Siemens 2005 Annual Report Download - page 205
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205
In fiscal 2005, the Company granted 1,152,508 stock awards to 5,343 employees of which
24,177 awards were granted to the Managing Board. 16,460 awards forfeited in fiscal 2005, result-
ing in a year-end balance of 1,136,048 awards.
Stock awards are accounted under the fair value recognition provisions of SFAS 123. Fair value
was determined as the market price of Siemens shares less the present value of dividends expect-
ed during the 4 year vesting period which resulted in a fair value of €55.63 per award. Total fair
value of stock awards granted in fiscal 2005 amounted to €64.
Phantom stock
Where local regulations restrict the grants of stock awards in certain jurisdictions, the Company
grants phantom stock to employees under the same conditions as the Siemens stock awards,
except that grantees receive the share prices’ equivalent value in cash only at the end of the four
year vesting period. In fiscal 2005, 28,628 phantom stock rights were granted and 391 phantom
stock rights forfeited resulting in a balance of 28,237 phantom stock rights as of September 30,
2005.
Employee share purchase plan
Under a compensatory employee share purchase program, employees may purchase shares in the
Company at preferential prices once a year. The employee share purchase program is accounted
under the fair value recognition provisions of SFAS 123. During the years ended September 30,
2005 and 2004, the Company incurred compensation expense (before income taxes) of €31 and
€35, respectively, related to the sale of repurchased shares to employees.
28 Personnel costs
Notes to Consolidated Financial Statements
Consolidated Financial Statements Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated
and per share amounts)
Year ended
September 30,
2005 2004
Wages and salaries 21,680 20,261
Statutory social welfare contributions and expenses
for optional support payments 3,576 3,419
Expenses relating to pension plans and employee benefits 1,390 1,416
26,646 25,096