JUST GROUP PLC Annual Report and Accounts 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
10 EMPLOYEE BENEFITS continued During the year to 31 December 2021, awards of LTIPs were made on 24 March 2021 and 17 September 2021. The weighted-average fair value and assumptions used to determine the fair value of the LTIPs and the buy-out options granted during the year are as follows:
£0.85
Fair value at grant date Option pricing models used Share price at grant date
Black-Scholes, Stochastic, Finnerty
£0.94
Nil
Exercise price
60.80% 61.54%
Expected volatility – TSR performance Expected volatility – holding period
3 years + 2 year holding period
Option life Dividends
Nil
0.15% 0.34%
Risk-free interest rate – TSR performance Risk-free interest rate – holding period
A Black-Scholes option pricing model is used where vesting is related to an earnings per share target or a solvency capital generation target, a Stochastic model is used where vesting is related to a total shareholder return target, and a Finnerty model is used to model the holding period. For awards subject to a TSR performance condition, expected volatility has been calculated using historic volatility of the Company and each company in the TSR comparator group, where available, over the period of time commensurate with the remainder of the performance period immediately prior to the date of grant. For awards with a holding period condition, expected volatility has been calculated using historic volatility of the Company over the period of time commensurate with the holding period immediately prior to the date of grant. Volatility of the market in 2020 due to COVID-19 has been considered and it has been concluded that the Company’s share price was not materially affected and no adjustment has been made. Deferred share bonus plan (“DSBP”) The DSBP is operated in conjunction with the Group’s short-term incentive plan for Executive Directors and other senior managers of the Company or any of its subsidiaries, as explained in the Directors’ Remuneration Report. Awards are made in the form of nil-cost options which become exercisable on the third anniversary, and until the tenth anniversary, of the grant date.
The options are accounted for as equity-settled schemes.
The number and weighted-average remaining contractual life of outstanding options under the DSBP are as follows:
Year ended 31 December 2021 Number of options
Year ended 31 December 2020 Number of options
5,094,921 4,287,693 1,432,610 1,882,472
Outstanding at 1 January
Granted Forfeited Exercised
–
(15,004)
(739,528) (1,060,240) 5,788,003 5,094,921 1,683,566 1,716,596
Outstanding at 31 December Exercisable at 31 December
0.93 0.93
Weighted-average share price at exercise (£) Weighted-average remaining contractual life (years)
0.54 1.10
The exercise price for options granted under the DSBP is nil.
During the year to 31 December 2021, awards of DSBPs were made on 24 March 2021. The weighted-average fair value and assumptions used to determine the fair value of options granted during the year under the DSBP are as follows:
£0.94
Fair value at grant date Option pricing model used Share price at grant date
Black-Scholes
£0.94
Nil Nil
Exercise price
Expected volatility
3 years
Option life Dividends
Nil Nil
Risk-free interest rate
142
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