Share-based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Our share-based compensation expense primarily relates to the share-based incentive awards issued by Liberty Global to its employees and employees of its subsidiaries. A summary of our aggregate share-based compensation expense is set forth below:


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
	in millions

Liberty Global:
Performance-based incentive awards (a)	$	11.9	$	57.0	$	50.3	$	106.3
Non-performance based incentive awards (b)	31.4		27.8		116.2		93.9
Other (c)	7.8		6.9		22.2		19.1
Total Liberty Global	51.1		91.7		188.7		219.3
Other (d)	6.9		12.7		31.9		24.1
Total	$	58.0	$	104.4	$	220.6	$	243.4
Included in:
Other operating expense	$	1.6	$	2.5	$	10.4	$	4.8
SG&A expense	56.4		101.9		210.2		238.6
Total	$	58.0	$	104.4	$	220.6	$	243.4

_______________

(a)Includes share-based compensation expense related to (i) performance-based restricted share units (PSUs), (ii) our 2019 CEO Performance Award and (iii) our 2019 Challenge Performance Awards.

(b)In April 2021 with respect to 2014 and 2015 grants and April 2020 with respect to 2013 grants, the compensation committee of our board of directors approved the extension of the expiration dates of outstanding share appreciation rights (SARs) and director options from a seven-year term to a ten-year term. Accordingly, the Black-Scholes fair values of the respective outstanding awards increased, resulting in the recognition of aggregate incremental share-based compensation expense of $22.7 million and $18.9 million during the second quarters of 2021 and 2020, respectively.

(c)Represents annual incentive compensation and defined contribution plan liabilities that have been or are expected to be settled with Liberty Global ordinary shares. In the case of the annual incentive compensation, shares have been or will be issued to senior management and key employees pursuant to a shareholding incentive program. The shareholding incentive program allows these employees to elect to receive up to 100% of their annual incentive compensation in ordinary shares of Liberty Global in lieu of cash. In addition, the 2021 amounts include compensation expense related to the 2021 Ventures Incentive Plan, as defined and described below.

(d)Amounts primarily relate to share-based compensation expense associated with Telenet’s share-based incentive awards.

The following table provides the aggregate number of options, SARs and performance-based share appreciation rights (PSARs) with respect to awards issued by Liberty Global that were (i) outstanding and (ii) exercisable as of September 30, 2021:


	Class A			Class C
	Gross number of shares underlying option, SAR and PSAR awards (a)	Weighted average exercise or base price		Gross number of shares underlying option, SAR and PSAR awards (a)	Weighted average exercise or base price

Held by Liberty Global employees:
Outstanding	25,757,426	$	27.06	60,118,409	$	26.12
Exercisable	12,557,002	$	30.64	27,734,216	$	29.19

Held by former Liberty Global employees (b):
Outstanding	1,675,974	$	31.14	4,689,511	$	28.45
Exercisable	1,388,812	$	32.80	4,115,209	$	23.32

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(a)Amounts represent the gross number of shares associated with option, SAR and PSAR awards issued to our current and former employees and our directors. Our company settles SARs and PSARs on a net basis when exercised by the award holder, whereby the number of shares issued represents the excess value of the award based on the market price of the respective Liberty Global shares at the time of exercise relative to the award’s exercise price. In addition, the number of shares issued is further reduced by the amount of the employee’s required income tax withholding.

(b)Amounts represent certain share-based awards that continue to be held by former employees of Liberty Global subsequent to certain split-off or disposal transactions. Although future exercises of these awards by former employees will not result in the recognition of share-based compensation expense, such exercises will increase the number of our outstanding ordinary shares.

The following table provides the aggregate number of restricted share units (RSUs) and PSUs that were outstanding as of September 30, 2021. The number of shares to be issued on the vesting date of these awards will be reduced by the amount of the employee’s required income tax withholding.


	Class A	Class C

Held by Liberty Global employees:
RSUs	2,722,067	5,443,384
PSUs	1,306,731	2,613,401
Held by former Liberty Global employees (a):
RSUs	74,193	148,583
PSUs	37,510	75,016

_______________

(a)Amounts represent certain share-based awards that continue to be held by former employees of Liberty Global subsequent to certain split-off or disposal transactions. Although we do not recognize share-based compensation expense with respect to these awards, the future vesting of these RSUs and PSUs will increase the number of our outstanding ordinary shares.

2021 Ventures Incentive Plan

In April 2021, the compensation committee of our board of directors approved a new incentive plan, referred to herein as the “2021 Ventures Incentive Plan”. The 2021 Ventures Incentive Plan was provided to executive officers and other key employees and is based on the performance of the Liberty Global Ventures Portfolio (the “Portfolio”), which is measured by assessing the fair value of the Portfolio over a three-year period beginning December 31, 2020 and ending on December 31, 2023. Payout will be denominated in cash and will be assessed at the end of the three-year period using eligible participants’ initial contribution between 10% and 100% of their 2021 annual target equity value (which contributed amount is in lieu of their normal annual equity grant). The compensation committee has the discretion to settle the final payout amount in (i) cash or (ii) Liberty Global Class A and Class C ordinary shares based on the change in the Portfolio’s value. Subject to forfeitures, 100% of each participant’s payout will vest on March 31, 2024. In order to receive the payout, participants are required to remain employed through the final vesting date. The 2021 Ventures Incentive Plan awards are liability classified due to the fact that the final payout under this plan will be denominated in cash and may be settled in a variable number of shares. At September 30, 2021, the estimated fair value of the final payout under the 2021 Ventures Incentive Plan was $17.1 million.

An initial fair value assessment was performed for the Portfolio as of December 31, 2020 by an independent third-party valuation specialist. We recognize share-based compensation expense related to the 2021 Ventures Incentive Plan as a charge to operations on a straight-line basis, including any changes in expense related to the change in the fair value of the Portfolio each assessment date, from the date of grant through the vesting date of March 31, 2024. Our share of payroll taxes incurred in connection with the vesting of the 2021 Ventures Incentive Plan is recorded as a component of share-based compensation expense in our condensed consolidated statement of operations.