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Notes to the Consolidated Financial Statements
O Heineken N.V. Report of the Report of the Financial Sustainability Other
O \J Annual Report 2020 Introduction Executive Board Supervisory Board Statements Review Information
The grant date, fair market value (FMV) at grant date, service period and vesting date for the LTIP are
visualised below:
Overview LTIP
LTI Plan 31-12-2017 31-12-2018 31-12-2019 31-12-2020 31-12-2021 31-12-2022
2018-2020 grant date
FMV €82.46
performance period
^3 vesting date
2019-2021
grant date
FMV €72.48
performance period
HO vesting date
2020-2022
grant date
FMV €90.11
performance period
Total LTIP expenses
recognised in 2020
^3 vesting date
The number of outstanding share rights and the movement over the year under the LTIP of the Executive
Board and senior management are as follows:
Number of share
Number of share
rights 2020
rights 2019
Outstanding as at 1 January
1,746,018
2,047,880
Granted during the year
457,906
531,949
Forfeited during the year
(104,002)
(157,276)
Vested previous year
(764,496)
(617,012)
Performance adjustment
(483,737)
(59,523)
Outstanding as at 31 December
851,689
1,746,018
Share price as at 31 December
91.22
94.92
In response to the impact of the COVID-19 pandemic on HEINEKEN's business, the LTI awards made under
the 2018-2020 LTIP for the Executive Board will not vest. The cancellation of the 2018-2020 LTIP did not result
in any settlements nor was it replaced with an alternative plan.
Other share-based compensation plans
Under the Extraordinary share plans for senior management, in 2020 24,100 shares were granted
and 1,500 (gross) shares vested. These extraordinary grants only have a service condition and vest between
one and five years. The expenses relating to these additional grants are recognised in profit or loss during the
vesting period. In 2020, expenses amounted to €1 million (2019: €0.2 million).
Personnel expenses
The total share-based compensation income that is recognised in 2020 amounts to €1 million
(2019: €31 million share-based compensation expense).
In millions of
Note
2020
2019
Share rights granted in 2017
13
Share rights granted in 2018
(21)
8
Share rights granted in 2019
4
10
Share rights granted in 2020
16
Total expense recognised in personnel expenses
6.4
(1)
31
Accounting estimates
The grant date fair value is calculated by adjusting the share price at grant date for estimated foregone
dividends during the performance period, as the participants are not entitled to receive dividends during that
period. The foregone dividends are estimated by applying HEINEKEN's dividend policy on the latest forecasts
of net profit (beia).
At each balance sheet date, HEINEKEN uses its latest forecasts to calculate the expected realisation on
the performance targets per plan. The number of shares are adjusted to the new target realisation and
HEINEKEN increases/decreases the total plan cost. The cumulative effect is recorded in the profit or loss, with
a corresponding adjustment to equity.
Expenses related to employees that voluntarily leave HEINEKEN are reversed as they will not receive any
shares from the LTIP. The expense calculation includes the estimated future forfeiture. HEINEKEN uses
historical information to estimate this forfeiture rate.
Accounting policies
HEINEKEN's share-based compensation plans are equity-settled share rights granted to the Executive Board
and senior management.
The grant date fair value is calculated by deducting expected foregone dividends from the grant date during
the performance period share price. The costs of the share plans are adjusted for expected performance and
forfeiture and spread evenly over the service period.
Share-based compensation expenses are recorded in the profit or loss, with a corresponding adjustment
to equity.
Matching shares granted to the Executive Board are disclosed in note 13.3.
