Barclays 2014 Annual Report Download - page 323

barclays.com/annualreport Barclays PLC Annual Report 2014 I 321
Notes to the financial statements
34 Share based payments
Accounting for share based payments
The Group applies IFRS 2 Share Based Payments in accounting for employee remuneration in the form of shares.
Employee incentives include awards in the form of shares and share options, as well as offering employees the opportunity to purchase shares
on favourable terms. The cost of the employee services received in respect of the shares or share options granted is recognised in the income
statement over the period that employees provide services, generally the period between the date the award is granted or notified and the
vesting date of the shares or options. The overall cost of the award is calculated using the number of shares and options expected to vest and
the fair value of the shares or options at the date of grant.
The number of shares and options expected to vest takes into account the likelihood that performance and service conditions included in the
terms of the awards will be met. Failure to meet the non-vesting condition is treated as a cancellation, resulting in an acceleration of
recognition of the cost of the employee services.
The fair value of shares is the market price ruling on the grant date, in some cases adjusted to reflect restrictions on transferability. The fair
value of options granted is determined using option pricing models to estimate the numbers of shares likely to vest. These take into account
the exercise price of the option, the current share price, the risk-free interest rate, the expected volatility of the share price over the life of the
option and other relevant factors. Market conditions that must be met in order for the award to vest are also reflected in the fair value of the
award, as are any other non-vesting conditions – such as continuing to make payments into a share based savings scheme.
The charge for the year arising from share based payment schemes was as follows:
Charge for the year
2014
£m
2013
£m
2012
£m
Share Value Plan 575 576 610
Others 84 126 173
Total equity settled 659 702 783
Cash settled 43 25 35
Total share based payments 702 727 818
The terms of the main current plans are as follows:
Share Value Plan (SVP)
The SVP was introduced in March 2010 and approved by shareholders (for Executive Director participation and use of new issue shares) at the
AGM in April 2011. SVP awards are granted to participants in the form of a conditional right to receive Barclays PLC shares or provisional
allocations of Barclays PLC shares which vest or are considered for release over a period of three years in equal annual tranches. Participants do
not pay to receive an award or to receive a release of shares. The grantor may also make a dividend equivalent payment to participants on release
of a SVP award. SVP awards are also made to eligible employees for recruitment purposes. All awards are subject to potential forfeiture in certain
leaver scenarios.
Other schemes
In addition to the SVP, the Group operates a number of other schemes including schemes operated by and settled in the shares of subsidiary
undertakings, none of which are individually or in aggregate material in relation to the charge for the year or the dilutive effect of outstanding
share options. Included within other schemes are Sharesave (both UK and overseas), the Barclays Long Term Incentive Plan and the Executive
Share Award Scheme.
Employee benefits
The notes included in this section focus on the costs and commitments associated with employing our staff.
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