Share option information.
A new employee equity program was launched in 2016 with the shareholders authorising up to 2 million B-shares to be used for the program.The equity program allows management to grant selected employees options and to give them the opportunity to purchase restricted stock in the parent company OP Invest AS. The expenses are allocated to the subsidiary where the employees are employed. Options grants typically vest quarterly over a three-year period after a 6 to 9 month waiting period. Restricted stock typically vests in a similar fashion. Prior to vesting, the Group has a right to buy back restricted stock from the employee if the employee ends their employment with a Group company for any reason.
The Group operates an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (stock options) of the Group.
The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted.
At the end of each reporting period, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions and service conditions. It recognises the impact of the revision to original estimates, if any, in the consolidated statement of profit or loss, with a corresponding adjustment to equity.
The fair value of services received in return for stock options granted is measured by using the Black & Scholes option pricing model. The significant inputs into the model are weighted average share price at the grant date, exercise price shown above, volatility of 40 %, an expected option life of three years and an annual risk-free interest rate of 0,7 %.
Maximum term of options granted is 7 years.
The number of share options movement as follows:
i) Outstanding at beginning of year 477,913
ii) Granted during the year 20,006
iii) Forfeited during the year 12,299
iv) Exercised during the year 0
v) Expired during the year 16,671
vi) Outstanding at the year end 468,949
vii) Exercisable at the year end 387,936
The total cost of the share options is as follows: 31 Dec 2018 - £65,887, 31 Dec 2019 - £271,616, 31 Dec 2020 - £162,229, 31 Dec 2021 - £127,107, 31 Dec 2022 - £207,930 and 31 Dec 2023 - £222,492.