The Group operates one equity-settled share-based long-term incentive plan (LTIP). The economic cost of awarding shares and share options to employees is recognised as an expense in the income statement, equivalent to the fair value of the benefit awarded. The fair value is determined by reference to option pricing models, principally Monte Carlo and adjusted Black-Scholes models. The charge is recognised in the income statement over the vesting period of the award. At each balance sheet date, the Group revises its estimate of the number of shares that vest or options that are expected to become exercisable. Any revision to the original estimates is reflected in the income statement with a corresponding adjustment to equity immediately to the extent it relates to past service, and the remainder over the rest of the vesting period.

The Company introduced a share-based performance plan in 2006 for senior managers worldwide. The main features of the scheme are as follows:

The total net charge for the year relating to equity-settled share-based payment plans was £9m (2021: £10m; 2020: £6m).

A summary of the number of shares in active share option plans is shown below:

Share options outstanding

Share options exercisable

Shares

Scheme

Shares

outstanding

Shares

Year

interest at

awarded

lapsed

vested

exercisable at

vested

exercised

lapsed

exercisable at

Vesting

1 January

during

31 December

1 January

during

31 December

grant

year

2022

2012

2015

—

168,551

—

(168,426)

(125)

—

2013

2016

—

16,964

—

(16,964)

—

1,025,307

16,964

(137)

—

1,042,134

2014

2017

—

19,487

—

(19,487)

—

1,188,070

19,487

(11,367)

(2)

1,196,188

2015

2018

—

21,107

—

(21,107)

—

1,364,269

21,107

(118,858)

—

1,266,518

2016

2019

—

30,808

—

(30,808)

—

1,942,074

30,808

(131,628)

(58)

1,841,196

2017

2020

—

24,878

—

(24,878)

—

1,625,618

24,878

(324,744)

(1,025)

1,324,727

2018

2021

891,744

34,531

(5,910)

(905,768)

14,597

1,538,591

905,768

(451,433)

(5,058)

1,987,868

2019

2022

4,776,149

132,345

(332,441)

(4,114,390)

461,663

—

4,114,390

(1,878,327)

(22,984)

2,213,079

2020

2023

3,471,012

—

(284,625)

—

3,186,387

—

2021

2024

4,137,673

—

(339,688)

—

3,797,985

—

2022

2025

—

4,964,496

(118,596)

—

4,845,900

—


		Share options outstanding					Share options exercisable
						Shares
		Scheme	Shares	Shares	Shares	outstanding	Shares	Shares	Shares	Shares	Shares
Year		interest at	awarded	lapsed	vested	at	exercisable at	vested	exercised	lapsed	exercisable at
of	Vesting	1 January	during	during	during	31 December	1 January	during	during	during	31 December
grant	year	2021	2021	2021	2021	2021	2021	2021	2021	2021	2021
2012	2015	—	—	—	—	—	179,519	—	(10,968)	—	168,551
2013	2016	—	12,073	—	(12,073)	—	1,085,178	12,073	(71,944)	—	1,025,307
2014	2017	—	13,693	—	(13,693)	—	1,200,990	13,693	(26,613)	—	1,188,070
2015	2018	—	15,831	—	(15,831)	—	1,398,235	15,831	(49,797)	—	1,364,269
2016	2019	—	22,920	(15)	(22,905)	—	2,052,013	22,905	(131,521)	(1,323)	1,942,074
2017	2020	—	19,720	(85)	(19,635)	—	1,784,890	19,635	(171,187)	(7,720)	1,625,618
2018	2021	6,024,191	164,397	(1,066,488)	(4,230,356)	891,744	—	4,230,356	(2,691,765)	—	1,538,591
2019	2022	4,993,019	33,885	(250,755)	—	4,776,149	—	—	—	—	—
2020	2023	3,561,710	754	(91,452)	—	3,471,012	—	—	—	—	—
2021	2024	—	4,228,162	(90,489)	—	4,137,673	—	—	—	—	—

The fair value of the 2022 awards made under the Performance Share Plan is charged to the income statement over the vesting period based on values derived from a Monte Carlo model prepared by external remuneration consultants. This is a closed-form solution which takes account of the correlation between share price performance and the likelihood of a TSR performance condition being met. For the shares awarded in March 2022, the significant inputs into the model were a share price of 480.5p (2021: 495.7p), an expected share price volatility of 23.9% (2021: 23.2%), a median share price correlation between the companies in the comparator group of 84.0% (2021: 91.0%), and an expected life commensurate with the three-year performance/vesting period. The share price volatility assumption is based on analysis of historical daily share prices. As the awards are nil-cost (i.e. there is no exercise price), the assumed risk-free rate of return has minimal impact on the fair value of the awards. Similarly, as dividend equivalents are paid on the vesting portion of awards, the fair value of these awards is not reduced to reflect dividends paid during the vesting period.

The fair value of awards granted during 2022 was £19m (2021: £16m) and the weighted average fair value per award granted during the year was 385.9p (2021: 371.7p). The weighted average share price for options exercised in the year was 499.9p (2021: 505.6p) and the weighted average contract term remaining on shares unexercised at the year end was 527 days (2021: 450 days).

In addition to the Performance Share Plan there was a transfer of existing long-term incentive plans in Terminix that were expensed during the period totalling £9m.