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79
4C. Share-based compensation plans
The fair value of the awards at the grant date is calculated using pricing models and recognised over the vesting period of the
grantas aremuneration cost with a corresponding increase in equity. The value of the charge is adjusted to reflect expected and
actual levels of awards vesting, except where the failure to vest is as a result of not meeting a market condition. Cancellations of
equity instruments are treated as an acceleration of the vesting period and any outstanding charge is recognised in the income
statement immediately.
As at 31 December 2011, the Group had share-based compensation plans in the form of performance shares, share options and other
share awards.
The numbers in this note include those for Executive Directors shown in the Directors’ Remuneration Report on pages 50 to 59 and
those for key management personnel shown in note 4A on page 73. Non-Executive Directors do not participate in any of the share-
based compensation plans.
The charge in each of the last three years is shown below, and relates to equity settled plans:
Income statement charge
€ million
2011
€ million
2010
€ million
2009
Performance share plans (93) (120) (166)
Other plans(a) (12) (24) (29)
(105) (144) (195)
(a) The Group also provides a Share Matching Plan (no awards after 2011), an All-Employee Share Option Plan and an Executive Option Plan (no awards after 2005).
Performance Share Plans
Performance share awards are made under the Management Co-Investment Plan (MCIP) and the Global Share Incentive Plan (GSIP).
The MCIP allows Unilever’s managers to invest up to 60% of their annual bonus in shares in Unilever and to receive a corresponding
award of performance-related shares. Under GSIP Unilever’s managers receive annual awards of NV and PLC shares. The awards
ofboth plans will vest after three years between 0% and 200% of grant level, depending on the satisfaction of performance conditions.
The performance conditions of both MCIP and GSIP are underlying sales growth, operating cash flow and underlying operating margin
improvement. There is an additional target based on relative total shareholder return (TSR) for senior executives.
A summary of the status of the Performance Share Plans as at 31 December 2011, 2010 and 2009 and changes during the years ended
on these dates is presented below:
2011
Number of
shares
2010
Number of
shares
2009
Number of
shares
Outstanding at 1 January 17,240,376 17,536,148 16,353,251
Awarded 9,587,934 9,292,689 8,867,844
Vested (6,688,229) (8,626,746) (6,278,634)
Forfeited (1,497,425) (961,715) (1,406,313)
Outstanding at 31 December 18,642,656 17,240,376 17,536,148
2011 2010 2009
Share award value information
Fair value per share award during the year €22.91 €21.49 €13.02
Additional information
At 31 December 2011, there were options outstanding to purchase 24,196,358 (2010: 32,928,940) ordinary shares in NV or PLC in respect
of share-based compensation plans of NV and its subsidiaries and the North American plans, and 10,396,180 (2010: 12,217,128) ordinary
shares in NV or PLC in respect of share-based compensation plans of PLC and its subsidiaries.
Unilever Annual Report and Accounts 2011
Financial statements