28. Share-based payments
Options on participation certificates of Chocoladefabriken Lindt & Sprüngli AG are only outstanding within the scope of the existing employee stock option program. An option entitles an employee to a participation certificate at an exercise price, which consists of an average of the price of the five days preceding the issue date. The options have a blocking period during the vesting period of three to five years and if not exercised, they expire after seven years. Changes in outstanding options can be viewed in the table below:
| 2014 | 2013 | |||
| Number of options | Weighted average exercise price (CHF / PC) | Number of options | Weighted average exercise price (CHF / PC) | |
| Outstanding options as at January 1 | 157,509 | 2,576.27 | 179,647 | 2,437.21 |
| New option rights | 19,550 | 4,062.00 | 33,450 | 3,123.00 |
| Exercised rights | – 30,755 | 2,409.56 | – 53,076 | 2,454.23 |
| Cancelled rights | – 1,879 | 2,897.40 | – 2,512 | 2,490.76 |
| Outstanding options as at December 31 | 144,425 | 2,808.70 | 157,509 | 2,576.27 |
| of which exercisable at December 31 | 26,082 | 2,126.13 | 23,458 | 2,502.58 |
| Average remaining time to expiration (in days) | 796 | 622 |
1) The exercise price varies between CHF 1,543 to CHF 4,062.
Options expenses are charged to the income statement proportionally according to the vesting period. The recorded expenses amount to CHF 15.2 million (CHF 16.5 million in 2013). The assumptions used to calculate the expenses for the grants 2011 to 2014 are listed in the following table:
| Date of issue | 13.1.2014 | 11.1.2013 | 7.2.2012 | 18.3.2011 |
|---|---|---|---|---|
| Number of issued options | 19,550 | 33,450 | 35,725 | 36,180 |
| of which in bracket A (blocking period three years) | 6,787 | 11,649 | 12,450 | 12,617 |
| of which in bracket B (blocking period four years) | 6,883 | 11,758 | 12,556 | 12,705 |
| of which in bracket C (blocking period five years) | 5,880 | 10,043 | 10,719 | 10,858 |
| Issuing price in CHF | 4,062 | 3,123 | 2,679 | 2,523 |
| Price of participation certificates on date of issue in CHF | 4,036 | 3,159 | 2,711 | 2,580 |
| Value of options on issuing date | ||||
| bracket A (blocking period three years) in CHF | 633.56 | 568.13 | 491.66 | 524.31 |
| bracket B (blocking period four years) in CHF | 691.87 | 587.76 | 509.70 | 557.09 |
| bracket C (blocking period five years) in CHF | 735.21 | 592.07 | 533.03 | 587.88 |
| Maximum life span (in years) | 7 | 7 | 7 | 7 |
| Form of compensation | PC from conditional capital | |||
| Expected life span (in years) | 5–6 | 5–6 | 5–6 | 5–6 |
| Expected rate of retirement per year | 2.3% | 2.4% | 2.5% | 2.5% |
| Expected volatility | 22.1% | 22.9% | 23.8% | 24.3% |
| Expected dividend yield | 1.49% | 1.45% | 1.39% | 1.32% |
| Risk-free interest rate | 0.66 – 0.92% | 0.46 – 0.57% | 0.48 – 0.63% | 1.48 – 1.70% |
| Model | Binomial model | |||