BP 2008 Annual Report Download - page 173

BP Annual Report and Accounts 2008
Notes on financial statements
41. Share-based payments continued
MTPP- MTPP- EDIP- EDIP-
Shares granted in 2007 TSR FCF TSR LTL RSP DAB PSP
Number of equity instruments granted (million) 9.4 8.5 4.5 0.5 7.7 4.4 14.8
Weighted average fair value $4.73 $10.02 $2.81 $9.92 $11.93 $10.02 $12.37
Fair value measurement basis Monte Market Monte Market Market Market Monte
Carlo value Carlo value value value Carlo
MTPP- MTPP- EDIP- EDIP-
Shares granted in 2006 TSR FCF TSR LTL RSP DAB
Number of equity instruments granted (million) 8.7 7.8 3.3 0.5 0.5 3.5
Weighted average fair value $7.28 $11.23 $4.87 $11.23 $11.07 $11.06
Fair value measurement basis Monte Market Monte Market Market Market
Carlo value Carlo value value value
The group used a Monte Carlo simulation to fair value the TSR element of the 2008, 2007 and 2006 PSP, MTPP and EDIP plans. In accordance with the
rules of the plans the model simulates BP’s TSR and compares it against our principal strategic competitors over the three-year period of the plans. The
model takes into account the historic dividends, share price volatilities and covariances of BP and each comparator company to produce a predicted
distribution of relative share performance. This is applied to the reward criteria to give an expected value of the TSR element.
Accounting expense does not necessarily represent the actual value of share-based payments made to recipients, which are determined by the
remuneration committee according to established criteria.
42. Employee costs and numbers
$ million
Employee costs 2008 2007 2006
Wages and salariesac 10,388 9,808 8,703
Social security costs 805 771 751
Share-based payments 508 428 419
Pension and other post-retirement benefit costs 579 504 770
12,280 11,511 10,643
Number of employees at 31 December 2008 2007 2006
Exploration and Production 21,400 21,800 21,400
Refining and Marketingb c 61,500 67,200 68,000
Other businesses and corporatec9,100 9,100 7,600
92,000 98,100 97,000
By geographical area
UK 15,900 17,000 16,900
Rest of Europe 19,400 19,900 20,200
US 29,300 33,000 33,700
Rest of Worldb27,400 28,200 26,200
92,000 98,100 97,000
2008 2007
Average number of employees Rest of Rest of Rest of Rest of
UK Europe US World Total UK Europe US World Total
Exploration and Production 3,700 700 7,800 9,400 21,600 3,800 700 7,700 9,300 21,500
Refining and Marketing 9,300 18,300 21,600 15,800 65,000 10,300 18,600 23,400 15,000 67,300
Other businesses and corporate 3,400 800 2,600 2,300 9,100 2,600 900 2,500 2,400 8,400
16,400 19,800 32,000 27,500 95,700 16,700 20,200 33,600 26,700 97,200
aIncludes termination payments of $669 million (2007 $422 million and 2006 $257 million). A restructuring was announced in October 2007, the implementation of which continues in 2009.
bIncludes 21,200 (2007 24,500 and 2006 26,100) service station staff.
cA minor amendment has been made to the comparative figures to include some employee costs which had been previously incorrectly excluded and to correct headcount data.
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