XML 311 R38.htm IDEA: XBRL DOCUMENT v3.22.0.1
Share-based payments
 12 Months Ended
Dec. 31, 2021
Text Block [Abstract]  
Share-based payments
28. Share-based payments
Annual Performance Plan
Under the IHG Annual Performance Plan (‘APP’), eligible employees (including Executive Directors) can receive all or part of their bonus in the form of deferred shares and/or receive
one-off
awards of shares. Deferred shares are released on the third anniversary of the award date. Under the terms of awards that are referred to in this note, a fixed percentage of the award is made in the form of shares. Awards under the APP are conditional on the participants remaining in the employment of a participating company or leaving for a qualifying reason as per the plan rules. The grant of deferred shares under the APP is at the discretion of the Remuneration Committee.
The number of shares is calculated by dividing a specific percentage of the participant’s annual performance-related award by the average of the middle market quoted prices on the three consecutive business days following the announcement of the Group’s results for the relevant financial year.
Long Term Incentive Plan
The Long Term Incentive Plan (‘LTIP’) allows Executive Directors and eligible employees to receive conditional share awards, which normally have a vesting period of three years. In addition, certain awards to Executive Directors are subject to a further
two-year
holding period after vesting.
Performance-related awards:
Executive Directors, and other eligible employees, are granted share awards containing performance-based vesting conditions set by the Remuneration Committee, which are normally measured over the vesting period.
Restricted stock units:
Awards to eligible employees are granted subject to continued employment.
Awards are normally made annually and, except in exceptional circumstances, will not exceed 3.5 times salary for eligible employees.
Colleague Share Plan
The Colleague Share Plan gives eligible corporate employees the opportunity to purchase shares up to an annual limit of $1,000 (or local currency equivalent limit) or such other amount determined by the Board or its duly authorised committee. After the end of the plan year, the participant will be awarded the right to receive one matching share for every purchased share (subject to continued employment). If the participant holds the purchased shares until the second anniversary of the end of the plan year, the conditional right to matching shares vests. During the year, 31,234 (2020: 36,298, 2019: nil) shares were purchased by participating employees. Matching shares were awarded for the first cycle in 2021 and will vest after 12 months.
The total fair value of the Colleague Share Plan is not significant.
 
  
More detailed information on the performance measures for awards to Executive Directors is shown in the Directors’ Remuneration Report on pages 104 to 125.
Costs relating to share-based payment transactions
 
         
            2021
$m
         
            2020
$m
         
            2019
$m
  
Equity-settled
       
 
 
 
       
 
 
 
       
 
 
 
Operating profit before System Fund and exceptional items
       
 
26
 
       
 
19
 
       
 
28
 
Operating exceptional items
       
 
–
 
       
 
–
 
       
 
1
 
System Fund
       
 
13
 
       
 
11
 
       
 
12
 
 
       
 
39
 
       
 
30
 
       
 
41
 
Cash-settled
       
 
 
 
       
 
 
 
       
 
 
 
Operating profit before System Fund and exceptional items
       
 
2
 
       
 
2
 
       
 
2
 
 
       
 
41
 
       
 
32
 
       
 
43
 
No consideration was received in respect of ordinary shares issued under option schemes during 2021, 2020 or 2019.
The Group uses separate option pricing models and assumptions depending on the plan.
 
                                  
APP
                                   
LTIP
  
                                         
Monte Carlo Simulation and
  
        
Binomial valuation model
         
Binomial valuation model
  
         
             2021
         
             2020
         
             2019
         
             2021
         
             2020
         
             2019
  
Weighted average share price (pence)
       
 
5,009.0
 
       
 
3,771.0
 
       
 
4,597.0
 
       
 
4,980.0
 
       
 
3,450.0
 
       
 
4,850.0
 
Expected dividend yield
       
 
 
 
       
 
 
 
       
 
 
 
       
 
1.11%
 
       
 
1.48%
 
       
 
2.16%
 
Risk-free interest rate
       
 
 
 
       
 
 
 
       
 
 
 
       
 
0.09%
 
       
 
0.02%
 
       
 
0.72%
 
Volatility
a
      
 
 
 
       
 
 
 
       
 
 
 
       
 
43%
 
       
 
33%
 
       
 
19%
 
Term (years)
       
 
1.5
 
       
 
3.0
 
       
 
3.0
 
       
 
3.0
 
       
 
3.0
 
       
 
3.0
 
Movements in the awards outstanding under the schemes are as follows:
 
        
APP
                  
LTIP
  
         
        Number of shares
thousands
           
Performance-related

awards
        Number of shares
thousands
    
Restricted
stock units
        Number of shares
thousands
  
Outstanding at 1 January 2019
       
 
591
 
           
 
1,088
 
  
 
1,301
 
Granted
       
 
217
 
           
 
287
 
  
 
540
 
Vested
       
 
(276
) 
           
 
(293
) 
  
 
(422
) 
Share capital consolidation
       
 
(21
) 
           
 
–
 
  
 
–
 
Lapsed or cancelled
       
 
(15
) 
           
 
(387
) 
  
 
(144
) 
Outstanding at 31 December 2019
       
 
496
 
           
 
695
 
  
 
1,275
 
Granted
       
 
138
 
           
 
383
 
  
 
696
 
Vested
       
 
(188
) 
           
 
(179
) 
  
 
(413
) 
Lapsed or cancelled
       
 
(33
) 
           
 
(85
) 
  
 
(137
) 
Outstanding at 31 December 2020
       
 
413
 
           
 
814
 
  
 
1,421
 
Granted
       
 
90
 
           
 
281
 
  
 
442
 
Vested
       
 
(147
) 
           
 
(70
) 
  
 
(391
) 
Lapsed or cancelled
       
 
(8
) 
           
 
(153
) 
  
 
(122
) 
Outstanding at 31 December 2021
       
 
348
 
           
 
872
 
  
 
1,350
 
           
Fair value of awards granted during the year (cents)
       
 
 
 
           
 
 
 
  
 
 
 
2021
       
 
6,888.5
 
           
 
4,676.3
 
  
 
6,559.7
 
2020
       
 
4,965.9
 
           
 
2,473.5
 
  
 
4,397.5
 
2019
       
 
5,888.7
 
           
 
4,985.6
 
  
 
5,862.1
 
           
Weighted average remaining contract life (years)
       
 
 
 
           
 
 
 
  
 
 
 
At 31 December 2021
       
 
0.5
 
           
 
1.2
 
  
 
1.2
 
At 31 December 2020
       
 
1.0
 
           
 
1.4
 
  
 
1.3
 
At 31 December 2019
       
 
1.1
 
           
 
1.3
 
  
 
1.2
 
The above awards do not vest until the performance and service conditions have been met.
The weighted average share price at the date of exercise for share awards vested during the year was 5,081.2p (2020: 4,874.5p). The closing share price on 31 December 2021 was 4,781.0p and the range during the year was 4,399.0p to 5,336.0p.