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. 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. In the years 2013 to 2018 the plan participants also received an additional share free of cost (matching share) for each investment share held at the end of the blocking period. 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. 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. The PSUs that would have vested in 2019 were not awarded as the performance targets were not achieved.

In 2019, the new Clariant Long-Term Incentive Plan (CLIP) was introduced with the first grants in April 2019. The CLIP represents an equity-based award in the form of Performance Share Units with a three-year vesting period. The review of the target achievements (vesting criteria) for this plan will be held in summer 2022 and vesting is scheduled to take place in September 2022.

The expense recorded in the income statement and in equity 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 2019, CHF 4 million were debited to the income statement for equity-settled share-based payments (2018: income of CHF 3 million).

As of 31 December 2019, the total carrying value of liabilities arising from equity-settled share-based payments, entirely recognized in equity, is CHF 20 million (2018: CHF 14 million).

The fair value of shares granted during 2019 is CHF 17 million (2018: CHF 10 million) calculated based on market value of shares at grant date.

No options were granted in 2019 and 2018.