RBS 2012 Annual Report Download - page 380

378
Notes on the consolidated accounts continued
3 Operating expenses continued
Deferred performance awards
2012 2011 2010
Value at
grant
£m
Shares
awarded
(million)
Value at
grant
£m
Shares
awarded (1)
(million)
Value at
grant
£m
Shares
awarded (1)
(million)
At 1 January 756 191 1,009 267 — —
Granted 141 50 258 58 1,043 276
Forfeited (98)(25)(47)(13)(34)(9)
Vested (538)(
143)(464) (121) — —
At 31 December 261 73 756 191 1,009 267
The awards granted in 2012 vest evenly over the following three anniversaries.
Restricted share awards
2012 2011 2010
Value at
grant
£m
Shares
awarded
(million)
Value at
grant
£m
Shares
awarded (1)
(million)
Value at
grant
£m
Shares
awarded (1)
(million)
At 1 January 100 30 110 34 117 33
Granted — — — — 26 6
Exercised (49)(
17)(6)(3) (6)(2)
Lapsed (35)(10) (4)(1) (27)(3)
At 31 December 16 3 100 30 110 34
The market value of awards exercised in 2012 was £45 million (2011 - £11 million; 2010 - £6 million).
Long-term incentives
2012 2011 2010
Value
at grant
£m
Shares
awarded
(million)
Options
over shares
(million)
Value at
grant
£m
Shares
awarded (1)
(million)
Options
over shares(1)
(million)
Value at
grant
£m
Shares
awarded (1)
(million)
Options
over shares(1)
(million)
At 1 January 345 58 37 219 25 38 122 1 41
Granted 157 59 — 154 37 1 115 24 —
Exercised (15)(4)(1) (6)(1)— — — —
Lapsed (112) (15)(16)(22) (3) (2) (18)— (3)
At 31 December 375 98 20 345 58 37 219 25 38
Note:
(1) Adjusted for the sub-division and one-for-ten consolidation of ordinary shares in 2012.
The market value of awards exercised in 2012 was £10 million (2011 - £5
million; 2010 - less than £1 million). There are vested options over 18
million shares exercisable up to 2019 (2011 - 4.8 million shares up to
2019; 2010 - 3.3 million shares up to 2020).
At 31 December 2012, a provision of £1 million had been made in respect
of 0.1 million share awards and 0.3 million options over shares that may
be cash-settled (2011 - £3 million in respect of 0.4 million share awards
and 1.4 million options over shares; 2010 - £6 million in respect of 0.3
million share awards and 1.6 million options over shares).
The fair value of options granted in 2012 was determined using a pricing
model that included: expected volatility of shares determined at the grant
date based on historic volatility over a period of up to seven years;
expected option lives that equal the vesting period; no dividends on
equity shares; and a risk-free interest rate determined from the UK gilt
rates with terms matching the expected lives of the options.