Experian 2008 Annual Report Download - page 128

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126 Experian Annual Report 2008
35. Share-based payment arrangements (continued)
(b) Share awards
(i) Summary of arrangements
Experian share award plans
The following arrangements include awards made at and after demerger together with awards rolled over from former
GUS plans:
Experian Free Shares
Plan and the Experian
Experian Co-Investment Experian Reinvestment Experian Performance Share UK Approved
Arrangements Plan Plan Plan All-Employee Plan
Nature of arrangement Grant of shares1 Grant of shares 1 Grant of shares Grant of shares
Vesting conditions:
– Service period 4 years 3 to 5 years 5 years 3 years
– Performance 100% – Benchmark profit 50% – Benchmark profit 50% – Benchmark profit n/a
performance of Group performance of Group performance of Group
assessed against assessed against assessed against
specified targets 2 specified targets 3 specified targets 3
50% – n/a 50% – Distribution
percentage determined
by ranking
‘Total Shareholder Return’
relative to a comparator
group 4
Expected outcome of
meeting performance
criteria (at grant date) Benchmark profit – 100% Benchmark profit – 80% Benchmark profit – 79% n/a
Unconditional – 100% TSR – 52.3% – Oct 2006 Grant
TSR – 57.4% – Jun 2007 Grant
TSR – 29.6% – Nov 2007 Grant
Maximum term 4 years 5 years 5 years 3.5 years
Method of settlement Share distribution Share distribution Share distribution Share distribution
Expected departures
(at grant date) 5% 5% 5% 15%
1. The grant date is the start of the financial year in which performance is assessed. This is before the quantity of the shares award is determined but the
underlying value of the award is known at the grant date, subject to the outcome of the performance condition. The value of awarded shares reflects the
performance outcome at the date of their issue to participants. These shares are a nil consideration option but have been classified as an award of shares
because of their nature.
2. The Benchmark profit performance condition for the Experian Co-investment Plan requires Benchmark profit before tax growth to exceed 6% over a 3 year
period. The period of assessment commences at the beginning of the financial year of grant. This is not a ‘market-based’ performance condition as defined
by IFRS 2.
3. The Benchmark profit performance condition for the Experian Reinvestment Plan and Experian Performance Share Plan requires Benchmark profit before
tax growth at least to exceed 7% over a 3 year period with the condition fully satisfied if Benchmark profit before tax growth is 14%. The period of assessment
commences at the beginning of the financial year of grant. This is not a ‘market-based’ performance condition as defined by IFRS 2. The condition is applied to
half of the awarded shares.
4. The Experian Performance Share Plan ‘Total Shareholder Return’ is considered a ‘market-based’ performance condition as defined by IFRS 2. It has been
valued using a Monte Carlo simulation with historic volatilities and correlations for comparator companies measured over the 3 year period preceding
valuation and an implied volatility for Experian Group Limited. The condition is applied to half of the awarded shares.
Notes to the Group financial statements continued