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SHARE-BASED COMPENSATION PLAN | 12 Months Ended
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Dec. 31, 2022
SHARE-BASED COMPENSATION PLAN |
SHARE-BASED COMPENSATION PLAN |
22. | SHARE-BASED COMPENSATION PLAN
For the year ended December 31, 2022, the Company has 3 (three) share-based, long-term compensation plans: (i) Phantom stock option plan (“PS”); (ii) Share Appreciation Rights (“SAR”), both settled in local currency; and (iii) restricted shares, settled in shares. The characteristics and measurement method of each plan are disclosed below.
22.1. | Long term compensation plans (“PS and SAR”)
Certain executives and key members of Management have a long-term compensation plan linked to the share price, with payment in cash. Throughout 2020, the Company granted the SAR and PLUS (Share Appreciation Rights) (“SAR”) plans of phantom stock options. Under the PS plan, the beneficiary does not make any investments, and under the SAR plan, the beneficiaries should invest 5% of the total amount corresponding to the number of options on phantom shares at the grant date, and 20% after 3 (three) years to acquire the option. The Company also granted long-term incentive plans to its key members as part of its retention policy. The vesting period of options may vary from 3 (three) to 5 (five) years, as of the grant date, in accordance with the characteristics of each plan. The share price is calculated based on the average share quote for the 90 previous trading sessions, starting from the closing quote on the last business day of the month prior to the month of the grant. The installments of these programs will be adjusted by the variation in the prices on the SUZB3 at B3, between the granting and the payment period. On dates when the SUZB3 shares are not traded, the quote of the previous trading session will be considered. The phantom share options will only be due if the beneficiary is an employee of the Company on the payment date. In case of termination by the employee, before the vesting period is completed, the executive will not be entitled to receive all benefits, unless otherwise established in the agreements. ​ The roll-forward arrangements are set out below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, | ​ | December 31, | ​ | December 31,
​ |  | 2022 |  | 2021 |  | 2020
​ | ​ | Number of shares
Opening balance | ​ | 5,415,754 | ​ | 5,772,356 | ​ | 5,996,437
Granted during of the year | ​ | 4,152,200 | ​ | 1,906,343 | ​ | 1,770,384
Exercised (1) | ​ | (1,474,506) | ​ | (1,860,334) | ​ | (1,789,413)
Exercised due to resignation (1) | ​ | (175,552) | ​ | (86,196) | ​ | (21,253)
Abandoned / cancelled due to resignation | ​ | (334,711) | ​ | (316,415) | ​ | (183,799)
Closing balance | ​ | 7,583,185 | ​ | 5,415,754 | ​ | 5,772,356
1) | The average price of the share options exercised and exercised due to termination of employment, for the year ended December 31, 2022 was R$48.79 (forty eight Reais and seventy nine cents) ((R$60.30 (sixty Brazilian Reais and thirty cents) as at December 31, 2021).
On December 31, 2022, the consolidated outstanding phantom shares option plans are as set out below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
December 31, 2022
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Quantity of
​ |  | ​ |  | ​ | ​ | Fair value on |  | outstanding options
Plan | ​ | Grant date | ​ | Exercise date | ​ | grant date (1) | ​ | granted
Deferral 2018 | ​ | 03/01/2019 | ​ | 03/01/2023 | ​ | R$ | 41.10 | ​ | 74,101
Deferral 2020 | ​ | 03/01/2021 | ​ | 03/01/2024 | ​ | R$ | 57.88 | ​ | 280,408
Deferral 2020 | ​ | 03/01/2021 | ​ | 03/03/2025 | ​ | R$ | 57.88 | ​ | 280,408
Deferral 2021 36 | ​ | 03/01/2022 | ​ | 03/01/2025 | ​ | R$ | 56.52 | ​ | 675,021
Deferral 2021 48 | ​ | 03/01/2022 | ​ | 03/01/2026 | ​ | R$ | 56.52 | ​ | 164,951
ILP - Retention 2020 - 36 Oct | ​ | 10/01/2020 | ​ | 10/01/2023 | ​ | R$ | 38.79 | ​ | 33,289
ILP - Retention 2021 - 36 Oct | ​ | 10/01/2021 | ​ | 10/01/2024 | ​ | R$ | 58.05 | ​ | 2,524
ILP 2019 – 48 H | ​ | 03/25/2019 | ​ | 03/25/2024 | ​ | R$ | 42.19 | ​ | 7,857
ILP 2019 - 48 Oct | ​ | 10/01/2019 | ​ | 10/01/2023 | ​ | R$ | 31.75 | ​ | 12,258
ILP 2020 - 36 Apr | ​ | 04/01/2020 | ​ | 04/01/2023 | ​ | R$ | 38.50 | ​ | 46,531
ILP 2020- 48 Condition A | ​ | 05/01/2020 | ​ | 04/30/2024 | ​ | R$ | 38.34 | ​ | 623,380
ILP 2020- 48 Condition B | ​ | 05/01/2020 | ​ | 04/30/2024 | ​ | R$ | 38.34 | ​ | 133,581
ILP 2020- 48 Condition C | ​ | 05/01/2020 | ​ | 04/30/2024 | ​ | R$ | 38.34 | ​ | 133,581
ILP 2021 - 24 | ​ | 03/01/2021 | ​ | 03/01/2023 | ​ | R$ | 56.10 | ​ | 6,285
ILP 2021 - 36 | ​ | 03/01/2021 | ​ | 03/01/2024 | ​ | R$ | 56.10 | ​ | 6,285
ILP 2021 - Apr.23_24 | ​ | 12/16/2021 | ​ | 04/03/2023 | ​ | R$ | 54.81 | ​ | 10,511
ILP 2021 - Apr.23_24 | ​ | 12/16/2021 | ​ | 04/01/2024 | ​ | R$ | 54.81 | ​ | 10,511
ILP 2021 – 24 May | ​ | 05/01/2021 | ​ | 05/01/2023 | ​ | R$ | 67.91 | ​ | 654
ILP 2021 36 - Apr | ​ | 04/01/2021 | ​ | 04/01/2024 | ​ | R$ | 64.12 | ​ | 220,007
ILP 2021 -36 May | ​ | 05/01/2021 | ​ | 05/01/2024 | ​ | R$ | 67.91 | ​ | 1,177
ILP 2021 - 48 | ​ | 04/01/2021 | ​ | 04/01/2025 | ​ | R$ | 64.12 | ​ | 220,007
ILP Hiring/Retention Bonus 2020 - 36 Oct | ​ | 10/01/2020 | ​ | 10/01/2023 | ​ | R$ | 43.14 | ​ | 7,285
ILP Retention 2020 - Premium | ​ | 10/01/2020 | ​ | 10/01/2023 | ​ | R$ | 43.14 | ​ | 4,796
ILP Retention 2021 - August | ​ | 08/02/2021 | ​ | 08/01/2024 | ​ | R$ | 63.73 | ​ | 3,969
ILP Retention 2021 - July | ​ | 07/01/2021 | ​ | 07/01/2024 | ​ | R$ | 67.72 | ​ | 8,516
PLUS 2019 | ​ | 04/01/2019 | ​ | 04/01/2024 | ​ | R$ | 42.81 | ​ | 5,705
SAR 2018 | ​ | 04/02/2018 | ​ | 04/02/2023 | ​ | R$ | 21.45 | ​ | 4,511
SAR 2019 | ​ | 04/01/2019 | ​ | 04/01/2024 | ​ | R$ | 42.81 | ​ | 153,725
SAR 2020 | ​ | 04/01/2020 | ​ | 04/01/2025 | ​ | R$ | 38.50 | ​ | 661,714
SAR 2021 | ​ | 04/01/2021 | ​ | 04/01/2026 | ​ | R$ | 64.12 | ​ | 747,249
SAR 2022 | ​ | 04/01/2022 | ​ | 04/01/2027 | ​ | R$ | 58.64 | ​ | 1,775,750
ILP Retention 2022 | ​ | 01/17/2022 | ​ | 01/17/2025 | ​ | R$ | 55.18 | ​ | 22,700
ILP Retention 2022 | ​ | 01/17/2022 | ​ | 01/17/2026 | ​ | R$ | 55.18 | ​ | 22,700
ILP Retention 2022 | ​ | 01/17/2022 | ​ | 01/17/2027 | ​ | R$ | 55.18 | ​ | 22,699
ILP Retention 2022 | ​ | 04/01/2022 | ​ | 04/01/2025 | ​ | R$ | 58.64 | ​ | 29,490
ILP Retention 2022 | ​ | 04/01/2022 | ​ | 04/01/2024 | ​ | R$ | 58.64 | ​ | 13,238
ILP Retention 2022 | ​ | 06/02/2022 | ​ | 06/02/2023 | ​ | R$ | 55.43 | ​ | 1,866
ILP Retention 2022 | ​ | 06/02/2022 | ​ | 06/02/2024 | ​ | R$ | 55.43 | ​ | 1,866
ILP Retention 2022 | ​ | 06/02/2022 | ​ | 06/02/2025 | ​ | R$ | 55.43 | ​ | 1,923
ILP Retention 2022 | ​ | 08/01/2022 | ​ | 08/01/2025 | ​ | R$ | 51.00 | ​ | 3,832
ILP Retention 2022 | ​ | 10/01/2022 | ​ | 04/01/2026 | ​ | R$ | 47.71 | ​ | 148,687
ILP Retention 2022 | ​ | 10/01/2022 | ​ | 04/01/2027 | ​ | R$ | 47.71 | ​ | 43,918
ILP Retention 2022 - Executive | ​ | 04/01/2022 | ​ | 04/01/2025 | ​ | R$ | 58.64 | ​ | 953,719
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 7,583,185
(1) | Amounts expressed in Reais.
​
22.2. | Restricted shares plan
The Company also offers a Restricted Shares plan based on the Company’s performance (“Restricted Shares Program ”). The plan associates the quantity of restricted shares granted to the Company’s performance, which in 2021 was linked to the operating cash generation target and ESG. The quantity of the restricted stock granted is defined in financial terms, and is subsequently converted into shares based on the last 60 (sixty) stock exchange trading days on December 31, 2022 of SUZB3 at B3. After the measurement of the target, which takes place 12 months after the execution of the contract, the restricted shares will be granted immediately (conditional on the achievement of the established goals), as they not have to comply with the vesting period. However, the beneficiaries of the grant must comply with the lockup period of thirty-six (36) months during which they will not be able to sell the shares. In the event that the beneficiaries leave the Company before the end of the fiscal year for the measurement of operating cash generation, they will lose the right to the grant of restricted shares. The position is set forth below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Date of | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | execution of | ​ | ​ | ​ | Price on | ​ | Shares | ​ | Restricted year for
Program |  | the contract |  | Grant date |  | grant date |  | Granted |  | transfer of shares
2020 | ​ | 01/02/2020 | ​ | 01/02/2021 | ​ | R$ | 51.70 | ​ | 106,601 | ​ | 01/02/2024
2021 | ​ | 01/02/2021 | ​ | 01/02/2022 | ​ | R$ | 53.81 | ​ | 108,010 | ​ | 01/02/2025
2022 | ​ | 01/02/2022 | ​ | 02/01/2023 | ​ | R$ | 52.00 | ​ | 102,600 | ​ | 01/02/2026
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 317,211 | ​ | ​
​ On March 31, 2022, the 2018 Program had its lockup period concluded and, therefore, the grant of 130,435 shares was carried out in exchange for treasury shares (Note 25.5).
22.3. | Measurement assumptions
In the case of the phantom shares plan since the settlement takes place in cash, the fair value of the options is remeasured at the end of each period based on the Monte Carlo Method (“MMC”), which is multiplied by the Total Shareholder Return (“TSR”) during the period, which varies between 75% and 125%, depending on the performance of SUZB3 in relation to its peers in Brazil. The restricted stock plan considers the following assumptions: ​
| (i) | The expectation of volatility was calculated for each exercise date, considering the remaining time to complete the vesting year, as well as the historical volatility of returns, using the GARCH model for calculating volatility;
| (ii) | The expected average life of phantom stocks and stock options was defined by the remaining term to the limit exercise date;
| (iii) | The expected dividends were defined based on the historical earnings per share of Suzano; and
| (iv) | The risk-free weighted average interest rate used was the Brazilian Reais yield curve (DI expectation) observed on the open market, which is the best comparison basis for the Brazilian market risk-free interest rate. The rate used for each exercise date changes according to the vesting year.
The amounts corresponding to the services received and recognized are set forth below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Liabilities and Equity | ​ | Statement of income and Equity
​ | ​ | December 31, | ​ | December 31, | ​ | December 31, | ​ | December 31, | ​ | December 31,
​ |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2020
Non-current liabilities | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Provision for phantom stock plan | ​ | 162,117 | ​ | 166,998 | ​ | (75,542) | ​ | (94,897) | ​ | (151,985)
Equity | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Stock options granted | ​ | 20,790 | ​ | 15,455 | ​ | (5,335) | ​ | (4,843) | ​ | (4,633)
Shares granted | ​ | (2,365) | ​ | ​ | ​ | 2,365 | ​ | ​ | ​ | ​
​ | ​ | 18,425 | ​ | 15,455 | ​ | (2,970) | ​ | (4,843) | ​ | (4,633)
​ | ​ | ​ | ​ | ​ | ​ | (78,512) | ​ | (99,740) | ​ | (156,618)
​

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