NOTE F33 Share-based payments

Stock Option Plan

As every year since 1999, in 2019, the Board of Directors renewed the share option plan offered to executive staff (51 beneficiaries) with a view to involving them more closely in the long-term development of the Group. The plan is an equity-settled share-based plan. The majority of the managers involved subscribed to the options offered to them in 2019 with an exercise price of € 97.05 representing the average stock market price of the share for the 30 days prior to the offer.

At the end of December 2019, the Group held 2,465,766 treasury shares, which have been deducted from consolidated shareholders’ equity.

In 2019, the share options resulted in an expense of € 11 million, which was calculated by third parties according to the Black-Scholes model, and recognized in the consolidated income statement as part of administrative costs.

The valuation of the stock option plan of 2019 is based on:

• the price of the underlying asset (Solvay share): € 100.05 at February 27, 2019;
• the time outstanding until the option maturity: exercisable from January 1, 2023, until February 27, 2027, taking into account the fact that some of them will be exercised before the option maturity;
• the option exercise price: € 97.05;
• the risk-free return: 0.39% (on average);
• the volatility of the underlying yield, estimated based on the option price: 23.00%;
• a dividend yield of 3.03%.

Weighted average remaining contractual life:

Performance Share Units Plan (PSU)

Since 2013, the Board of Directors renewed a yearly Performance Share Unit Plan, offered to executive staff with the objective of involving them more closely in the development of the Group, making this part of the long term incentive policy. All the managers involved subscribed the PSU offered to them in 2019 with a grant price of € 97.05. The Performance Share Units is a cash-settled share-based plan through which beneficiaries will obtain a cash benefit based on the Solvay share price, as well as performance conditions and accrued dividends.

Each plan has a 3-year vesting period, after which a cash settlement will take place, if vesting conditions will have been met.