Some Group employees receive compensation in the form of share-based payments, for which payment is made in equity instruments.
The services compensated by these plans are recognized as an expense, with the offset recognized in shareholders’ equity, over the vesting period. The amount of expense recognized in each period is determined by reference to the fair value of the equity instruments granted, as of the grant date.
The fair value of restricted shares is estimated at the date of grant based on the share price at that date after deductions for dividends on the shares that will not be paid to beneficiaries during the vesting period. The fair value of restricted shares subject to a performance condition based on Total Shareholder Return is estimated using a binomial model that takes into account the vesting conditions.
Each year, Sodexo reassesses the number of shares that is likely to be delivered to beneficiaries of restricted shares based on the applicable vesting conditions. The impact of any change in estimates is recognized in the income statement, with the offset recognized in shareholders’ equity.
Rules governing restricted share plans are as follows:
The performance criteria applied are directly linked to the Group's strategic priorities and are intended to measure performance in a global manner:
The table below shows movements in free shares in Fiscal 2022 and Fiscal 2021:
| FISCAL 2022 | FISCAL 2021 | |
|---|---|---|
| Outstanding at the beginning of the year | Outstanding at the beginning of the year FISCAL 2022 2,315,627 |
Outstanding at the beginning of the year FISCAL 2021 2,447,754 |
| Granted during the year | Granted during the year FISCAL 2022 834,629 |
Granted during the year FISCAL 2021 922,840 |
| Forfeited during the year | Forfeited during the year FISCAL 2022 (423,329) |
Forfeited during the year FISCAL 2021 (640,922) |
| Delivered during the year | Delivered during the year FISCAL 2022 (439,262) |
Delivered during the year FISCAL 2021 (414,045) |
| Outstanding at the end of the year | Outstanding at the end of the year FISCAL 2022 2,287,665 |
Outstanding at the end of the year FISCAL 2021 2,315,627 |
The weighted average fair value of the restricted shares granted in Fiscal 2022 is 73.48 euros per share (64.92 euros per shares granted in Fiscal 2021).
The table below shows the grant dates of restricted shares outstanding as of August 31, 2022, the assumptions used to estimate their fair value at the grant date and the number of restricted shares outstanding at the period end:
| DATE OF GRANT | VESTING PERIOD(in years) | EXPECTED DIVIDEND YIELD(in %) | RISK-FREE INTEREST RATE(in %) | LOAN INTEREST RATE(in %) |
VOLATILITY* (in %) |
NUMBER OF SHARES OUTSTANDING AS OF AUGUST 31 | |
|---|---|---|---|---|---|---|---|
| September 18, 2018 | September 18, 2018
International |
September 18, 2018 VESTING PERIOD(in years) 4 |
September 18, 2018 EXPECTED DIVIDEND YIELD(in %) 2.7% |
September 18, 2018 RISK-FREE INTEREST RATE(in %) 0.0% |
September 18, 2018 LOAN INTEREST RATE(in %) N/A |
September 18, 2018
VOLATILITY* (in %) 21.3% |
September 18, 2018 NUMBER OF SHARES OUTSTANDING AS OF AUGUST 31 24,539 |
| June 19, 2019 | June 19, 2019
International |
June 19, 2019 VESTING PERIOD(in years) 4 |
June 19, 2019 EXPECTED DIVIDEND YIELD(in %) 3.0% |
June 19, 2019 RISK-FREE INTEREST RATE(in %) 0.0% |
June 19, 2019 LOAN INTEREST RATE(in %) N/A |
June 19, 2019
VOLATILITY* (in %) 21.9% |
June 19, 2019 NUMBER OF SHARES OUTSTANDING AS OF AUGUST 31 626,957 |
| November 6, 2020 | November 6, 2020
International |
November 6, 2020 VESTING PERIOD(in years) 4 |
November 6, 2020 EXPECTED DIVIDEND YIELD(in %) 3.0% |
November 6, 2020 RISK-FREE INTEREST RATE(in %) 0.0% |
November 6, 2020 LOAN INTEREST RATE(in %) N/A |
November 6, 2020
VOLATILITY* (in %) 21.9% |
November 6, 2020 NUMBER OF SHARES OUTSTANDING AS OF AUGUST 31 8,000 |
| November 20, 2020 | November 20, 2020
International |
November 20, 2020 VESTING PERIOD(in years) 3 |
November 20, 2020 EXPECTED DIVIDEND YIELD(in %) 1.8% |
November 20, 2020 RISK-FREE INTEREST RATE(in %) 0.0% |
November 20, 2020 LOAN INTEREST RATE(in %) N/A |
November 20, 2020
VOLATILITY* (in %) 38.8% |
November 20, 2020 NUMBER OF SHARES OUTSTANDING AS OF AUGUST 31 803,000 |
| February 1, 2022 | February 1, 2022
International |
February 1, 2022 VESTING PERIOD(in years) 3 |
February 1, 2022 EXPECTED DIVIDEND YIELD(in %) 3.0% |
February 1, 2022 RISK-FREE INTEREST RATE(in %) 0.0% |
February 1, 2022 LOAN INTEREST RATE(in %) N/A |
February 1, 2022
VOLATILITY* (in %) 39.0% |
February 1, 2022 NUMBER OF SHARES OUTSTANDING AS OF AUGUST 31 800,080 |
| June 22, 2022 | June 22, 2022
International |
June 22, 2022 VESTING PERIOD(in years) 3 |
June 22, 2022 EXPECTED DIVIDEND YIELD(in %) 3.0% |
June 22, 2022 RISK-FREE INTEREST RATE(in %) 1.4% |
June 22, 2022 LOAN INTEREST RATE(in %) N/A |
June 22, 2022
VOLATILITY* (in %) 43.7% |
June 22, 2022 NUMBER OF SHARES OUTSTANDING AS OF AUGUST 31 25,089 |
| TOTAL | TOTAL
|
TOTAL VESTING PERIOD(in years)
|
TOTAL EXPECTED DIVIDEND YIELD(in %)
|
TOTAL RISK-FREE INTEREST RATE(in %)
|
TOTAL LOAN INTEREST RATE(in %)
|
TOTAL VOLATILITY* (in %)
|
TOTAL NUMBER OF SHARES OUTSTANDING AS OF AUGUST 31 2,287,665 |
*Applicable for the portion of the restricted share grants subject to the TSR performance condition. Volatility is determined by reference to the share’s historical weighted average volatility over a certain period prior the grant date and the implicit volatility expected by the market.
