2008 Annual Report - SBM Offshore

114SBM Offshore Annual Report 2008 / Financial Statements 2008For current participants in the Company’s share option plan there are no performance criteria attachedto the grant of options. For Board of Management members who were part of the LTI scheme between2005 and 2007 inclusive under such LTI the grant of options was conditional on achieving at least 5%average compounded EPS growth over a three-year period following the reference year. For growth inexcess of 5%, additional options are granted as follows:CEOOther Boardof Management2008 2007 2008 2007Options if 5% EPS growth n/a 40,000 n/a 30,000Additional options for each 1% surplusEPS growth n/a 8,000 n/a 6,000As from 2008 under the Remuneration Policy, no options are awarded to the CEO or Board ofManagement members. At the end of 2007, the first three-year period under the LTI scheme adoptedin 2005 ended. Average EPS growth over the period amounted to 34% and accordingly a total of238,000 options (2005 base award plus performance related) were awarded to Mr. Keller and 510,000to other Board of Management members who were part of the LTI scheme in 2005. At the end of 2008,the second three-year period under the former LTI scheme has ended. Average EPS growth over theperiod has not reached the 5% threshold and accordingly no performance related options are earnedand the options provisionally awarded in 2006 will be cancelled.Performance SharesPerformance shares under both former LTI and the amended 2008 LTI form part of the LTI for Boardof Management members, and are subject to an EPS growth threshold. Performance shares vest threeyears after the provisional award date and must be retained for two years from the vesting date.Main assumptions included in the calculation for performance shares are:2008 2007Expected departures 0% 0%Fair value at grant date € 25.82 € 25.91As from 2008, under the Remuneration Policy the number of conditional performance shares awardedis such that their value is equivalent to 100% of the Managing Director’s base annual salary of theprevious year, assuming ‘At target’ EPS growth performance over the three year period following theperiod of reference. In 2008 the conditional awards were 24,498 shares for Mr. Keller, 20,035 sharesfor Mr. Mace and 18,237 shares for Mr. Miles. If the threshold average EPS growth over 2008 to 2010is not achieved the conditional awards will be cancelled. The maximum possible award is 150% of theconditional award.In respect of conditional performance shares awarded in 2005 on account of performance year 2004,the three year measurement period 2005-2007 generated average EPS growth over 2005-2007amounting to 34%. Under the former LTI scheme, performance shares were awarded conditionallyassuming a 5% EPS growth threshold, plus additional performance shares for each percentage pointEPS growth above the 5% threshold.Accordingly a total of 49,980 performance shares (2005 base award plus performance related) wereawarded to Mr. Keller and 107,100 to other Board of Management members who were part of the LTIscheme in 2005. For the period 2006-2008 the EPS growth threshold of 5% was not obtained and noperformance shares (base award nor performance related) will be issued to Board of Managementmembers who were part of the LTI scheme in 2006.