Bodycote Incentive Plan (BIP)
The Company operates the BIP under which executive directors and senior executives receive a conditional award of Bodycote shares up to a maximum of 175% of base salary. Vestings of awards are based upon two performance measures, over a three-year period.
Fifty per cent of the award is subject to a return on capital employed (ROCE) performance condition and 50% of the award is subject to an earnings per share (EPS) performance condition.
In the event that threshold performance for both EPS and ROCE is not achieved, none of the conditional awards will vest.
The number of outstanding share awards is as follows:
| BIP
2018 | BIP
2017 |
| At 1 January | 2,206,287 | 2,060,570 |
| Granted during the year | 1,043,457 | 759,058 |
| Exercised during the year | (491,116) | (90,533) |
| Expired during the year | (246,127) | (522,808) |
| At 31 December | 2,512,501 | 2,206,287 |
| Average fair value of share awards granted during the year at date of grant (pence) | 848.5 | 757.6 |
| Fair value of awards granted during the year (£) | 8,853,733 | 5,750,623 |
Exercise Price = £nil.
The inputs to the Black-Scholes simulation model, used to determine the charge to the income statement for BIP, are as follows:
| | 2018 | 2017 |
| Weighted average share price | pence | 848.5 | 757.6 |
| Weighted average exercise price | pence | nil | nil |
| Expected life | years | 3.0 | 3.0 |
| Expected dividend yields | % | 3.8 | 1.9 |
The Group recognised a total charge to the income statement of £3.8m (2017: £7.8m) related to equity-settled share-based payment transactions.
The Group operated a Co-investment plan (CIP), for which the last award was granted in 2015. The plan is now closed and no shares are outstanding.