Marks and Spencer 2016 Annual Report Download - page 109

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ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
OUR BUSINESSOUR PERFORMANCEGOVERNANCEFINANCIAL STATEMENTS
13 SHARE-BASED PAYMENTS CONTINUED
Outstanding options granted under the UK Employees SAYE Scheme are as follows:
Options granted
Number of options
Weighted average remaining
contractual life (years)
Option price2016 2015 2016 2015
January 2012 –1,335,181 –0.3 258p
January 2013 1,917,252 7,499,742 0.2 1.3 312p
January 2014 5,918,608 6,652,869 1.2 2.3 405p
January 2015 12,334,645 14 ,042,731 2.2 3.3 369p
January 2016 9,984,042 –3.2 –432p
30,154,547 29,530,523 2.3 2.4 393p
B. Performance Share Plan*
The Performance Share Plan is the primary long-term incentive plan for approximately 150 of the most senior managers within the Group.
It was fi rst approved by shareholders at the 2005 AGM and re-approved at the 2015 AGM. Under the Plan, annual awards, based on a
percentage of salary, may be o ered. The extent to which an award vests is measured over a three-year period against a balanced scorecard
of fi nancial measures which for 2015/16 included Earnings Per Share (EPS), Return on Capital Employed (ROCE) and Revenue. The value of
any dividends earned on the vested shares during the three years will also be paid on vesting. Further details are set out in the Remuneration
Report on pages 50 to 71. Awards under this scheme have been made in each year since 2005.
During the year, 5,850,134 shares (last year 7,338,609) were awarded under the Plan. The weighted average fair value of the shares awarded
was 533.2p (last year 439.3p). As at 2 April 2016, 15,749,605 shares (last year 18,805,388) were outstanding under the scheme.
C. Deferred Share Bonus Plan*
The Deferred Share Bonus Plan was introduced in 2005/06 as part of the Annual Bonus Scheme for approximately 500 of the most senior
managers within the Group. As part of the scheme, the managers are required to defer a proportion of any bonus paid into shares which
will be held for three years. There are no further performance conditions on these shares, other than continued employment within the
Group and the value of any dividends earned during the deferred period will also be paid on vesting.
During the year, 1,044,961 shares (last year 20,822) have been awarded under the Plan in relation to the annual bonus. The fair value of the
shares awarded was 548.3p (last year 437.0p). As at 2 April 2016, 2,586,096 shares (last year 2,487,477) were outstanding under the scheme.
D. Restricted Share Plan*
The Restricted Share Plan was established in 2000 as part of the reward strategy for retention and recruitment of senior managers who are
vital to the success of the business. The Plan operates for senior managers below executive director level. Awards vest at the end of the
restricted period (typically between one and three years) subject to the participant still being in employment of the Group on the relevant
vesting date. The value of any dividends earned during the restricted period will also be paid at the time of vesting.
During the year, 221,681 shares (last year 1,001,076) have been awarded under the Plan. The weighted average fair value of the shares
awarded was 454.4p (last year 450.5p). As at 2 April 2016, 1,285,666 shares (last year 1,963,139) were outstanding under the scheme.
E . Re pub l ic of Ir el and Save As You E a rn Sc h eme
Sharesave, the Company’s Save As You Earn Scheme was introduced in 2009 to all employees in the Republic of Ireland for a ten-year period,
after approval by shareholders at the 2009 AGM. The scheme is subject to Irish Revenue rules which limit the maximum monthly saving to
€500 per month. The Company chose in 2009 to set a monthly savings cap of €320 per month to align the maximum savings amount to that
allowed within the UK scheme. When the savings contract is started, options are granted to acquire the number of shares that the total
savings will buy when the contract matures, at a discounted price set at the start of the scheme. The price at which the options may be
o ered is 80% of the average mid-market price for three consecutive days preceding the o er date. Options cannot normally be exercised
until a minimum of three years has elapsed.
During the year, 160,113 options (last year 121,086) were granted, at a fair value of 95.6p (last year 90.8p). As at 2 April 2016, 312,826 options
(last year 288,162) were outstanding under the scheme.
F. Marks and Spencer Employee Benefi t Trust
The Marks and Spencer Employee Benefi t Trust (the Trust) holds 4,087,837 (last year 3,912,120) shares with a book value of £20.6m (last year
£19.1m) and a market value of £16.6m (last year £20.7m). These shares were acquired by the Trust in the market and are shown as a reduction
in retained earnings in the consolidated statement of fi nancial position. Awards are granted to employees at the discretion of Marks and
Spencer plc and the Trust agrees to satisfy the awards in accordance with the wishes of Marks and Spencer plc under senior executive share
schemes. Dividends are waived on all of these plans.
G. ShareBuy
In the current year, ShareBuy, the Company's new Share Incentive Plan was launched. This enables participants to buy shares directly from
their gross salary. This scheme does not attract an IFRS 2 charge.
* Nil cost options. For the purposes of calculating the number of shares awarded, the share price used is the average of the mid-market price for the fi ve consecutive dealing days
preceding the grant date.