Carphone Warehouse 2006 Annual Report Download - page 50

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Notes to the Financial Statements continued
5 Employee costs
The average monthly number of employees (including Executive Directors) was:
2006 2005
Number Number
Administration 2,501 1,953
Distribution and sales 12,762 10,305
15,263 12,258
Their aggregate remuneration (including Executive Directors) comprised:
2006 2005
£’000 £’000
Wages and salaries 338,833 249,134
Social security costs 51,343 38,735
Other pension costs 2,847 1,906
393,023 289,775
Share-based payments (see note 6) 10,665 3,608
403,688 293,383
In addition to the costs recognised in the income statement, employee costs of £22.2m were capitalised in the period in relation to internally generated software
(2005 – £13.2m).
A further £1.5m of employee costs were incurred in the period and offset against the reorganisation provision arising from the Onetel acquisition (see note 4).
Compensation earned by key management, comprising the Executive Directors and other employees who serve on the Executive Committee, was as follows:
2006 2005
£’000 £’000
Salaries and fees 3,219 2,741
Performance bonuses 3,632 4,736
Benefits 182 111
Pension costs 181 72
Share-based payments 2,313 591
9,527 8,251
Details of Directors’ remuneration are provided in the Remuneration Report on pages 26 to 32.
At 1 April 2006 loans of £1.1m (2005 – £1.0m) were outstanding from certain Group executives, none of whom was a Director of the Company.
6 Share-based payments
The Group issues equity settled share-based payments to certain employees, through the following schemes:
a) Performance Share Plan:
During the period the Group made awards of nil cost options under a Performance Share Plan. These awards are subject to a mixture of Headline earnings per
share (see note 11) and Total Shareholder Return (TSR) performance targets measured over a three or four year performance period. Details of the performance
targets are provided in the Remuneration Report on pages 26 to 32. If the options remain unexercised after a period of ten years from the date of grant, the
options expire. Furthermore, options are forfeited if the employee leaves the Group before the options vest.
The following table illustrates the number and weighted average exercise prices (WAEP) of share options for the scheme:
2006 2005
Number WAEP Number WAEP
000’s £ 000’s £
Outstanding at the beginning of the period 27,870 – ––
Granted during the period 2,955 – 27,870 –
Forfeited during the period (1,392) – ––
Outstanding at the end of the period 29,433 – 27,870 –
Exercisable at the end of the period ––––
The options outstanding at 1 April 2006 had a weighted average remaining contractual life of 8.9 years (2005 – 9.8 years).
The Carphone Warehouse Group PLC Annual Report 2006
46