Notes to the Consolidated Financial Statements

Share plans

In 2019, employees were able to purchase a defined number of shares at a discount of 35% (PY: 35%) compared to the market price (“Employee share purchase plan”). Geberit management was entitled to draw the previous year’s variable remuneration partly or entirely in shares valued at market price (“Management share purchase plan”). For each of these shares, management participants received 1.5 options (see part 2: “Option plans”). The members of the Board of Directors received a significant part of their compensation for 2018 in shares of Geberit AG (measured at current market value). All share plans are subject to blocking periods valid beyond the period of employment.

The share plans introduced in 2019 are summarised below:

The 32,579 shares required for these plans were taken from the stock of treasury shares.

As at 31 December 2019, the Board of Directors, the Group Executive Board and the employees owned a combined total of 372,600 (PY: 386,381) shares, i.e. 1.0% (PY: 1.0%) of the share capital of Geberit AG under these plans.

Option plans

The management has the opportunity to invest part or all of their variable remuneration in shares of Geberit AG through the management share purchase plan (MSPP). They may define a fixed number of shares to purchase, or a certain amount or a percentage of their variable remuneration to be invested in shares. In order to encourage management to participate in the programme, 1.5 free options are provided for each share purchased through the programme. These options are subject to a vesting period of three years.

In connection with an additional option plan (MSOP), the members of the Group Executive Board and managing directors are entitled to additional options. The options are subject to a vesting period of three years.

The exercise price of the options corresponds to the fair market value of the Geberit shares at the time of granting. The options have a term of nine years (MSPP & MSOP). They can be exercised between the vesting date and the maturity date. The vesting of share options is subject to the achievement of a performance criterion – the average Return on Invested Capital (ROIC) – over the respective vesting period.

The following numbers of options out of the 2019 grant are expected to be allocated with final effect at the end of the vesting period¹:

The fair value of the options granted in 2019 as at March 2019 amounted on average to CHF 39.39 (PY: CHF 36.61) for MSPP and CHF 39.39 (PY: CHF 39.29) for MSOP at the respective granting date. The fair value was determined using the binomial model for “American Style Call Options”.

The calculation model was based on the following parameters:

The following table summarises all option plans in place as at 31 December 2019¹:

The following movements took place in 2019 and 2018¹:

The 527,852 options outstanding represent 1.4% of the outstanding shares of Geberit AG. In principle, the Group hedges this exposure with treasury shares.

The options outstanding as at 31 December 2019 had an exercise price of between CHF 231.20 and CHF 435.95 and an average remaining contractual life of 6.4 years (PY: 5.5 years).

Costs resulting from share plans amounted to MCHF 2.9 in 2019 (PY: MCHF 3.0); those for option plans totalled MCHF 4.7 (PY: MCHF 3.8).