ING Direct 2013 Annual Report Download - page 168

Notes to the consolidated annual accounts of ING Group continued
Summary of stock options outstanding and exercisable
2012
Range of exercise price in euros
Options
outstanding as at
31December
2012
Weighted
average
remaining
contractual life
Weighted
average exercise
price
Options
exercisable as at
31December
2012
Weighted
average
remaining
contractual life
Weighted
average exercise
price
0.00 – 5.00 10,586,734 5.49 2.88 10,586,734 5.49 2.88
5.00 – 10.00 21,728,644 5.35 7.92 6,012,612 0.47 9.41
10.00 – 15.00 6,732,540 1.32 14.28 6,732,540 1.32 14.28
15.00 – 20.00 24,938,253 3.58 17.30 24,938,253 3.58 17.30
20.00 – 25.00 9,724,341 3.83 24.57 9,724,341 3.83 24.57
25.00 – 30.00 11,482,665 3.28 25.18 11,482,665 3.28 25.18
85,193,177 69,477,145
Summary of stock options outstanding and exercisable
2011
Range of exercise price in euros
Options
outstanding as at
31December
2011
Weighted
average
remaining
contractual life
Weighted
average exercise
price
Options
exercisable as at
31December
2011
Weighted
average
remaining
contractual life
Weighted
average exercise
price
0.00 – 5.00 14,723,297 6.68 2.88 0.00 0.00
5.00 – 10.00 23,6 47,407 6.45 7.90 5,951,950 1.18 9.46
10.00 – 15.00 7,334,88 0 2.32 14.29 7,334,8 80 2.32 14.29
15.00 – 20.00 28,639,179 4.36 17.20 28,639,179 4.36 17.20
20.00 – 25.00 21,190,454 2.48 23.56 21,190,454 2.48 23.56
25.00 – 30.00 12,603,334 4.30 25.18 12,603,334 4.30 25.18
108,138,551 75,719,797
As at 31 December 2013, the aggregate intrinsic values of options outstanding and exercisable are EUR 82 million (2012: EUR 44 million)
and EUR 82 million (2012: EUR 44 million), respectively.
As at 31 December 2013, total unrecognised compensation costs related to stock options amounted to nil (2012: EUR 3 million;
2011: EUR 24 million). Cash received from stock option exercises for the year ended 31 December 2013 EUR 22 million (2012: EUR 8 million;
2011: EUR 4 million).
The fair value of options granted is recognised as an expense under staff expenses and is allocated over the vesting period of the options.
The fair values of the option awards have been determined using a Monte Carlo simulation. This model takes the risk free interest rate into
account (2.0% to 4.6%), as well as the expected life of the options granted (5 to 9 years), the exercise price, the current share price (EUR
2.90 – EUR 26.05), the expected volatility of the certificates of ING Groep N.V. shares (25% – 84%) and the expected dividend yield
(0.94% to 8.99%). The source for implied volatilities used for the valuation of the stock options is ING’s trading system. The implied
volatilities in this system are determined by ING’s traders and are based on market data implied volatilities not on historical volatilities.
Changes in share awards
Share awards (in numbers) Weighted average grant date fair value (in euros)
2013 2012 2011 2013 2012 2011
Opening balance 49,416,632 48,022,886 35,040,106 7.78 7.90 7.25
Granted 10,957,213 20,446,336 20,290,408 5.80 6.53 9.78
Performance effect 788,196 –1,274,485 –1,610,321 10.25 9.41 11.27
Vested –33,757,098 –15,530,788 –3,636,399 7.61 6.29 10.79
Forfeited –2,344,951 –2, 247,317 –2,060,908 7.80 8.23 7.56
Closing balance 25,059,992 49,416,632 48,022,886 7.23 7.78 7.9 0
As at 31 December 2013 the share awards consists of 21,993,875 share awards (2012: 43,632,814; 2011: 41,150,790) relating to equity-
settled share-based payment arrangements and 3,066,117 share awards (2012: 5,783,818; 2011: 6,872,096) relating to cash-settled
share-based payment arrangements.
The fair value of share awards granted is recognised as an expense under staff expenses and is allocated over the vesting period of the
share awards. The fair values of share awards containing a market based performance condition have been determined using a Monte
Carlo simulation based valuation model. The model takes into account the risk free interest rate, the current stock prices, expected
volatilities and current dividend yields of the performance peer group used to determine ING’s Total Shareholder Return (TSR) ranking.
As at 31 December 2013 total unrecognised compensation costs related to share awards amount to EUR 53 million (2012: EUR 102 million;
2011: EUR 149 million). These costs are expected to be recognised over a weighted average period of 1.5 years (2012: 1.2 years; 2011: 1.5 years).
166 ING Group Annual Report 2013