17. Participation plans

Share plans

In 2022, employees were able to purchase a defined number of shares at a discount of 50% (PY: 45%) compared to the market price (“Employee share purchase plan”). Geberit management was entitled to draw the previous year’s variable remuneration partly or entirely in shares valued at market price (“Management share purchase plan”). For each of these shares, management participants received 2 options (see part 2: “Option plans”). The members of the Board of Directors received a significant part of their compensation for 2021 in shares of Geberit AG (measured at current market value). All share plans are subject to blocking periods valid beyond the period of employment.

The share plans introduced in 2022 are summarised below:

The 39,952 shares required for these plans were taken from the stock of treasury shares.

As at 31 December 2022, the Board of Directors, the Group Executive Board and the employees owned a combined total of 411,998 (PY: 407,722) shares, i.e. 1.1% (PY: 1.1%) of the share capital of Geberit AG under these plans.

Option plans

The management has the opportunity to invest part or all of their variable remuneration in shares of Geberit AG through the management share purchase plan (MSPP). They may define a fixed number of shares to purchase, or a certain amount or a percentage of their variable remuneration to be invested in shares. In order to encourage management to participate in the program in 2022, two free options are provided for each share purchased through the program. These options are subject to a vesting period of three years.

In connection with an additional option plan (MSOP), the members of the Group Executive Board and managing directors are entitled to additional options. The options are subject to a vesting period of three years.

The exercise price of the options corresponds to the fair market value of the Geberit shares at the time of granting. The options have a term of ten years (MSPP & MSOP). They can be exercised between the vesting date and the maturity date. The vesting of share options is subject to the achievement of a performance criterion – the average Return on Invested Capital (ROIC) – over the respective vesting period.

The following numbers of options out of the 2022 grant are allocated with final effect at the end of the vesting period¹:

The fair value per options granted in 2022 as at March 2022 amounted on average to CHF 49.21 (PY: CHF 37.91) for MSPP and CHF 49.21 (PY: CHF 37.91) for MSOP at the respective granting date. The fair value was determined using the binomial model for “American Style Call Options”.

The calculation model was based on the following parameters:

The following table summarises all option plans in place as at 31 December 2022¹²:

This table also includes options under participation plans from earlier years that have different terms and vesting conditions.

The following movements took place in 2022 and 2021¹²:

This table also includes options under participation plans from earlier years that have different terms and vesting conditions.

The numbers of the options of the plans 2019–2021 were changed to the effective number of options granted, which however has no impact on the financial statements of the Group.

The 1,154,876 options outstanding represent 3.2% of the outstanding shares of Geberit AG. In principle, the Group hedges this exposure with treasury shares.

The options outstanding as at 31 December 2022 had an exercise price of between CHF 361.75 and CHF 584.10 and an average remaining contractual life of 6.5 years (PY: 6.8 years).

Costs resulting from share plans amounted to MCHF 6.1 in 2022 (PY: MCHF 5.3); those for option plans totalled MCHF 9.7 (PY: MCHF 6.4).