205 / 330
2016 REGISTRATION DOCUMENT
HERMÈS INTERNATIONAL
205
CONSOLIDATED FINANCIAL STATEMENTS
5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 30
SHARE-BASED PAYMENTS
The expense recognised in2016 in respect of free share allocation plans
totalled €60.6 million, compared with €36.4 million at end-2015.
30.1
New plans
In accordance with the authorisation granted by the Combined General
Meeting of 31 May 2016 in its 15th resolution, the Management Board
decided the same day to grant free shares as described below.
1)
Democratic plan bearing on an overall grant of 452,960 conditional
rights to receive free shares to 11,324 employees of the Group.
This grant was structured into two tranches, each bearing on 50% of the
rights granted, with vesting periods of four and five years respectively.
The vesting of the shares of each tranche is subject to a condition of
presence – the beneficiary must be present in the Group’s workforce at
the end of the vesting period.
The main features of the grant and the assumptions used to calculate
the IFRS expense of the democratic plan are as follows:
s
share price at grant date: €324.7 (weighted average price);
s
dividend yield of 1.15% per annum;
s
fair value of a share: €306.6 to €310.1;
s
average turnover rate over the vesting period: 11.5% to 14.1% for
French residents and 28.4% to 34.1% for foreign residents.
The IFRS expense (excluding tax paid by the employer) in 2016 in respect
of issuance made under the plan amounted to €14.8 million.
2)
Selective plan bearing on an overall grant of 353,100 conditional
rights to receive free shares to certain executives of the Group. The
vesting period of the rights granted under this plan is four years.
The transfer of ownership of the shares is subject to a condition of pre-
sence – the beneficiary must be present in the Group’s workforce at
the end of the vesting period. Furthermore, 50% of rights granted are
also subject to performance conditions (based on the results of the
Group in 2016 and 2017). For the purposes of determining the amount
recorded in the first half 2016, the performance conditions were dee-
med to have been satisfied in 2016 and 2017.
The main features of the grant and the assumptions used to calculate
the IFRS expense of the selective plan are as follows:
s
share price at grant date: €324.7 (weighted average);
s
dividend yield of 1.15% per annum;
s
fair value of a share: €310.1;
s
average turnover rate over the vesting period: 3.9%.
The IFRS expense (excluding tax paid by the employer) in 2016 in respect
of issuance made under the plan amounted to €15.3 million.
30.2
Reconciliation free shares outstanding
In shares
2016
2015
Outstanding as at 1 January
826,950
868,640
s
o/w exercisable
-
-
Issued
806,060
-
Exercised
(416,480)
(1,610)
Cancelled
-
-
Forfeited
(28,370)
(40,080)
Outstanding as at 31 December
1,188,160
826,950
s
o/w exercisable
-
-
The information relative to the bonus share allocation plans is provided on page 146 (Table 11).