Page 279 - 2012 Annual Report

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VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
4
III - CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 21 Share-based compensation plans
21.2. PLANS GRANTED BY VIVENDI
21.2.1. Information on plans granted by Vivendi
Vivendi has granted several share-based compensation plans to
its employees. During 2012 and 2011, Vivendi granted stock option
and performance share plans, wherever the fiscal residence of the
beneficiaries, and bonus share plan for employees of all the group’s
French subsidiaries, as well as stock purchase plans for its employees and
retirees (employee stock purchase plan and leveraged plan).
The accounting methods applied to value and recognize these granted
plans are described in Note 1.3.10.
More specifically, the volatility applied in valuing the plans granted by
Vivendi in 2012 and 2011 is calculated as the weighted average of (a) 75%
of the historical volatility of Vivendi shares computed on a 6.5-year period
and (b) 25% of the implied volatility based on Vivendi put and call options
traded on a liquid market with a maturity of 6 months or more.
The risk-free interest rate used is the rate of French “Obligations
Assimilables du Trésor” (OAT) with a maturity corresponding to the
expected term of the instrument at the valuation date.
The expected dividend yield at grant date is based on Vivendi’s
dividend distribution policy, which is an expected dividend representing
approximately 45% to 55% of adjusted net income.
EQUITY-SETTLED INSTRUMENTS
The definitive grant of equity-settled instruments, excluding bonus share
plan, is subject to the satisfaction of performance conditions. Such
performance conditions include an external indicator, thus following AFEP
and MEDEF recommendations. The objectives underlying the performance
conditions are determined by the Supervisory Board upon proposal
by the Human Resources Committee.The value of the granted
equity-settled instruments is estimated and set at grant date.
For the main stock option plans, performance share plans and bonus share plans of 2012 and 2011, the applied assumptions were as follows:
2012 2011
Grant date (a) July 16, April 17, April 13,
Data at grant date:
Option strike price (in euros) (b) na* 13.63 19.93
Share price (in euros) 15.75 12.53 20.56
Expected volatility na* 27% 25%
Expected dividend yield 6.35% 7.98% 7.30%
Performance conditions achievement rate (c) na* 100% 100%
na*: not applicable.
(a) Vivendi’s Management Board decided to grant 50 bonus shares to the employees of all the group’s French subsidiaries.
(b) In accordance with legal requirements, the number and strike price of stock options, as well as the number of performance shares in connection
with outstanding plans, were adjusted to take into account the impact, for the beneficiaries of the grant, of one bonus share on May 9, 2012 to each
shareowner per 30 shares held by a withdrawal from additional paid in capital. This adjustment had no impact on share-based compensation expense
related to the relevant stock option and performance share plans.
(c) Beginning in 2012, for both performance shares and stock options, the objectives underlying the performance conditions are assessed once on a
cumulative basis at the expiry of a two-year period (each year during two years for plans granted in 2011). Their definitive grant will be effective upon
the satisfaction of the following new performance conditions:
− internal indicator (70%): EBITA margin rate which will be recorded as of December 31, 2013 on the basis of cumulative 2012 and 2013 fiscal years
(compared to adjusted net income (45%) and cash flow from operations (25%) for plans granted in 2011); and
− external indicators (30%): the performance of Vivendi share between January 1, 2012 and December 31, 2013, compared to two stock indices:
Europe Stoxx 600 Telecommunications (70%, compared to 60% for plans granted in 2011) and a range of Media values (30%, compared to 40% for
plans granted in 2011).
As the performance conditions related to the 2011 plan were satisfied at year-end 2012, the definitive grant of stock options and performance shares from
April 13, 2011 became effective as of December 31, 2012. The acquisition of these instruments is conditional upon active employment at the vesting date.