Cherries
oil on canvas
22 x 20 in
1981
Penny Machines
oil on canvas
23¾ x 29¾ in
1961
Stack of Books
oil on canvas
30 x 24 in
n.d.
Seven Suckers
oil on canvas
19 x 23 in
1970
Twin Jackpots
oil on canvas
30 x 46 in
1962
Ties
oil on canvas
20 x 26 in
1980
Notes 26 - 31
- 26. Authorised and issued share capital
- 27. Other reserves
- 28. Acquisitions
- 29. Principal subsidiary undertakings
- 30. Related party transactions
- 31. Reconciliation to non-GAAP measures of performance
26. Authorised and issued share capital
| Equity ordinary shares | Nominal value £m |
|
|---|---|---|
| Authorised | ||
| 1 January 2008 – WPP 2008 Limited (formerly WPP Group plc) | 1,750,000,000 | 175.0 |
| 31 December 2008 – WPP plc (formerly Project Air Limited) | 1,750,000,000 | 175.0 |
| 31 December 2009 – WPP plc (formerly Project Air Limited) | 1,750,000,000 | 175.0 |
| Issued and fully paid | ||
| 1 January 2008 | 1,191,491,263 | 119.2 |
| Exercise of share options | 2,103,054 | 0.2 |
| Acquisitions | 77,879,143 | 7.8 |
| Share cancellations | (18,820,814) | (1.9) |
| 19 November 2008 – shares in WPP 2008 Limited (formerly WPP Group plc) of 10p each | 1,252,652,646 | 125.3 |
| On formation of WPP plc | ||
| Group reconstruction – shares in WPP 2008 Limited (formerly WPP Group plc) exchanged for shares in WPP plc of 10p each | 1,252,652,646 | 125.3 |
| Exercise of share options | 49,827 | 0.0 |
| Acquisitions | 2,640,790 | 0.2 |
| 31 December 2008 | 1,255,343,263 | 125.5 |
| Exercise of share options | 1,148,051 | 0.1 |
| 31 December 2009 | 1,256,491,314 | 125.6 |
On 19 November 2008 under a scheme of arrangement between WPP 2008 Limited (formerly WPP Group plc), the former holding company of the Group, and its shareholders under Part 26 of the Companies Act 2006, and as sanctioned by the High Court, all the issued shares in that company were cancelled and the same number of new shares were issued to WPP plc in consideration for the allotment to shareholders of one ordinary share in WPP plc for each ordinary share in WPP 2008 Limited held on the record date, 18 November 2008.
In the above table the figures up to 19 November 2008 relate to shares in WPP 2008 Limited. Subsequent movements relate to shares in WPP plc.
WPP plc was incorporated on 12 September 2008 with an authorised share capital of £10,000 and 20 issued ordinary shares of 10 pence each. The authorised share capital of WPP plc was increased by written resolution from £10,000 to £175,000,000 by the creation of an additional 1,749,900,000 ordinary shares of 10 pence each.
On 19 November 2008 as part of the scheme of arrangement noted above, a further 1,252,652,646 ordinary shares were issued at a price of 340.75 pence each, whereby WPP plc became the new holding company of the WPP Group.
On 24 November 2008 the entire balance standing to the credit of the share premium account was transferred to retained earnings as sanctioned by The Royal Court of Jersey. As a result £4,143.1 million was added to retained earnings for both WPP plc and the Group. For the Company this amount is distributable.
Company’s own shares
The Company’s holdings of own shares are stated at cost and represent shares held in treasury and purchases by the Employee Share Ownership Plan (‘ESOP’) trusts of shares in WPP plc for the purpose of funding certain of the Group’s share-based incentive plans, details of which are disclosed in the Compensation Committee report.
The trustees of the ESOP purchase the Company’s ordinary shares in the open market using funds provided by the Company. The Company also has an obligation to make regular contributions to the ESOP to enable it to meet its administrative costs. The number and market value of the ordinary shares of the Company held by the ESOP at 31 December 2009 was 24,941,529 (2008: 33,167,446), and £152.0 million (2008: £133.5 million) respectively. The number and market value of ordinary shares held in treasury at 31 December 2009 was 2,435,288 (2008: nil) and £14.8 million (2008: £nil million) respectively.
Share options
| WPP Executive Share Option Scheme As at 31 December 2009, unexercised options over ordinary shares of 8,957,974 and unexercised options over ADRs of 2,918,784 have been granted under the WPP Executive Share Option Scheme as follows: |
||
|---|---|---|
| Number of ordinary shares under option | Exercise price per share (£) | Exercise dates |
| 12,195 | 3.414 | 2012 - 2018 |
| 21,197 | 3.763 | 2006 - 2013 |
| 72,551 | 4.210 | 2005 - 2012 |
| 906,872 | 4.210 | 2005 - 2012 |
| 15,329 | 4.210 | 2006 - 2012 |
| 30,658 | 4.210 | 2005 - 2013 |
| 3,832 | 4.210 | 2005 - 2012 |
| 32,385 | 4.210 | 2005 - 2012 |
| 3,065 | 4.210 | 2005 - 2012 |
| 3,832 | 4.210 | 2005 - 2012 |
| 77,552 | 4.438 | 2005 - 2012 |
| 6,759 | 4.438 | 2005 - 2012 |
| 41,170 | 4.615 | 2006 - 2013 |
| 51,247 | 4.615 | 2007 - 2013 |
| 38,022 | 4.865 | 2004 - 2011 |
| 674,431 | 4.865 | 2004 - 2011 |
| 10,519 | 4.865 | 2005 - 2011 |
| 2,000,000 | 5.490 | 2007 - 2014 |
| 27,288 | 5.520 | 2008 - 2014 |
| 155,562 | 5.535 | 2007 - 2014 |
| 916,167 | 5.535 | 2007 - 2014 |
| 675,059 | 5.535 | 2007 - 2014 |
| 21,929 | 5.535 | 2008 - 2014 |
| 6,124 | 5.535 | 2007 - 2015 |
| 24,390 | 5.535 | 2007 - 2014 |
| 2,469 | 5.535 | 2007 - 2014 |
| 227,947 | 5.535 | 2007 - 2014 |
| 189,644 | 5.595 | 2006 - 2013 |
| 1,334,633 | 5.595 | 2006 - 2013 |
| 17,194 | 5.595 | 2006 - 2014 |
| 23,775 | 5.595 | 2007 - 2013 |
| 7,987 | 5.595 | 2006 - 2013 |
| 24,680 | 5.595 | 2006 - 2013 |
| 277,848 | 5.595 | 2006 - 2013 |
| 2,902 | 5.725 | 2007 - 2014 |
| 4,838 | 5.725 | 2007 - 2014 |
| 11,423 | 5.775 | 2009 - 2015 |
| 14,826 | 5.818 | 2008 - 2015 |
| 2,964 | 5.818 | 2008 - 2015 |
| 6,705 | 5.895 | 2008 - 2015 |
| 6,705 | 5.895 | 2008 - 2015 |
| 2,235 | 5.895 | 2008 - 2015 |
| 10,907 | 5.895 | 2008 - 2015 |
| 4,268 | 5.903 | 2011 - 2018 |
| 6,402 | 5.903 | 2011 - 2018 |
| 4,268 | 5.903 | 2011 - 2018 |
| 11,396 | 6.105 | 2008 - 2015 |
| 4,914 | 6.105 | 2008 - 2015 |
| 7,876 | 6.228 | 2011 - 2017 |
| 2,140 | 6.718 | 2009 - 2016 |
| 8,560 | 6.718 | 2009 - 2016 |
| 23,480 | 6.718 | 2009 - 2016 |
| 69,369 | 6.718 | 2009 - 2016 |
| 19,566 | 6.718 | 2011 - 2016 |
| 2,062 | 6.938 | 2009 - 2016 |
| 45,153 | 7.180 | 2005 - 2012 |
| 26,367 | 7.550 | 2005 - 2012 |
| 21,879 | 7.550 | 2005 - 2012 |
| 34,921 | 7.550 | 2005 - 2012 |
| 214,432 | 7.550 | 2005 - 2012 |
| 3,741 | 7.550 | 2006 - 2012 |
| 12,696 | 7.723 | 2010 - 2017 |
| 19,836 | 8.110 | 2004 - 2011 |
| 32,934 | 8.110 | 2004 - 2011 |
| 4,929 | 8.193 | 2004 - 2011 |
| 14,446 | 8.193 | 2004 - 2011 |
| 253,102 | 9.010 | 2003 - 2010 |
| 6,314 | 9.010 | 2004 - 2010 |
| 78,162 | 9.010 | 2003 - 2010 |
| 18,540 | 10.770 | 2003 - 2010 |
| 8,404 | 10.770 | 2003 - 2010 |
| Number of ADRs under option | Exercise price per ADR ($) | Exercise dates |
|---|---|---|
| 3,844 | 26.010 | 2012 - 2019 |
| 2,825 | 30.080 | 2006 - 2013 |
| 2,692 | 30.080 | 2006 - 2013 |
| 1,644 | 30.410 | 2011 - 2018 |
| 441,626 | 33.200 | 2005 - 2012 |
| 4,517 | 33.200 | 2005 - 2012 |
| 2,881 | 34.702 | 2005 - 2012 |
| 271,166 | 35.380 | 2004 - 2011 |
| 785,606 | 47.410 | 2006 - 2013 |
| 27,520 | 47.410 | 2006 - 2013 |
| 34,472 | 47.410 | 2006 - 2013 |
| 1,548 | 48.450 | 2007 - 2014 |
| 13,513 | 50.670 | 2008 - 2015 |
| 197 | 50.670 | 2008 - 2015 |
| 818,468 | 50.800 | 2007 - 2014 |
| 196 | 50.800 | 2007 - 2014 |
| 12,398 | 50.800 | 2007 - 2014 |
| 2,952 | 50.800 | 2007 - 2014 |
| 35,818 | 50.800 | 2007 - 2014 |
| 30,060 | 51.220 | 2007 - 2014 |
| 14,280 | 53.030 | 2005 - 2012 |
| 12,099 | 54.050 | 2005 - 2012 |
| 104,431 | 54.050 | 2005 - 2012 |
| 458 | 54.570 | 2008 - 2015 |
| 4,581 | 54.570 | 2008 - 2015 |
| 6,550 | 55.740 | 2008 - 2015 |
| 898 | 55.740 | 2008 - 2015 |
| 898 | 55.740 | 2008 - 2015 |
| 2,691 | 57.020 | 2008 - 2015 |
| 14,925 | 57.020 | 2008 - 2015 |
| 6,976 | 57.338 | 2003 - 2010 |
| 13,693 | 58.238 | 2004 - 2011 |
| 856 | 58.460 | 2009 - 2016 |
| 14,113 | 58.460 | 2009 - 2016 |
| 856 | 58.460 | 2009 - 2016 |
| 8,460 | 58.886 | 2004 - 2011 |
| 844 | 59.170 | 2011 - 2018 |
| 1,267 | 59.170 | 2011 - 2018 |
| 28,535 | 62.110 | 2003 - 2010 |
| 2,415 | 62.110 | 2005 - 2010 |
| 796 | 62.810 | 2010 - 2017 |
| 163,911 | 63.263 | 2003 - 2010 |
| 312 | 63.900 | 2009 - 2016 |
| 1,641 | 63.900 | 2009 - 2016 |
| 2,007 | 74.720 | 2010 - 2017 |
| 4,936 | 75.940 | 2010 - 2017 |
| 11,412 | 84.485 | 2003 - 2010 |
| WPP Worldwide Share Ownership Program As at 31 December 2009, unexercised options over ordinary shares of 7,988,371 and unexercised options over ADRs of 1,120,999 have been granted under the WPP Worldwide Share Ownership Program as follows: |
||
|---|---|---|
| Number of ordinary shares under option | Exercise price per share (£) | Exercise dates |
| 167,350 | 3.903 | 2006 - 2013 |
| 2,400 | 3.903 | 2006 - 2013 |
| 3,600 | 3.903 | 2007 - 2013 |
| 7,725 | 4.210 | 2005 - 2012 |
| 1,250 | 4.210 | 2005 - 2013 |
| 46,830 | 4.819 | 2011 - 2018 |
| 750 | 5.210 | 2004 - 2011 |
| 296,775 | 5.435 | 2007 - 2014 |
| 1,788,700 | 5.483 | 2012 - 2019 |
| 61,875 | 5.483 | 2012 - 2016 |
| 15,649 | 5.483 | 2012 - 2020 |
| 18,250 | 5.483 | 2013 - 2019 |
| 315,256 | 5.483 | 2013 - 2019 |
| 159,125 | 5.608 | 2012 - 2019 |
| 60,625 | 5.608 | 2012 - 2019 |
| 6,375 | 5.775 | 2008 - 2015 |
| 30,600 | 5.913 | 2011 - 2018 |
| 117,472 | 5.917 | 2011 - 2018 |
| 2,625 | 5.990 | 2004 - 2011 |
| 1,275,833 | 6.028 | 2011 - 2018 |
| 713,875 | 6.195 | 2008 - 2015 |
| 6,972 | 6.668 | 2008 - 2017 |
| 87,581 | 6.740 | 2009 - 2016 |
| 807,207 | 6.938 | 2009 - 2016 |
| 30,033 | 7.005 | 2010 - 2017 |
| 325,350 | 7.180 | 2005 - 2012 |
| 6,375 | 7.180 | 2006 - 2012 |
| 93,280 | 7.478 | 2011 - 2017 |
| 974,258 | 7.718 | 2010 - 2017 |
| 315,900 | 7.790 | 2003 - 2010 |
| 248,475 | 7.960 | 2004 - 2011 |
| Number of ADRs under option | Exercise price per ADR ($) | Exercise dates |
|---|---|---|
| 33,490 | 30.800 | 2006 - 2013 |
| 344,292 | 44.560 | 2012 - 2019 |
| 43,545 | 49.880 | 2007 - 2014 |
| 25,305 | 53.030 | 2005 - 2012 |
| 24,720 | 56.480 | 2004 - 2011 |
| 233,006 | 59.500 | 2011 - 2018 |
| 101,325 | 59.520 | 2008 - 2015 |
| 138,084 | 60.690 | 2009 - 2016 |
| 177,232 | 75.760 | 2010 - 2017 |
| Young & Rubicam Inc 1997 Incentive Compensation Plan As at 31 December 2009, unexercised options over ordinary shares of 133,811 and unexercised options over ADRs of 145,773 have been granted under the Young & Rubicam Inc 1997 Incentive Compensation Plan as follows: |
||
|---|---|---|
| Number of ordinary shares under option | Exercise price per share (£) | Exercise dates |
| 133,811 | 7.0523 | 2000 - 2010 |
| Number of ADRs under option | Exercise price per ADR ($) | Exercise dates |
|---|---|---|
| 11,481 | 48.2036 | 2000 - 2010 |
| 121,014 | 51.0479 | 2000 - 2010 |
| 6,263 | 60.4790 | 2000 - 2010 |
| 2,923 | 63.7725 | 2000 - 2010 |
| 1,587 | 72.6048 | 2000 - 2010 |
| 2,505 | 84.7305 | 2000 - 2010 |
| Tempus Group plc 1998 Long Term Incentive Plan As at 31 December 2009, unexercised options over ordinary shares of 56,468 have been granted under the Tempus Group plc 1998 Long Term Incentive Plan as follows: |
||
|---|---|---|
| Number of ordinary shares under option | Exercise price per share (£) | Exercise dates |
| 24,306 | 4.920 | 2001 - 2011 |
| 12,153 | 5.580 | 2001 - 2011 |
| 20009 | 6.000 | 2001 - 2010 |
| The Grey Global Group, Inc 1994 Stock Incentive Plan As at 31 December 2009, unexercised options over ordinary shares of 54,365 and unexercised options over ADRs of 67,717 have been granted under the Grey Global Group, Inc 1994 Stock Incentive Plan as follows: |
||
|---|---|---|
| Number of ordinary shares under option | Exercise price per share (£) | Exercise dates |
| 54,365 | 3.499 | 2007 - 2011 |
| Number of ADRs under option | Exercise price per ADR ($) | Exercise dates |
|---|---|---|
| 3,414 | 19.5400 | 2005 - 2010 |
| 7,089 | 28.2100 | 2006 - 2013 |
| 1,827 | 28.3000 | 2007 - 2012 |
| 4,545 | 29.4100 | 2005 - 2011 |
| 7,046 | 30.2700 | 2008 - 2011 |
| 3,632 | 30.8300 | 2007 - 2012 |
| 6,371 | 31.4200 | 2005 - 2012 |
| 17,396 | 31.7500 | 2008 - 2011 |
| 6,264 | 31.9400 | 2007 - 2011 |
| 10,133 | 36.1100 | 2008 - 2010 |
| 24/7 Real Media, Inc 2002 Stock Incentive Plan As at 31 December 2009, unexercised options over ADRs of 123,241 have been granted under the 24/7 Real Media, Inc. 2002 Stock Incentive Plan as follows: |
||
|---|---|---|
| Number of ADRs under option | Exercise price per ADR ($) | Exercise dates |
| 8 | 1.3400 | 2007 - 2013 |
| 715 | 15.8800 | 2007 - 2014 |
| 427 | 17.1500 | 2007 - 2014 |
| 30 | 19.3700 | 2007 - 2015 |
| 151 | 19.4400 | 2007 - 2015 |
| 69 | 20.0100 | 2007 - 2015 |
| 187 | 20.0700 | 2007 - 2015 |
| 69 | 20.3300 | 2007 - 2015 |
| 46 | 20.7700 | 2007 - 2014 |
| 12 | 20.8400 | 2007 - 2014 |
| 90 | 20.9600 | 2007 - 2015 |
| 20 | 21.6000 | 2007 - 2014 |
| 66 | 22.4900 | 2007 - 2015 |
| 66 | 22.8700 | 2007 - 2015 |
| 79 | 23.1800 | 2007 - 2015 |
| 78 | 23.4400 | 2007 - 2015 |
| 19 | 23.8200 | 2007 - 2014 |
| 6 | 23.9500 | 2007 - 2014 |
| 327 | 24.2000 | 2007 - 2014 |
| 146 | 24.3300 | 2007 - 2014 |
| 50 | 25.1500 | 2007 - 2015 |
| 177 | 25.4100 | 2007 - 2014 |
| 315 | 25.9200 | 2007 - 2015 |
| 316 | 26.1100 | 2007 - 2015 |
| 98 | 26.8700 | 2007 - 2015 |
| 787 | 27.1200 | 2007 - 2015 |
| 27,437 | 27.5000 | 2007 - 2015 |
| 74 | 28.5200 | 2007 - 2014 |
| 148 | 28.7700 | 2007 - 2015 |
| 170 | 34.6200 | 2007 - 2015 |
| 102 | 34.9300 | 2007 - 2015 |
| 82 | 35.0600 | 2007 - 2015 |
| 92 | 37.8500 | 2007 - 2015 |
| 89 | 38.8700 | 2007 - 2015 |
| 77,754 | 40.6500 | 2007 - 2016 |
| 110 | 41.4700 | 2007 - 2015 |
| 343 | 44.7100 | 2007 - 2015 |
| 424 | 45.2900 | 2007 - 2016 |
| 314 | 45.4100 | 2007 - 2016 |
| 118 | 46.0500 | 2007 - 2016 |
| 69 | 46.6200 | 2007 - 2016 |
| 345 | 48.3300 | 2007 - 2016 |
| 472 | 48.5900 | 2007 - 2016 |
| 157 | 49.5400 | 2007 - 2016 |
| 115 | 49.6000 | 2007 - 2016 |
| 314 | 49.6700 | 2007 - 2016 |
| 89 | 50.4900 | 2007 - 2016 |
| 157 | 50.6800 | 2007 - 2016 |
| 236 | 50.7500 | 2008 - 2017 |
| 472 | 51.3800 | 2008 - 2017 |
| 156 | 52.5900 | 2008 - 2017 |
| 99 | 52.9100 | 2007 - 2016 |
| 92 | 53.1000 | 2006 - 2017 |
| 70 | 53.4100 | 2007 - 2016 |
| 157 | 53.4800 | 2008 - 2017 |
| 78 | 53.6700 | 2008 - 2017 |
| 591 | 53.7900 | 2007 - 2016 |
| 314 | 54.1100 | 2007 - 2016 |
| 944 | 54.2400 | 2007 - 2016 |
| 758 | 54.5600 | 2007 - 2016 |
| 419 | 55.2600 | 2007 - 2016 |
| 74 | 55.6400 | 2007 - 2016 |
| 59 | 55.7600 | 2007 - 2016 |
| 105 | 55.8900 | 2007 - 2016 |
| 157 | 56.2700 | 2007 - 2016 |
| 78 | 56.3400 | 2007 - 2016 |
| 574 | 56.7200 | 2007 - 2016 |
| 138 | 56.9100 | 2007 - 2016 |
| 78 | 57.4800 | 2008 - 2017 |
| 157 | 58.1100 | 2007 - 2016 |
| 549 | 58.9400 | 2007 - 2017 |
| 393 | 60.0200 | 2007 - 2016 |
| 78 | 61.2300 | 2008 - 2017 |
| 324 | 61.9200 | 2007 - 2016 |
| 471 | 62.0500 | 2007 - 2016 |
| 786 | 62.9400 | 2008 - 2017 |
| 157 | 63.3200 | 2008 - 2017 |
| 708 | 63.8900 | 2008 - 2017 |
| 112 | 64.2700 | 2007 - 2016 |
| 54 | 64.6500 | 2007 - 2016 |
| 78 | 64.9700 | 2007 - 2016 |
| 78 | 65.5400 | 2007 - 2016 |
| 49 | 66.4300 | 2007 - 2016 |
| 112 | 67.5800 | 2007 - 2016 |
| 157 | 70.5000 | 2008 - 2017 |
| Taylor Nelson Sofres plc 2005 Long Term Incentive Plan As at 31 December 2009, unexercised options over ordinary shares of 74,410 have been granted under the Taylor Nelson Sofres plc 2005 Long Term Incentive Plan as follows: |
||
|---|---|---|
| Number of ordinary shares under option | Exercise price per share (£) | Exercise dates |
| 11,582 | – | 2011 |
| 29,849 | – | 2012 |
| 32,979 | – | 2013 |
| 2008 New Share Plan As at 31 December 2009, unexercised options over ordinary shares of 28,649 have been granted under the Taylor Nelson Sofres plc 2008 New Share Plan as follows: |
||
|---|---|---|
| Number of ordinary shares under option | Exercise price per share (£) | Exercise dates |
| 28,649 | – | 2012 |
| 2005 Key Employee Equity Plan As at 31 December 2009, unexercised options over ordinary shares of 4,519 have been granted under the Taylor Nelson Sofres plc 2005 Key Employee Equity Plan as follows: |
||
|---|---|---|
| Number of ordinary shares under option | Exercise price per share (£) | Exercise dates |
| 245 | – | 2011 |
| 4,274 | – | 2012 |
| 1999 Worldwide Employee Sharesave Plan As at 31 December 2009, unexercised options over ordinary shares of 1,549,446 have been granted under the Taylor Nelson Sofres plc 1999 Worldwide Employee Sharesave Plan as follows: |
||
|---|---|---|
| Number of ordinary shares under option | Exercise price per share (£) | Exercise dates |
| 44,039 | 1.2700 | 2010 |
| 837,174 | 1.7300 | 2013 - 2015 |
| 282,043 | 1.9500 | 2011 - 2012 |
| 28,626 | 2.2900 | 2009 - 2011 |
| 89,080 | 2.5600 | 2009 - 2012 |
| 153,955 | 2.6500 | 2012 - 2014 |
| 22,822 | 2.9900 | 2010 - 2011 |
| 91,707 | 3.0000 | 2011 - 2013 |
The aggregate status of the WPP Share Option Schemes during 2009 was as follows:
| Movements on options granted (represented in ordinary shares) | ||||||
|---|---|---|---|---|---|---|
| 1 January 2009 number | Granted number | Exercised number | Lapsed number | Outstanding 31 December 2009 | Exercisable | |
| WPP | 27,777,551 | 19,220 | (601,400) | (3,643,477) | 23,551,894 | 23,407,933 |
| WWOP | 11,213,314 | 4,258,925 | (27,150) | (1,851,723) | 13,593,366 | 4,832,930 |
| Y&R | 2,337,074 | – | – | (1,474,398) | 862,676 | 862,676 |
| Tempus | 56,468 | – | – | – | 56,468 | 56,468 |
| Grey | 542,995 | – | (135,475) | (14,570) | 392,950 | 335,110 |
| 24/7 | 820,340 | – | (158,035) | (46,100) | 616,205 | 524,845 |
| TNS | 1,951,773 | – | (227,131) | (67,618) | 1,657,024 | 117,706 |
| 44,699,515 | 4,278,145 | (1,149,191) | (7,097,886) | 40,730,583 | 30,137,668 | |
| Weighted-average exercise price for options over: | ||||||
|---|---|---|---|---|---|---|
| 1 January 2009 | Granted | Exercised | Lapsed | Outstanding 31 December 2009 | Exercisable 31 December 2009 |
|
| Ordinary shares (£) | ||||||
| WPP | 5.543 | n/a | 4.452 | 5.680 | 5.566 | 5.562 |
| WWOP | 6.632 | 5.494 | 3.920 | 6.438 | 6.306 | 6.620 |
| Y&R | 6.673 | n/a | n/a | 6.257 | 7.052 | 7.052 |
| Tempus | 5.445 | n/a | n/a | n/a | 5.445 | 5.445 |
| Grey | 3.499 | n/a | n/a | n/a | 3.499 | 3.499 |
| TNS | 1.931 | n/a | 2.323 | 2.109 | 1.870 | 2.494 |
| ADRs ($) | ||||||
| WPP | 46.948 | 26.010 | 33.241 | 45.184 | 46.939 | 46.894 |
| WWOP | 61.202 | 44.560 | 30.800 | 60.342 | 56.187 | 55.538 |
| Y&R | 50.485 | n/a | n/a | 49.570 | 52.298 | 52.298 |
| Grey | 28.289 | n/a | 21.746 | 27.290 | 30.949 | 30.450 |
| 24/7 | 38.409 | n/a | 36.852 | 41.475 | 38.578 | 37.841 |
| Options over ordinary shares Outstanding |
||
|---|---|---|
| Range of exercise prices £ | Weighted average exercise price £ | Weighted average contractual life Months |
| nil – 10.770 | 5.559 | 63 |
| Options over ADRs Outstanding |
||
|---|---|---|
| Range of exercise prices $ | Weighted average exercise price $ | Weighted average contractual life Months |
| 1.340 – 84.731 | 49.003 | 56 |
As at 31 December 2009 there was £5.8 million (2008: £5.5 million) of total unrecognised compensation cost related to share options. That cost is expected to be recognised over a weighted average period of 20 months (2008: 17 months).
Share options are satisfied out of newly issued shares.
| The weighted average fair value of options granted in the year calculated using the Black-Scholes model, was as follows: | |||
|---|---|---|---|
| 2009 | 2008 | 2007 | |
| Fair value of UK options (shares) | 115.5p | 129.5p | 188.3p |
| Fair value of US options (ADRs) | $8.95 | $8.36 | $17.85 |
| Weighted average assumptions: | |||
| UK Risk-free interest rate | 2.27% | 3.93% | 5.26% |
| US Risk-free interest rate | 1.85% | 2.25% | 4.53% |
| Expected life (months) | 48 | 48 | 48 |
| Expected volatility | 30% | 25% | 25% |
| Dividend yield | 2.5% | 1.75% | 1.5% |
Options are issued at an exercise price equal to market value on the date of grant.
The weighted average share price of the Group for the year ended 31 December 2009 was £4.72 (2008: £5.12, 2007: £7.09) and the weighted average ADR price for the same period was $37.23 (2008: $48.26, 2007: $71.04).
Expected volatility is sourced from external market data and represents the historic volatility in the Group’s share price over a period equivalent to the expected option life.
Expected life is based on a review of historic exercise behaviour in the context of the contractual terms of the options, as described in more detail below.
Terms of share option plans
The Worldwide Share Ownership Program is open for participation to employees with at least two years’ employment in the Group. It is not available to those participating in other share-based incentive programs or to executive directors. The vesting period for each grant is three years and there are no performance conditions other than continued employment with the Group.
The Executive Stock Option Plan has historically been open for participation to WPP Group Leaders, Partners and High Potential Group. It is not currently offered to parent company executive directors. The vesting period is three years and performance conditions include achievement of various TSR (Total Share Owner Return) and EPS (Earnings per Share) objectives, as well as continued employment. In 2005, the Group moved away from the issuance of stock options for Leaders, Partners and High Potential Group and has since largely made grants of restricted stock instead (note 22).
The Group grants stock options with a life of ten years, including the vesting period. The terms of stock options with performance conditions are such that if, after nine years and eight months, the performance conditions have not been met, then the stock option will vest automatically.