Experian 2012 Annual Report Download - page 134

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132 Experian Annual Report 2012 Financial statements
Notes to the Group financial statements continued
33. Share-based payments (continued)
(b) Share awards
(i) Summary of arrangements
Experian Co-Investment Plan Experian Performance Share Plan
(conditional awards)
Experian Performance Share Plan
(unconditional awards)
Nature of arrangement Grant of shares Grant of shares Grant of shares
Vesting conditions:
– Service period 3 years 3 years 3 years
– Performance 50% – Benchmark profit
performance of Group assessed
against specified targets
50% or 75% – Benchmark profit
performance of Group assessed
against specified targets
n/a
50% – Cumulative operating
cash flow
50% or 25% – Distribution
percentage determined by ranking
Total Shareholder Return (‘TSR’)
relative to a comparator group
Expected outcome of meeting
performance criteria (at grant date)
Benchmark profit - 100%
Cumulative operating
cash flow – 100%
Benchmark profit – 91%
TSR – Range from 30% to 61%
n/a
Maximum term 3 years 3 years 3 years
Expected departures (at grant date) 5% 5% 15%
(ii) Performance conditions and other details
Experian Co-Investment Plan
The grant date for the Experian Co-Investment Plan is the start of the financial year in which performance is assessed. This is before the number
of shares to be awarded is determined but the underlying value of the award is known, subject to the outcome of the performance condition.
The value of awarded shares reflects the performance outcome at the date of their issue to participants and is recognised over a four-year
period. The method of settlement for this plan is share distribution.
The Benchmark profit performance condition (the ‘profit condition’) for this plan required Benchmark PBT growth to exceed 3% per annum
over a three-year period for the award made in the year ended 31 March 2010. Thereafter the profit condition only attaches to 50% of the award
with the performance condition for the balance based on cumulative operating cash flow over a three-year period (the ‘cash flow condition’).
The range of conditions for the awards are set out below.
Profit condition Cash flow condition
Year of award Target Maximum Target Maximum
Year ended 31 March 2012 7% per annum 14% per annum US$3,000m US$3,400m
Year ended 31 March 2011 5% per annum 11% per annum US$2,900m US$3,300m
The period of assessment commences at the beginning of the financial year of grant. These are not ‘market-based’ performance conditions as
defined by IFRS 2.
Experian Performance Share Plan
The range of Benchmark profit performance conditions for awards under this plan are set out below and require Benchmark PBT growth at the
stated percentages over a three-year period. Further unconditional awards have been made under this plan since 1 April 2010.
Profit condition
Year of award Target Maximum
Year ended 31 March 2012 7% per annum 14% per annum
Year ended 31 March 2011 5% per annum 11% per annum
Year ended 31 March 2010 4% per annum 8% per annum
The Experian Performance Share Plan TSR condition is considered a ‘market-based’ performance condition as defined by IFRS 2. In valuing the
awarded shares, TSR is evaluated using a Monte Carlo simulation with historic volatilities and correlations for comparator companies measured
over the three-year period preceding valuation and an implied volatility for Experian plc shares.
The method of settlement for all awards under this plan is share distribution.