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4.1 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 7. Number of employees, personnel costs and employee benefits
DANONE
REGISTRATION DOCUMENT 2015
111
Accounting treatment of Group performance shares and stock-options
Accounting principles
The benefits relating to stock-options and Group performance shares
granted to certain employees and corporate officers are written off
as an expense on the Other income (expense) item of the consolida-
ted income statement. The corresponding entry to this charge is an
equivalent increase in consolidated equity on the Retained earnings
item of the consolidated balance sheet. The charge corresponds to
the fair value, determined on the grant date, of the stock-options
and Group performance shares granted.
The fair value of the stock-options is determined using the Black
& Scholes valuation model, based on assumptions determined
by management. The corresponding charge is expensed over the
vesting period (
i.e.
2 to 4 years).
The fair value of Group performance shares is calculated on the
basis of assumptions made by the Group's management. The
corresponding charge is spread over the vesting period (either 3
or 4 years). To the extent that performance conditions are based
on internal performance, charges recognized in respect of shares
that lapse due to the failure to achieve said performance conditions
are written back in the income statement for the period in which it
is probable they will lapse.
They are taken into account in calculating the dilution as described
in Note 13.4 of the Notes to the consolidated financial statements.
Valuation
Year ended December 31
(in € per share except number of shares)
2014
2015
Number of shares granted during the year
778,371
645,372
Fair value of Group performance shares granted during the year
(a)
50.3
56.5
Average DANONE share price during the year
54.3
60.7
(a) Fair value as of the grant date.
Expense related to Group performance shares and stock-options
Year ended December 31
(in € millions)
2014
2015
Group performance shares
(19)
(21)
Stock-options
(a)
−
−
Total expense
(19)
(21)
(a) As of December 31, 2014 and December 31, 2015, all options can be exercised and therefore no longer result in expense recognition
Note 7.5. Company Savings Plan
General and accounting principles
Employees of the Group's French entities can, on an annual basis,
subscribe a capital increase in the Company through a Company
Savings Plan. The purchase price of the shares corresponds to 80%
of the average DANONE share price over the 20 days preceding the
meeting of the Board of Directors that approves the plan.
The benefit granted to the employees is calculated based on the fair
value of the shares on the grant date. The fair value is calculated
after taking into account the five-year holding period on these shares
and the market parameters applicable to employees, in particular
the borrowing rate.
The corresponding charge is recorded under Other income (expense)
for the year at the time of the capital increase.
Capital increase reserved for employees as part
of the Company Savings Plan
In 2015, under the terms of the Company Savings Plan, the Group
implemented a capital increase involving 838,052 new shares issued
at a price of €47.11 per share.