Aer Lingus 2013 Annual Report Download - page 135
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133
Impact on income statement
The LTIP expense (net of pre-vesting forfeitures) of €3.2m (2012: €3.3m) is analysed as follows:
The fair value of the shares awarded were determined using a Monte Carlo simulation technique, taking account of peer group total share
return volatilities and correlations, together with the following assumptions as at their grant date:
The 2011 awards will expire no later than 12 months after the end of their performance period, being the end of 2014.
The 2012 awards will expire no later than 12 months after the end of their performance period, being the end of 2015.
The 2013 awards will expire no later than 12 months after the end of their performance period, being the end of 2016.
2013 award
2012 award
2011 award
Average risk free interest rate for peer group
0.99%
1.74%
3.50%
Expected volatility
36.40%
46.20%
58.00%
Dividend yield
4.58%
0.00%
0.00%
Expected volatility was determined by calculating the historical volatility of the Company’s share price, for a historical period
commensurate with the expected life of the awards, ending on their valuation date.
Share options
On 8 September 2009, Mr. Christoph Mueller was granted share options in respect of 1,500,000 shares. The exercise price in respect of the
options over 500,000 shares which became exercisable on 7 September 2012 and are exercisable until 7 September 2019 is €0.573 per share;
the exercise price in respect of the options over 500,000 which became exercisable on 7 September 2013 and are exercisable until 7
September 2019 is €0.677 per share and the exercise price in respect of the options over 500,000 shares which may become exercisable on
or after 7 September 2014 and are exercisable until 7 September 2019 is €0.886.
The share options granted during 2009 are equity settled share-based payments as defined in IFRS 2 Share-based Payments. The accounting
standards require that a recognised valuation methodology be employed to determine the fair value of share options granted and stipulates
that this methodology should be consistent with methodologies used for the pricing of financial instruments. The expense of €66,463 (2012:
€126,600) reported in the income statement within staff costs has been arrived at through applying a binomial lattice option-pricing model.
The weighted average fair value of the share options granted in 2009 at the measurement date was €0.37 per share. The inputs used in the
option pricing model included a share price of €0.58 per share, a dividend yield of 0%, a risk free rate of 4.70% and volatility of 50.63%.
2013
2012
€'000
€'000
2010 Long Term Incentive Plan
Staff costs
-
1,423
2011 Long Term Incentive Plan
Staff costs
982
960
2012 Long Term Incentive Plan
Staff costs
1,158
879
2013 Long Term Incentive Plan
Staff costs
1,018
-
Total
3,158
3,262