Under the Group Senior Management – Long-Term Incentive Plan (GSM-LTIP) a certain percentage of the actual bonus is granted to the plan participants in the form of registered shares of Clariant Ltd (investment shares). These shares vest immediately upon grant, but are subject to a three-year blocking period. The plan participants receive an additional share free of cost (matching share) for each investment share held at the end of the blocking period.

These shares were granted for the first time in 2011, based on the performance achieved in the base year 2010. Similar plans were launched in all subsequent years. The number of shares not yet vested and thus disclosed are the matching shares already granted.

For the first time in 2013, the Performance Share Unit (PSU) Plan was introduced for all senior managers to replace the former Tradable Option Plan. The term of Clariant’s Performance Share Unit Plan is a three-year vesting period. The vesting is conditional upon achievement of the performance targets at the end of the vesting period. If the performance targets are achieved, each PSU will be converted into one Clariant share.

A new grant took place in September 2018. The review of the target achievements (vesting criteria) for this plan will be held in summer 2021 and vesting is scheduled to take place in September 2021.

The expense recorded in the income statement spreads the costs of each grant over the measurement period and the vesting period. Assumptions are made concerning the forfeiture rate which is adjusted during the vesting period so that at the end of the vesting period there is only a charge for the vested amounts.

In 2018, CHF 3 million were credited to the income statement for equity-settled share-based payments (2017: expense of CHF 9 million). Some accruals in equity for share based payments were reversed, as the key performance indicators were not met.

As of 31 December 2018, the total carrying value of liabilities arising from equity-settled share-based payments, entirely recognized in equity, is CHF 14 million (2017: CHF 25 million).

As per 31 December 2017 and 2018, no further options were outstanding for members of the management and the executive committee.

* Options exercised in 2017 included 355 800 options pertaining to the 2011 and 2012 option plans, which were sold by the plan participants in the market. In the meantime all option plans have expired.

The fair value of shares granted during 2018 is CHF 10 million (2017: CHF 20 million) calculated based on market value of shares at grant date.

No options were granted in 2018 and 2017.