Vodafone 2016 Annual Report Download - page 147

Overview Strategy review Performance Governance Financials Additional information
Vodafone Group Plc
Annual Report 2016
145
27. Share-based payments
We have a number of share plans used to award shares to Directors and employees as part of their remuneration
package. A charge is recognised over the vesting period in the consolidated income statement to record the cost
of these, based on the fair value of the award on the grant date.
Accounting policies
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value
(excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of the shares that will eventually
vest and adjusted for the effect of non-market-based vesting conditions. A corresponding increase in retained earnings is also recognised.
Some share awards have an attached market condition, based on total shareholder return (‘TSR’), which is taken into account when calculating
thefair value of the share awards. The valuation for the TSR is based on Vodafone’s ranking within the same group of companies, where possible,
over the past ve years.
The fair value of awards of non-vested shares is equal to the closing price of the Group’s shares on the date of grant, adjusted for the present value
of the delay in receiving dividends where appropriate.
The maximum aggregate number of ordinary shares which may be issued in respect of share options or share plans will not (without shareholder
approval) exceed:
a 10% of the ordinary share capital of the Company in issue immediately prior to the date of grant, when aggregated with the total number
of ordinary shares which have been allocated in the preceding ten year period under all plans; and
a 5% of the ordinary share capital of the Company in issue immediately prior to the date of grant, when aggregated with the total number
of ordinary shares which have been allocated in the preceding ten year period under all plans, other than any plans which are operated
on an all-employee basis.
Share options
Vodafone Group executive plans
No share options have been granted to any Directors or employees under the Company’s discretionary share option plans in the year ended
31 March 2016.
There are options outstanding under the Vodafone Group 1999 Long-Term Stock Incentive Plan and the Vodafone Global Incentive Plan.
These options are normally exercisable between three and ten years from the date of grant. The vesting of some of these options was subject
to satisfaction of performance conditions. Grants made to US employees are made in respect of American Depositary Shares (‘ADS’).
Vodafone Group Sharesave Plan
The Vodafone Group 2008 Sharesave Plan enables UK staff to acquire shares in the Company through monthly savings of up to £250 over a three
and/or ve year period, at the end of which they may also receive a tax free bonus. The savings and bonus may then be used to purchase shares
at the option price, which is set at the beginning of the invitation period and usually at a discount of 20% to the then prevailing market price of the
Company’s shares.
Share plans
Vodafone Group executive plans
Under the Vodafone Global Incentive Plan awards of shares are granted to Directors and certain employees. The release of these shares
is conditional upon continued employment and, for some awards, achievement of certain performance targets measured over a three year period.
Vodafone Share Incentive Plan
The Vodafone Share Incentive Plan enables UK staff to acquire shares in the Company through monthly purchases of up to £125 per month or 5%
of salary, whichever is lower. For each share purchased by the employee, the Company provides a free matching share.