REA Group Ltd Annual Report 2021

Annual Report 2021 | REA Group Ltd 18. Share-based payments Accounting policies The cost of equity settled transactions is recognised in employee benefits expense in the Consolidated Income Statement, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled (the vesting period), ending on the date on which the relevant employees become fully entitled to the award (the vesting date). At each reporting date until vesting, the cumulative charge to the Consolidated Income Statement is in accordance with the vesting conditions. Equity settled awards granted by the Company to employees of subsidiaries are recognised in the subsidiariesʼ separate Financial Statements as an expense with a corresponding credit to equity. As a result, the expense recognised by the Group is the total expense associated with all such awards. Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards vest than were originally anticipated. Key estimate and judgement The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The Long Term Incentive (“LTI”) plan, deferred share and deferred equity plan valuations were performed using the Black Scholes model. The accounting estimates and assumptions relating to equity settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity. (a) LTI plan The Group operates a LTI plan for executives identified by the Board. The plan is based on the grant of performance rights that vest as shares on a one-to-one basis at no cost to the employee subject to performance hurdles. Settlement of the performance rights is made in ordinary shares purchased on-market. The performance measures approved by the Board for all executives are based upon Group revenue and EPS annual growth rate achievement over the performance period. LTI plans issued during the year also include a performance measure based upon relative Total Shareholder Returns over the performance period. Rights are vested after the performance period. The LTI Plan 2021 rights performance period ended on 30 June 2021 and they will vest upon approval by the Board in August 2021. As all other performance periods conclude in the future, no performance rights are exercisable (or have been exercised) at balance date. Year in review Directors’ Report Financial Statements Remuneration Report Sustainability Our Leaders 101