Marks and Spencer 2015 Annual Report Download - page 111

109
ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
OUR BUSINESSOUR PERFORMANCE
GOVERNANCEFINANCIAL STATEMENTS
13 SHARE-BASED PAYMENTS CONTINUED
Outstanding options granted under the UK Employees SAYE scheme are as follows:
Options granted
Number of options
Weighted average remaining
contractual life (years)
Option price2015 2014 2015 2014
January 2009 – 1,241,356 – 0.3 203p
January 2010 – 497 – –292p
January 2011 – 791,518 – 0.3 319p
January 2012 1,335,181 14,423,919 0.3 1.3 258p
January 2013 7,499,742 8,353,334 1.3 2.3 312p
January 2014 6,652,869 9,613,298 2.3 3.3 405p
January 2015 14,042,731 – 3.3 –369p
29,530,523 34,423,922 2.4 2.0 358p
B. Performance Share Plan*
The Performance Share Plan is the primary long-term incentive plan for approximately 150 of the most senior managers and was fi rst
approved by shareholders at the 2005 AGM. Under the Plan, annual awards, based on a percentage of salary, may be o ered. The extent
to which an award vests is measured over a three-year period against a balanced scorecard of fi nancial measures which currently include
Earnings Per Share (EPS), Return on Capital Employed (ROCE) and Revenue. The value of any dividends earned on the vested shares during
the three years will also be paid on vesting. Further details are set out in the Remuneration Report on pages 66 to 68. Awards under this
scheme have been made in each year since 2005.
During the year, 7,338,609 shares (last year 7,113,690) were awarded under the Plan. The weighted average fair value of the shares awarded
was 439.3p (last year 440.7p). As at 28 March 2015, 18,805,388 shares (last year 21,170,536) were outstanding under the scheme.
As set out on page 66 of this Annual Report, the Company’s existing Performance Share Plan expires in 2015. The Company is therefore
seeking shareholder approval in 2015 for a replacement Plan, the rules and operation of which are substantially the same as the current Plan.
Further details of the replacement Performance Share Plan can be found in the Notice of Meeting 2015.
C. Deferred Share Bonus Plan*
The Deferred Share Bonus Plan was introduced in 2005/06 as part of the Annual Bonus Scheme for approximately 550 of the most senior
managers. As part of the scheme, the managers are required to defer a proportion of any bonus paid into shares which will be held for three
years. There are no further performance conditions on these shares, other than continued employment, and the value of any dividends
earned during the deferred period will also be paid on vesting.
During the year, 20,882 shares (last year 1,658,133) have been awarded under the Plan in relation to the annual bonus. The fair value of the
shares awarded was 437.0p (last year 437.0p). As at 28 March 2015, 2,487,477 shares (last year 5,024,149) were outstanding under the scheme.
D. Restricted Share Plan*
The Restricted Share Plan was established in 2000 as part of the reward strategy for retention and recruitment of senior managers who
are vital to the success of the business. The Plan operates for senior managers below executive director level. Awards vest at the end
of the restricted period (typically between one and three years) subject to the participant still being in employment of the Company on
the relevant vesting date. The value of any dividends earned during the restricted period will also be paid at the time of vesting.
During the year, 1,001,076 shares (last year 798,196) have been awarded under the Plan. The weighted average fair value of the shares
awarded was 450.5p (last year 479.2p). As at 28 March 2015, 1,963,139 shares (last year 2,271,826) were outstanding under the scheme.
E . Republic o f Ireland S ave As Yo u Earn s c h e m e
Sharesave, the Company’s Save As You Earn scheme was introduced in 2009 to all employees in the Republic of Ireland for a ten-year period,
after approval by shareholders at the 2009 AGM. The scheme is subject to Irish Revenue rules which limit the maximum monthly saving
to €500 per month. The Company chose in 2009 to set a monthly savings cap of €320 per month to align the maximum savings amount
allowed within the UK scheme. When the savings contract is started, options are granted to acquire the number of shares that the total
savings will buy when the contract matures, at a discounted price set at the start of the scheme. The price at which the options may be
o ered is 80% of the average mid-market price for three consecutive days preceding the o er date. Options cannot normally be exercised
until a minimum of three years has elapsed.
During the year, 121,086 (last year 62,734) options were granted, at a fair value of 90.8p (last year 105.1p). As at 28 March 2015, 288,162 options
(last year 251,545) were outstanding under the scheme.
F. Marks and Spencer Employee Benefi t Trust
The Marks and Spencer Employee Benefi t Trust (the Trust) holds 3,912,120 (last year 2,595,343) shares with a book value of £19.1m
(last year £8.6m) and a market value of £20.7m (last year £11.8m). These shares were acquired by the Trust in the market and are shown as
a reduction in retained earnings in the consolidated statement of fi nancial position. Awards are granted to employees at the discretion
of Marks and Spencer plc and the Trust agrees to satisfy the awards in accordance with the wishes of Marks and Spencer plc under senior
executive share schemes. Dividends are waived on all of these plans.
* Nil cost options. For the purposes of calculating the number of shares awarded, the share price used is the average of the mid-market price for the fi ve consecutive dealing days
preceding the grant date.