BT 2014 Annual Report Download - page 164

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161
Financial statements
Financial statements
21. Share-based payments
Overview
The company has savings-related share option plans for its employees and those of participating subsidiaries, further share option plans for selected
employees and a stock purchase plan for employees in the US. It also has several share plans for executives. All share-based payment plans are equity
settled and details of these plans and an analysis of the total charge by type of award is set out below.
Year ended 31 March
2014
£m
2013
£m
2012
£m
Employee Saveshare Plans 25 25 25
Executive Share Plans
Incentive Share Plan (ISP) 21 27 43
Deferred Bonus Plan (DBP) 11 10 8
Other plans 3 2 (1)
60 64 75
Employee Saveshare Plans
Under an HMRC approved savings-related share option plan employees save on a monthly basis, over a three or ve-year period, towards the
purchase of shares at a xed price determined when the option is granted. This price is usually set at a 20% discount to the market price for ve-
year plans and 10% for three-year plans. The options must be exercised within six months of maturity of the savings contract, otherwise they lapse.
Similar plans operate for BT’s overseas employees.
Incentive Share Plan
Under the ISP, participants are only entitled to these shares in full at the end of a three-year period if the company has met the relevant pre-
determined corporate performance measures and if the participants are still employed by the group. For ISP awards granted in 2013/14, 2012/13
and 2011/12 40% of each award is linked to a total shareholder return (TSR) target for a comparator group of companies from the beginning of the
relevant performance period 40% is linked to a three-year cumulative free cash ow measure, and 20% to growth in underlying revenue excluding
transit.
Deferred Bonus Plan
Under the DBP, awards are granted annually to selected employees of the group. Shares in the company are transferred to participants at the end of
three years if they continue to be employed by the group throughout that period.
In accordance with the terms of the ISP and DBP, dividends or dividend equivalents earned on shares during the conditional periods are reinvested
incompany shares for the potential benet of the participants.
Employee Saveshare Plans
Movements in Employee Saveshare options are shown below.
Movement in the number of share options Weighted average exercise price
Year ended 31 March
2014
millions
2013
millions
2012
millions
2014
pence
2013
pence
2012
pence
Outstanding at 1 April 490 561 567 91 79 77
Granted 40 66 33 257 176 161
Forfeited (10) (10) (17) 158 120 97
Exercised (57) (119) (12) 110 69 132
Expired (4) (8) (10) 78 188 140
Outstanding at 31 March 459 490 561 102 91 79
Exercisable at 31 March 2 – 1 111 –128
The weighted average share price for all options exercised during 2013/14 was 356p (2012/13 221p, 2011/12 203p).