Note 9 Employee benefits
9.1 Share-based payments

Stock option plans

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The fair value of the options is recognized on a straight-line basis over the vesting period for the relevant plan. The cost is included in employee benefit expense, with a corresponding adjustment to equity. When the option is exercised, the cash amount received by the Group in settlement of the exercise price is booked in cash and cash equivalents, with a corresponding adjustment to equity.

 

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IFRS 2 – Share-based Payment applies to the stock option plan set up by the Board of Directors on February 27, 2012. This plans does not have any specific vesting conditions except for the requirement for grantees to continue to be employed by the Group at the end of the vesting period.

 

The fair value of services received as consideration for the stock options is measured by reference to the fair value of the options at the grant date. The fair value of the options is determined using the Black & Scholes option pricing model. The grant date is defined as the date when the plan’s terms and conditions are communicated to Group employees: it corresponds to the date on which the Board of Directors approved the plan.

 

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Performance share plans

 

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IFRS 2 – Share-based Payment applies to the performance share plans set up by the Board of Directors on February 21, 2018, February 27, 2019, March 10, 2020, May 6, 2020, May 11, 2021 and October 19, 2021.

 

The recognition principles are the same as those applied to stock option plans.

The number of performance shares is reviewed annually based on changes in the probability of the performance objectives being met.

Main characteristics

Edenred’s Board of Directors, at its meetings of February 21, 2018, February 27, 2019, March 10, 2020, May 6, 2020, May 11, 2021 and October 19, 2021, carried out the conditional attribution of performance shares.

The duration of the 2018-to-2021 plans is three years for all beneficiaries.

Performance shares vest when the performance conditions are fulfilled. However, if the grantee is no longer employed by the Group on the vesting date, depending on the reason for his or her departure the performance share rights may be forfeited or the number of rights may be reduced proportionately to his or her actual period of service since the grant date. The total number of vested shares may not exceed 100% of the initial grant.

Under the three-year Plan 14, the 527,258 shares granted on May 11, 2021 will vest on May 11, 2024 provided that several performance conditions are met.

Under the three-year Plan 15, the 8,500 shares granted on October 19, 2021 will vest on October 19, 2024 provided that several performance conditions are met.

Fulfillment of the performance conditions for both plans will be assessed over the period from January 1, 2021 to December 31, 2023, based on the degree to which the following objectives have been met:

(i) two internal performance objectives, which will determine 75% of the total grant and are linked to growth in:

  • EBITDA,
  • the three CSR criteria (diversity, Greenhouse gas emissions and nutrition);

(ii) one external (market) performance objective, which will determine 25% of the total grant and is linked to:

  • Edenred’s total shareholder return (TSR) compared with the average TSR of the companies in the SBF 120 index.