Novo-Nordisk-AR-2012-en

Section 5
Other disclosures
CONSOLIDATED FINANCIAL STATEMENTS 85
This section includes other statutory notes or notes that are of secondary importance for understanding the fi nancial
performance of Novo Nordisk. A list of subsidiaries in the Novo Nordisk Group is also included here.
5.1 Share-based payment schemes
Accounting policies
Share-based compensation
Novo Nordisk operates equity-settled, share-based compensation plans.
The fair value of the employee services received in exchange for the grant
of the options or shares is recognised as an expense and allocated over the
vesting period.
The total amount to be expensed over the vesting period is determined by
reference to the fair value of the options or shares granted, excluding
the impact of any non-market vesting conditions. The fair value is fi xed at
the grant date. Non-market vesting conditions are included in assumptions
about the number of options or shares that are expected to vest. At the end
of each reporting period, Novo Nordisk revises its estimates of the number
of options or shares that are expected to vest. Novo Nordisk recognises the
impact of the revision of the original estimates, if any, in the Income
statement and in a corresponding adjustment to Equity (change in
proceeds) over the remaining vesting period. Adjustments relating to prior
years are included in the Income statement in the year of adjustment.
Share-based payment
DKK million 2012 2011 2010
Employee shares 50 96 241
Long-term share-based incentive
programme (Senior Management Board) 73 57 64
Long-term share-based incentive
programme and share options
(Management group below
Senior Management Board) 1 185 166 158
Share-based payment expensed
in the Income statement 308 319 463
1. Includes long-term share-based incentive programme for 2007–2012.
Employee shares
In 2010, a general employee share programme was implemented in
Denmark with exercise in the same year. Outside Denmark the programme
was structured as share options with the same initial benefi t per employee
as in Denmark. The cost of the programme outside Denmark is amortised
over the period 2010–2013.
Long-term share-based incentive programme
For a description of the programme, please refer to ‘Remuneration’ in
‘Governance, leadership and shares’, pp 49–51.
On 30 January 2013, the Board of Directors approved the establishment,
for members of the Senior Management Board, of a joint pool for the
fi nancial year 2012 by allocating a total of 97,381 Novo Nordisk B shares.
This allocation amounts on average to eight months’ fi xed base salary plus
pension contribution per participant, corresponding to a value at launch of
the programme of DKK 73 million. This amount was expensed in 2012. The
share price used for the conversion was the average share price (DKK 751)
for Novo Nordisk B shares on NASDAQ OMX Copenhagen in the period
2–16 February 2012. Based on the split of participants when the joint
pool was established, approximately 30% of the pool will be allocated to
members of Executive Management and 70% to other members of the
Senior Management Board.
The shares allocated to the joint pool for 2009 (177,066 shares),
corresponding to a value at launch of the programme of DKK 54 million
expensed in 2009, were released to the individual participants subsequent
to the approval of the Annual Report 2012 by the Board of Directors
and after the announcement of the 2012 full-year fi nancial results on
31 January 2013.
For the management group below the Senior Management Board, a
share-based incentive programme with similar performance criteria was
introduced in 2007.
The shares allocated to the joint pool for 2009 (605,218 shares),
corresponding to a value at launch of the programme of DKK 186 million
amortised over the period 2009–2012, were released to the individual
participants subsequent to the approval of the Annual Report 2012 by the
Board of Directors and after the announcement of the 2012 full-year
fi nancial results on 31 January 2013. The number of shares to be transferred
(541,321) is lower than the original number of shares allocated to the
share pool as some participants had left the company before the release
conditions of the programme were met.
The total number of shares in the joint pools relating to the years 2010,
2011 and 2012 is as follows:
Number Amount
Year allocated to pool of shares DKK million Vesting
Senior Management Board
2010 168,576 64 2014
2011 89,712 57 2015
2012 97,381 73 2016
355,669
Management group below
Senior Management Board
2010 548,936 208 2014
2011 297,133 188 2015
2012 311,847 234 2016
Cancelled (35,428)
1,122,488
Total 1,478,157
NOVO NORDISK ANNUAL REPORT 2012