BT 2016 Annual Report Download - page 201

207
Overview The Strategic Report Governance Financial statements Additional information
22. 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. Details of these plans and an analysis of the total charge by type of award is set out below.
Year ended 31 March
2016
£m
2015
£m
2014
£m
Employee Saveshare Plans 27 25 25
Executive Share Plans:
Incentive Share Plan (ISP) 21 32 21
Deferred Bonus Plan (DBP) 4 9 11
Other plans 643
58 70 60
Employee Saveshare Plans
Under an HMRC-approved savings-related share option plan, employees save on a monthly basis, over a three or five-year period, towards
the purchase of shares at a fixed price determined when the option is granted. This price is usually set at a 20% discount to the market
price for five-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 (ISP)
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
2015/16, 2014/15 and 2013/14: 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 flow measure, and
20% to growth in underlying revenue excluding transit.
Deferred Bonus Plan (DBP)
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.
Under the terms of the ISP and DBP, dividends or dividend equivalents earned on shares during the conditional periods are reinvested
incompany shares for the potential benefit 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
2016
millions
2015
millions
2014
millions
2016
pence
2015
pence
2014
pence
Outstanding at 1 April 226 459 490 226 102 91
Granted 47 81 40 385 326 257
Forfeited (12) (9) (10) 306 239 158
Exercised (63) (304) (57) 139 65 110
Expired (1) (1) (4) 247 163 78
Outstanding at 31 March 197 226 459 287 226 102
Exercisable at 31 March – – 2 140 74 111
The weighted average share price for all options exercised during 2015/16 was 463p (2014/15: 382p, 2013/14: 356p).
The following table summarises information relating to options outstanding and exercisable under Employee Saveshare plans at 31March
2016.
Normal dates of vesting and exercise (based on calendar years)
Exercise price per
share
Weighted
average
exercise
price
Number of
outstanding
options
millions
Weighted
average
remaining
contractual
life
2016 156p – 280p 204p 31 10 months
2017 168p – 359p 233p 49 22 months
2018 249p – 423p315p 34 34 months
2019 319p – 376p 320p 54 46 months
2020 376p 376p 29 58 months
Total 287p 197 34 months