For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
9 Employees including Directors continued Key management
The key management of the Group comprises GKN plc Board Directors and members of the Group’s Executive Committee during the year and their aggregate compensation is shown below. More detailed disclosure on Directors’ remuneration is set out in the Directors’ remuneration report.
Key management compensation
2015 £m 2014 £m
Salaries and short-term employee benefits Post-employment benefits Share-based and medium-term incentives and benefits
7.3 0.4 0.3 8.0
6.8 0.3 1.4 8.5
The amount outstanding at 31 December 2015 in respect of annual short-term variable remuneration payable in cash was £2.0 million (2014: £1.5 million). Key management participate in certain incentive arrangements where the key performance metric is management earnings per share using the cash tax rate which is discussed in the Strategic Report. Management EPS using the cash tax rate is 30.4p (2014: 32.1p). A total of £331,136 in dividends was received by key management in 2015 (2014: £267,158).
10 Share-based payments
The Group has granted options over shares to employees for a number of years under different schemes. Where grants were made after 7 November 2002 they have been accounted for as required by IFRS 2 ‘Share-based payment’. Details of awards made since 7 November 2002 that impact the 2015 accounting charge are:
Sustainable Earnings Plan (SEP)
Awards comprising Core and Sustainability Awards were made to Directors and certain senior employees in August 2012, March 2013, March 2014 and March 2015. Core and Sustainability Awards are subject to performance targets with Core Awards subject to achievement of EPS growth targets over an initial three year performance period and Sustainability Awards subject to the highest level of EPS attained in any year during the core performance period being achieved or exceeded in years four and five. Sustainability Awards will be reduced to the extent that the target in the core performance period has not been met. Sustainability Awards are measured independently in years four and five. 50% of Core Awards will be released at the end of year three; the balance of Core Awards and any Sustainability Awards will be released at the end of year five. There is no provision for retesting performance for either the Core or Sustainability Awards. On vesting, dividends are treated as having accrued on the shares from the date of grant to the date of release with the value delivered in either shares or cash. Details of SEP awards (Core Award and Sustainability Awards) granted during the year are set out below:
Weighted average fair Shares value at granted during measurement date year
2015 SEP awards The fair value of shares awarded under the SEP is calculated as the share price on the grant date.
Share Incentive and Retention Plan (SIRP)
Performance Awards and in some cases Restricted Awards were made to certain senior employees in October 2015. Performance Awards are subject to both a management profit before tax target over a two year performance period and a one year retention period. 50% of the Performance Awards will be measured in the first year of the performance period and 50% in the second year. There is no provision for retesting of performance for the Performance Awards. Restricted Awards will normally be released at the end of a specified deferral period provided that the participant is still employed by GKN. The Restricted Awards are not subject to any performance conditions although they will lapse in the event of resignation during the deferral period. Any awards under the SIRP will be satisfied from shares held in the Employee Share Ownership Plan Trust.
GKN plc Annual Report and Accounts 2015