Just group PLC | Annual Report and accounts 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
10 EMPLOYEE BENEFITS Defined contribution pension scheme The Group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable to the fund and amounted
to £4.6m (2021: £4.3m). Employee share plans The Group operates a number of employee share option plans. Details of those plans are as follows: Just Retirement Group plc 2013 Long Term Incentive Plan (“LTIP”)
The Group has made awards under the LTIP to Executive Directors and other senior managers. Awards are made in the form of nil-cost options which become exercisable on the third anniversary of the grant date, subject to the satisfaction of service and performance conditions set out in the Directors’ Remuneration report. Options are exercisable until the tenth anniversary of the grant date. Options granted are subject to a two year holding period after the options have vested. The options are accounted for as equity-settled schemes. The number and weighted-average remaining contractual life of outstanding options under the LTIP are as follows: Year ended 31 December 2022 Number of options Year ended 31 December 2021 Number of options Outstanding at 1 January 22,403,125 19,264,506 Granted 8,563,671 6,795,784 Forfeited (1,149,299) (868,418) Exercised (2,679,669) (1,351,472) Expired (1,202,105) (1,437,275) Outstanding at 31 December 25,935,723 22,403,125 Exercisable at 31 December 4,740,542 3,853,927 Weighted-average share price at exercise (£) 0.81 1.02 Weighted-average remaining contractual life (years) 1.09 1.19 The exercise price for options granted under the LTIP is nil. During the year to 31 December 2022, awards of LTIPs were made on 24 March 2022 and 12 April 2022. 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:
£0.80
Fair value at grant date Option pricing models used Share price at grant date
Black–Scholes, Stochastic, Finnerty
£0.89
Nil
Exercise price
March awards – 53.13%, April awards – 52.96% March awards – 47.14%, April awards – 44.09%
Expected volatility – TSR performance Expected volatility – holding period
3 years + 2 year holding period
Option life Dividends
HUB LTIP awards – 1.69%, Other – Nil
March awards – 1.46%, April awards – 1.62% March awards – 1.45%, April awards – 1.61%
Risk-free interest rate – TSR performance Risk-free interest rate – holding period
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 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. 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.
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