tax benefits for share-based awards were $68 million, $77 million, and $83 million for 2023, 2022, and 2021, respectively. Stock-based compensation expense of $88 million and $48 million was capitalized and remained in inventory as of August 31, 2023 and September 1, 2022, respectively. As of August 31, 2023, $1.26 billion of total unrecognized compensation costs for unvested awards, before the effect of any future forfeitures, was expected to be recognized through the fourth quarter of 2027, resulting in a weighted-average period of 1.3 years.