BP 2011 Annual Report Download - page 297

Financial statements
BP Annual Report and Form 20-F 2011 PC13
Parent company financial statements of BP p.l.c.
The parent company financial statements of BP p.l.c. on pages PC1 – PC14 do not form part of BP’s Annual Report on Form 20-F as filed with the SEC.
11. Share-based payments continued
Fair values and associated details for restricted share units granted
For restricted share units granted in 2011, the number of units and weighted average fair value at the date of grant were as shown below:
Restricted share units granted in 2011 CPP EPP RSP DAB PSP
Number of restricted share units granted (million) 1.4 8.9 20.0 17.5 19.2
Weighted average fair value $11.99 $7.51 $6.86 $7.51 $7.51
Fair value measurement basis Monte
Carlo
Market
value
Market
value
Market
value
Market
value
Restricted share units granted in 2010 CPP EPP RSP DAB PSP
Number of restricted share units granted (million) 1.3 7.6 21.4 24.5 16.0
Weighted average fair value $19.81 $9.43 $6.78 $9.43 $9.43
Fair value measurement basis Monte
Carlo
Market
value
Market
value
Market
value
Market
value
The group uses the observable market price for ordinary shares at the date of grant to determine the fair value of non-TSR restricted share units.
The group used a Monte Carlo simulation to determine the fair values of the TSR elements of the 2011, 2010 and 2009 CPP and EDIP grants and
the 2009 PSP grant. In accordance with the plans’ rules, the model simulates BP’s TSR and compares it against its principal strategic competitors over the
three-year period of the plans. The model takes into account the historical 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.
Employee Share Ownership Plan Trusts (ESOPs)
ESOPs have been established to acquire BP shares to satisfy any awards made to participants under the BP share plans as required. The ESOPs have
waived their rights to dividends on shares held for future awards and are funded by the group. Until such time as the company’s own shares held by the
ESOPs vest unconditionally to employees, the amount paid for those shares is shown as a reduction in shareholders’ equity (see Note 8). Assets and
liabilities of the ESOPs are recognized as assets and liabilities of the group.
At 31 December 2011 the ESOPs held 27,784,503 shares (2010 11,477,253 shares and 2009 18,062,246 shares) for potential future awards,
which had a market value of $197 million (2010 $82 million and 2009 $174 million).
12. Auditor’s remuneration
Fees payable to the company’s auditors for the audit of the company’s accounts were $15 million (2010 $17 million).
Remuneration receivable by the company’s auditors for the supply of other services to the company is not presented in the parent company
financial statements as this information is provided in the consolidated financial statements.