Share-Based Compensation Plans

3 Months Ended

Mar. 31, 2014

Share-based compensation plans [Abstract]

Share-based compensation plans

Note 7 – Share-based compensation plans

We have share-based compensation plans to retain employees and non-employee directors and to more closely align their interests with those of our shareholders.

The 2005 Equity Incentive Plan (the “2005 Plan”) and the 2013 Equity Incentive Plan (the “2013 Plan”) permit grants of restricted stock, restricted stock units, performance stock, performance units, stock appreciation rights, stock options, as well as other share-based awards to eligible employees. The 2013 Plan also permits cash awards to eligible employees. The 2005 Plan was replaced by the 2013 Equity Incentive Plan effective in February 2013. No further grants of awards will be made under the 2005 Plan.

Directors are eligible for share-based awards through the Non-Employee Directors' Equity Plan (the “Directors' Plan”). To date, we have granted only deferred stock units under the Directors' Plan. There are also outstanding stock options granted to directors under a prior plan, the Non-Employee Directors' Stock Option Plan (the “Prior Directors' Plan”).

At March 31, 2014, outstanding awards under these plansinclude performance share units (“PSUs”), market share units (“MSUs”), restricted stock units (“RSUs”), deferred stock units (“DSUs”) and stock options.

Method and Assumptions Used to Estimate Fair Value

The fair value of RSUs and DSUs was measured at the date of grant based on the price of Brink's common stock, adjusted for a discount on units that do not receive or accrue dividends.

The fair values of PSUs and MSUs granted were estimated using a Monte-Carlo simulation with the following estimated weighted-average assumptions:

Assumptions Used to Estimate Fair Value of 2014 Grants of PSUs and MSUs			PSUs	MSUs
Number of target shares, in thousands			186.8	82.9
Assumptions used to estimate fair value
	Beginning average price of Brink’s common stock(a)	$	33.29	33.29
	Expected dividend yield for the TSR provision of PSU awards(b)		0%	n/a
	Expected dividend yield for PSUs and MSUs(c)		0%	0%
	Expected volatility(d)		38%	38%
	Risk-free interest rate		0.7%	0.7%
	Expected term in years(e)		2.9	2.9
Weighted-average fair value estimates at grant date(f):
	In millions	$	5.7	2.6
	Fair value per share	$	30.71	30.87

• The beginning average price of Brink's common stock was based on the 20-day trading average price from December 3, 2013 to December 31, 2013.
• The expected dividend yield for the TSR provision of the PSU awards assumes that dividends are reinvested. The stock price projection assumes a 0% dividend yield, which is equivalent to reinvesting dividends over the performance period.
• The expected yield is 0% because neither the PSUs nor the MSUs are entitled to dividends during the performance period.
• The expected volatility was estimated after reviewing the historical volatility of our stock using daily close prices.
• The expected term of the awards was based on the performance measurement period ending December 31, 2016.
• For PSUs, the grant date fair value is based on the target level of the award. Total compensation cost of the PSUs recognized is subject to adjustment based on the actual level of achievement of the underlying financial goal.

The following tables below summarize the activity in all plans for PSUs, MSUs, RSUs and DSUs.

Nonvested Share Activity - MSUs and PSUs
			Number of shares				Weighted-Average
							Grant-Date
	(in thousands of shares, except for per share amounts)		PSUs	MSUs	Total		Fair Value
	Balance as of December 31, 2013		199.3	96.2	295.5	$	26.28
	Granted		186.8	82.9	269.7		30.76
	Cancelled awards		(1.7)	-	(1.7)		26.22
		Balance as of March 31, 2014	384.4	179.1	563.5	$	28.42

Nonvested Share Activity - RSUs and DSUs
			Number of shares				Weighted-Average
							Grant-Date
	(in thousands of shares, except for per share amounts)		RSUs	DSUs	Total		Fair Value
	Balance as of December 31, 2013		396.4	19.2	415.6	$	24.68
	Granted		128.7	-	128.7		30.20
	Cancelled awards		(3.7)	-	(3.7)		24.63
	Vested		(10.4)	-	(10.4)		30.48
		Balance as of March 31, 2014	511.0	19.2	530.2	$	25.91