Home' Slater and Gordon Annual Report : Slater and Gordon AR 2016 Contents Notes to the Financial Statements
For the Year Ended 30 June 2016
Slater and Gordon Limited
5.5 Contributed Equity (continued)
All VCR shares have vested (728,334 VCR shares) or been redeemed (105,000 VCR shares) in the current year. As at
30 June 2016 there were nil VCR shares on issue (30 June 2015: 833,334 VCR shares). Please refer to Note 5.6 for
discussion on the rights attached to VCR shares.
5.6 Share-Based Payment Arrangements
5.6.1 Accounting Policies
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value
of the equity instruments at the grant date.
The consolidated entity operates share-based payment employee share and option schemes. The fair value of the equity
to which employees become entitled is measured at grant date and recognised as an expense over the vesting period,
with a corresponding increase to an equity account. In respect of share-based payments that are dependent on the
satisfaction of performance conditions, the number of shares and options expected to vest is reviewed and adjusted at
each reporting date. The amount recognised for services received as consideration for these equity instruments granted
is adjusted to reflect the best estimate of the number of equity instruments that eventually vest.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the
goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured
at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty
renders the service.
5.6.2 Employee Equity Incentive Plan (“EIP”)
For cash-settled share-based payment transactions, the liability needs to be remeasured at the end of each reporting
period up to the date of settlement, with any changes in fair value recognised in the profit or loss. This requires a
reassessment of the estimates used at the end of each reporting period.
The Group introduced a broad based equity incentive plan which was approved by the Shareholders at the 2014 Annual
General Meeting (“AGM”) .
(i). Exempt Share Save Scheme (“SSS”)
In 2015 the Group introduced an offer for Exempt Shares in the Equity Incentive Plan. The Plan gives the Group’s
employees the opportunity to acquire shares in the Company. Each year, participating employees can make
contributions from their pre-tax salary to acquire $500 worth of shares. Such employee contributions are matched by the
Group with an additional $500 worth of shares being acquired for each participating employee. All employees who are
Australian tax residents with at least 6 months service are entitled to participate in this Plan. Shares acquired under this
Plan are subject to a holding period of 3 years. In the year ended 30 June 2016, 142,756 shares were issued under this
scheme (30 June 2015: 65,688 shares).
(ii). Share Incentive Plan (“SIP”)
The plan also incorporates a tax-approved scheme to employees in the UK. The Plan gives the Group’s employees the
opportunity to acquire shares in the Company. Employees can make contributions from their pre-tax salary to acquire
£375 (max) worth of shares. Such employee contributions are matched by the Group with a free share for every share
purchased by the employee. All employees of the Group in the UK with at least 6 months service are entitled to
participate in this Plan. Shares acquired under this plan are held in trust by MM&K Share Plan Trustee Ltd for a period of
5 years from the date of acquisition. There was no issue of shares under this plan in the current year ended 30 June
2016 (30 June 2015: 85,980 shares).
(iii). Executive Equity Incentive Scheme (“EEIS”)
The plan introduces an ownership-based compensation scheme for executives and senior employees.
Performance rights are granted for no consideration. Under the scheme each performance right carries an entitlement to
one fully paid ordinary share in the Company subject to satisfaction of performance hurdles and/or continued
employment at an exercise price of nil. These executives and senior employees are not entitled to vote or receive any
dividends or attend the meeting of the shareholders during the vesting period. Performance rights may not be
transferred, disposed or pledged as security. If the executive ceases to be employed by the Group within the vesting
period, the rights will be forfeited, except in limited circumstances that are approved by the Board.
The performance hurdles are based on the following:
• Total Shareholder Return (“TSR”) Outperformance Hurdle – This performance hurdle is based on the Company’s
TSR against the TSR of the constituent companies within the S&P/ASX200 (30 June 2015:S&P/ASX 300) index
(excluding resources) over the Measurement Period.
82 Slater and Gordon Limited
Annual Report 2016
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