172 | Just Group PLC | Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
13. EMPLOYEE BENEFITS continued During the year to 31 December 2023, awards of LTIPs were made on 23 March 2023, 30 March 2023 and 14 September 2023. 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:
Fair value at grant date Option pricing models used Share price at grant date
£0.77
Black–Scholes, Stochastic, Finnerty
£0.84
Exercise price
Nil
Expected volatility – TSR performance Expected volatility – Other performance Expected volatility – holding period
41.34%
44.36 – 44.43% 37.52% – 37.60%
Option life
3 years + 2 year holding period HUB LTIP awards – 2.05%, Other – Nil
Dividend yield
Risk-free interest rate – TSR performance Risk-free interest rate – holding period
3.44%
3.25% – 3.41%
A Stochastic model is used where vesting is related to a total shareholder return target, a Black-Scholes option pricing model is used for all other performance vesting targets, and a Finnerty model is used to model the holding period. For awards subject to a market performance condition, such as Total Shareholder Return (“TSR”), expected volatility has been calculated using historic volatility of the Company, and for each company in the TSR comparator group, over the period of time commensurate with the remainder of the performance period immediately prior to the date of grant. For awards not subject to a market performance condition, expected volatility has been calculated using historic volatility of the Company over the period of time commensurate with the expected award term immediately prior to the date of the 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. 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
Year ended 31 December 2022 Number of options
31 December 2023 Number of options
5,998,639 1,278,872 (273,206) (1,603,924) 5,400,381 1,661,999
Outstanding at 1 January
5,788,003 1,313,916
Granted Forfeited Exercised
–
(1,103,280) 5,998,639 1,652,826
Outstanding at 31 December Exercisable at 31 December
0.83 0.85
Weighted-average share price at exercise (£) Weighted-average remaining contractual life (years)
0.83 0.84
The exercise price for options granted under the DSBP is nil (2022: nil).
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