QinetiQ Annual Report 2017

www.qinetiq.com
QinetiQ
QinetiQ Group
Group
plc
plc
Annual
Annual
Report
Report
and
and
Accounts
Accounts
2017
2017
Financial statements
Financial statements
137
137
Group Deferred Annual Bonus Plan (DAB)
Under the QinetiQ DAB Plan the Group requires certain senior executives to defer part of their annual bonus as shares and be entitled to matching awards to
a maximum of 1:1 based on EPS performance. The number that will vest is dependent on the growth of EPS over the measurement period of three years as
detailed in the Report from the Remuneration Committee.
2017
Number of
matching
shares
2016
Number of
matching
shares
Outstanding at start of year 311,500 464,115
Forfeited during year (294,247) (152,615)
Outstanding at end of year 17,253 311,500
DAB matching shares are equity-settled awards; those outstanding at 31 March 2017 had an average remaining life of 0.3 years (2016: 0.7 years). There are no
shares granted or expressed in the prior year or current year. There is no exercise price for these DAB awards. Of the shares outstanding at the end of the year
nil were exercisable (2016: nil).
Cash Alternative Units (CAUs)
2017
Number of
awards
2016
Number of
awards
Outstanding at start of year 35,000 290,022
Awarded during year – 20,000
Exercised during the year (35,000) (135,352)
Forfeited during year – (139,670)
Outstanding at end of year – 35,000
CAUs are cash-settled awards which vest over one, two, three and four years from the date of grant. The CAUs have no performance criteria attached, other than
the requirement that the employee remains in employment with the Group. Those awards outstanding at 31 March 2017 had an average remaining life of nil years
(2016: 0.5 years). There is no exercise price for these awards. The fair value of the grants made during the prior year was £2.28 being the Group’s closing share
price on that day. The weighted average share price on the date of exercise was £2.08 (2016: £2.34). The carrying amount of the liability of the grants at the
balance sheet date was nil (2016: nil). Of the awards outstanding at the end of the year nil were exercisable.
Bonus Banking Plan (BBP)
During the year, the Group granted BBP awards to certain senior executives in the UK.
2017
Number of
awards
2016
Number of
awards
Outstanding at start of year 814,778 330,725
Granted during the year 512,003 493,505
Exercised during the year (534,818) (5,711)
Forfeited during year (5,768) (3,741)
Outstanding at end of year 786,195 814,778
The BBP is a remuneration scheme that runs for four years with effect from 1 April 2014. Refer to the Directors’ Remuneration Report for further details. Under the
BBP a contribution will be made by the Company into the participant’s plan account at the start of each plan year. 50% of the value of a participant’s bonus account
will be paid out annually for three years with 100% of the residual value paid out at the end of year four. 50% of the unpaid balance of a participant’s bonus account
will be at risk of forfeiture.
At 31 March 2017, the awards had an average remaining life of 1.8 years (2016: 2.3 years). There is no exercise price for these awards. The fair value of the awards
at 31 March 2017 was £2.80 (2016: £2.34) being the Group’s 30 day average share price in the period running up to 31 March. Of the awards outstanding at the
end of the year nil were exercisable.
Share-based award pricing – other
Share-based awards that vest based on non-market performance conditions, including certain PSP, RSUs and DAB awards, have been valued at the share price
at grant.