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Share-based Compensation | 12 Months Ended
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Dec. 31, 2019
Share-based Payment Arrangement [Abstract] |
Share-based Compensation | Share-based Compensation Our share-based compensation expense primarily relates to the share-based incentive awards issued by Liberty Global to its employees and employees of its subsidiaries. A summary of our aggregate share-based compensation expense is set forth below:
| Year ended December 31,
| 2019 |  | 2018 |  | 2017
| in millions
Liberty Global: |  |  |  |  |
Performance-based incentive awards (a) | $ | 134.5 |  |  | $ | 50.8 |  |  | $ | 23.9 |
Non-performance based incentive awards (b) | 107.6 |  |  | 90.1 |  |  | 93.8 |
Other (c) | 39.0 |  |  | 43.4 |  |  | 13.7 |
Total Liberty Global | 281.1 |  |  | 184.3 |  |  | 131.4 |
Telenet share-based incentive awards (d) | 15.6 |  |  | 19.6 |  |  | 20.7 |
Other | 9.1 |  |  | 2.1 |  |  | 10.1 |
Total | $ | 305.8 |  |  | $ | 206.0 |  |  | $ | 162.2 |
Included in: |  |  |  |  |
Other operating expenses | $ | 3.9 |  |  | $ | 4.4 |  |  | $ | 4.7 |
SG&A expenses | 301.9 |  |  | 201.6 |  |  | 157.5 |
Total | $ | 305.8 |  |  | $ | 206.0 |  |  | $ | 162.2 |
_______________
(a) | Includes share-based compensation expense related to (i) PSU s, (ii) in 2019, (a) the 2019 Challenge Performance Awards and (b) the performance-based portion of the 2019 CEO Performance Award, each as defined and described below, and (iii) through March 2017, certain performance grant units issued to our Chief Executive Officer.
(b) | The 2019 amount includes share-based compensation expense related to the RSA s issued under the 2019 CEO Performance Award, as defined and described below.
(c) | Represents annual incentive compensation and defined contribution plan liabilities that have been or are expected to be settled with Liberty Global ordinary shares. In the case of the annual incentive compensation, shares have been or will be issued to senior management and key employees pursuant to a shareholding incentive program that was implemented in the fourth quarter of 2017. The shareholding incentive program allows these employees to elect to receive up to 100% of their annual incentive compensation in ordinary shares of Liberty Global in lieu of cash.
(d) | Represents the share-based compensation expense associated with Telenet’s share-based incentive awards, which, at December 31, 2019, included performance- and non-performance-based stock option awards with respect to 3,846,649 Telenet shares. These stock option awards had a weighted average exercise price of €43.82 ($49.20).
As of December 31, 2019, $291.8 million of total unrecognized compensation cost related to our Liberty Global share-based compensation awards is expected to be recognized by our company over a weighted-average period of approximately 2.1 years. The following table summarizes certain information related to the share-based incentive awards granted and exercised with respect to Liberty Global ordinary shares (includes amounts related to awards held by employees of our discontinued operations, unless otherwise noted):
| Year ended December 31,
| 2019 |  | 2018 |  | 2017
Assumptions used to estimate fair value of options, SARs and PSARs granted: |  |  |  |  |
Risk-free interest rate | 1.59 - 2.45% |  | 2.68 - 2.92% |  | 1.66 - 2.16%
Expected life | 3.2 - 6.2 years |  | 3.0 - 4.2 years |  | 3.0 - 6.4 years
Expected volatility | 29.9 - 33.8% |  | 30.2 - 33.6% |  | 25.9 - 37.9%
Expected dividend yield | none |  | none |  | none
Weighted average grant-date fair value per share of awards granted: |  |  |  |  |
Options | $ | 8.60 |  |  | $ | 8.99 |  |  | $ | 9.40 |
SARs | $ | 6.79 |  |  | $ | 7.92 |  |  | $ | 8.60 |
PSARs | $ | 6.92 |  |  | $ | — |  |  | $ | — |
RSUs | $ | 24.66 |  |  | $ | 28.72 |  |  | $ | 31.24 |
RSAs | $ | 25.29 |  |  | $ | — |  |  | $ | — |
PSUs | $ | 25.00 |  |  | $ | 23.60 |  |  | $ | 26.59 |
Total intrinsic value of awards exercised (in millions): |  |  |  |  |
Options | $ | 4.2 |  |  | $ | 3.8 |  |  | $ | 13.4 |
SARs | $ | 13.6 |  |  | $ | 22.5 |  |  | $ | 74.8 |
Cash received from exercise of options (in millions) | $ | 2.3 |  |  | $ | 5.7 |  |  | $ | 11.7 |
Income tax benefit related to share-based compensation of our continuing operations (in millions) | $ | 21.0 |  |  | $ | 18.6 |  |  | $ | 9.8 |
Share Incentive Plans — Liberty Global Ordinary Shares Incentive Plans As of December 31, 2019, we are authorized to grant incentive awards under the Liberty Global 2014 Incentive Plan and the Liberty Global 2014 Nonemployee Director Incentive Plan. Generally, we may grant non-qualified share options, SAR s, PSAR s, restricted shares, RSU s, cash awards, performance awards or any combination of the foregoing under either of these incentive plans (collectively, awards). Ordinary shares issuable pursuant to awards made under these incentive plans will be made available from either authorized but unissued shares or shares that have been issued but reacquired by our company. Awards may be granted at or above fair value in any class of ordinary shares. The maximum number of Liberty Global shares with respect to which awards may be issued under the Liberty Global 2014 Incentive Plan and the Liberty Global 2014 Nonemployee Director Incentive Plan is 155 million (of which no more than 50.25 million shares may consist of Class B ordinary shares) and 10.5 million, respectively, in each case, subject to anti-dilution and other adjustment provisions in the respective plan. As of December 31, 2019, the Liberty Global 2014 Incentive Plan and the Liberty Global 2014 Nonemployee Director Incentive Plan had 71,262,640 and 8,652,029 ordinary shares available for grant, respectively. Awards (other than performance-based awards) under the Liberty Global 2014 Incentive Plan generally (i) vest 12.5% on the six month anniversary of the grant date and then vest at a rate of 6.25% each quarter thereafter and (ii) expire seven years after the grant date. Awards (other than RSU s) issued under the Liberty Global 2014 Nonemployee Director Incentive Plan generally vest in three equal annual installments, provided the director continues to serve as director immediately prior to the vesting date, and expire seven years after the grant date. RSU s vest on the date of the first annual general meeting of shareholders following the grant date. These awards may be granted at or above fair value in any class of ordinary shares. Performance Awards The following is a summary of the material terms and conditions with respect to our performance-based awards for certain executive officers and key employees. Liberty Global PSU s In March 2015, our compensation committee approved the grant of PSU s to executive officers and key employees (the 2015 PSU s). The performance plan for the 2015 PSU s covered a two-year period that ended on December 31, 2016 and included a performance target based on the achievement of a specified compound annual growth rate (CAGR) in a consolidated Adjusted OIBDA metric (as defined in note 20). The performance target was adjusted for events such as acquisitions, dispositions and changes in foreign currency exchange rates that affect comparability (Adjusted OIBDA CAGR), and the participant’s annual performance ratings during the two-year performance period. Participants earned 99.5% of their targeted awards under the 2015 PSU s, which vested 50% on each of April 1 and October 1 of 2017. In February 2016, our compensation committee approved the grant of PSU s to executive officers and key employees (the 2016 PSUs). The performance plan for the 2016 PSUs covered a three-year period that ended on December 31, 2018 and included a performance target based on the achievement of a specified Adjusted OIBDA CAGR. The 2016 PSUs, as adjusted through the 2017 Award Modification, required delivery of compound annual growth rates of consolidated Adjusted OIBDA CAGR of 6.0% during the three-year performance period for Liberty Global or Liberty Latin America depending on the respective class of shares underlying the award. Participants earned 82.3% of their targeted awards under the 2016 PSUs, which vested 50% on each of April 1, 2019 and October 1, 2019. During 2018, the compensation committee of our board of directors approved the grant of PSU s to executive officers and key employees (the 2018 PSUs) pursuant to a performance plan that is based on the achievement of a specified Adjusted OIBDA CAGR during the two-year period ending December 31, 2019. The 2018 PSUs include over- and under-performance payout opportunities should the Adjusted OIBDA CAGR exceed or fail to meet the target, as applicable. A performance range of 50% to 125% of the target Adjusted OIBDA CAGR will generally result in award recipients earning 50% to 150% of their target 2018 PSUs, subject to reduction or forfeiture based on individual performance. The earned 2018 PSUs will vest 50% on each of April 1, 2020 and 50% on October 1, 2020. The target Adjusted OIBDA CAGR for the 2018 PSUs was determined on October 26, 2018 and, accordingly, associated compensation expense has been recognized prospectively from that date. In April 2019, the compensation committee of our board of directors approved the grant of PSU s to executive officers and key employees (the 2019 PSU s) pursuant to a performance plan that is based on the achievement of a specified Adjusted OIBDA CAGR during the two-year period ending December 31, 2020. The 2019 PSU s include over- and under-performance payout opportunities should the Adjusted OIBDA CAGR exceed or fail to meet the target, as applicable. A performance range of 50% to 125% of the target Adjusted OIBDA CAGR will generally result in award recipients earning 50% to 150% of their target 2019 PSU s, subject to reduction or forfeiture based on individual performance. The earned 2019 PSU s will vest 50% on April 1, 2021 and 50% on October 1, 2021. 2019 CEO Performance Award In April 2019, the compensation committee of our board of directors approved the grant of RSA s and PSU s to our Chief Executive Officer (CEO) (the 2019 CEO Performance Award), comprising 670,000 RSA s and 1,330,000 PSU s, each with respect to Liberty Global Class B ordinary shares. Subject to certain terms, the RSA s vested on December 31, 2019. Subject to forfeitures, the satisfaction of performance conditions and certain other terms, the PSU s will vest as follows: 670,000 Liberty Global Class B ordinary shares on May 15, 2020 and 660,000 Liberty Global Class B ordinary shares on May 15, 2021. Prior to vesting, our CEO may change the PSU s to a mix of Liberty Global Class A, B or C ordinary shares of comparable value. The performance criteria for the 2019 CEO Performance Award PSU s is based on the achievement of our CEO’s performance conditions, as established by the compensation committee. 2019 Challenge Performance Awards In March 2019, the compensation committee of our board of directors approved a challenge performance award for executive officers and certain employees (the 2019 Challenge Performance Awards), which consists of a combination of PSAR s and PSU s, in each case divided on a 1:2 ratio based on Liberty Global Class A ordinary shares and Liberty Global Class C ordinary shares. Each PSU represents the right to receive one Liberty Global Class A ordinary share or one Liberty Global Class C ordinary share, as applicable. The performance criteria for the 2019 Challenge Performance Awards is based on the participant’s performance and achievement of individual goals during a performance period of three years ending on December 31, 2021. Subject to forfeitures, the satisfaction of performance conditions and certain other terms, 100% of each participant’s 2019 Challenge Performance Awards will vest on March 7, 2022. The PSAR s have a term of ten years and base prices equal to the respective market closing prices of the applicable class on the grant date. Share-based Award Activity — Liberty Global Ordinary Shares The following tables summarize the share-based award activity during 2019 with respect to awards issued by Liberty Global:
Options — Class A ordinary shares |  | Number of awards |  | Weighted average exercise price |  | Weighted average remaining contractual term |  | Aggregate intrinsic value
|  |  |  |  |  | in years |  | in millions
Outstanding at January 1, 2019 |  | 580,254 |  |  | $ | 27.51 |  |  |  |  |
Granted |  | 61,244 |  |  | $ | 26.47 |  |  |  |  |
Exercised |  | (53,240 | ) |  | $ | 7.10 |  |  |  |  |
Outstanding at December 31, 2019 |  | 588,258 |  |  | $ | 29.25 |  |  | 3.7 |  | $ | 0.7 |
Exercisable at December 31, 2019 |  | 447,042 |  |  | $ | 29.40 |  |  | 2.6 |  | $ | 0.7 |
Options — Class C ordinary shares |  | Number of awards |  | Weighted average exercise price |  | Weighted average remaining contractual term |  | Aggregate intrinsic value
|  |  |  |  |  | in years |  | in millions
Outstanding at January 1, 2019 |  | 2,667,506 |  |  | $ | 25.09 |  |  |  |  |
Granted |  | 1,364,721 |  |  | $ | 24.52 |  |  |  |  |
Forfeited |  | (349,474 | ) |  | $ | 24.79 |  |  |  |  |
Exercised |  | (176,185 | ) |  | $ | 6.92 |  |  |  |  |
Outstanding at December 31, 2019 |  | 3,506,568 |  |  | $ | 25.81 |  |  | 3.0 |  | $ | 1.7 |
Exercisable at December 31, 2019 |  | 2,820,918 |  |  | $ | 25.68 |  |  | 2.1 |  | $ | 1.7 |
SARs — Class A ordinary shares |  | Number of awards |  | Weighted average base price |  | Weighted average remaining contractual term |  | Aggregate intrinsic value
|  |  |  |  |  | in years |  | in millions
Outstanding at January 1, 2019 |  | 15,308,562 |  |  | $ | 32.41 |  |  |  |  |
Granted |  | 3,350,635 |  |  | $ | 24.92 |  |  |  |  |
Forfeited |  | (1,520,202 | ) |  | $ | 32.62 |  |  |  |  |
Exercised |  | (509,520 | ) |  | $ | 19.91 |  |  |  |  |
Impact of the sale of the Vodafone Disposal Group |  | (377,858 | ) |  | $ | 34.89 |  |  |  |  |
Outstanding at December 31, 2019 |  | 16,251,617 |  |  | $ | 31.18 |  |  | 3.9 |  | $ | — |
Exercisable at December 31, 2019 |  | 10,951,161 |  |  | $ | 32.66 |  |  | 2.4 |  | $ | — |
SARs — Class C ordinary shares |  | Number of awards |  | Weighted average base price |  | Weighted average remaining contractual term |  | Aggregate intrinsic value
|  |  |  |  |  | in years |  | in millions
Outstanding at January 1, 2019 |  | 34,401,980 |  |  | $ | 30.61 |  |  |  |  |
Granted |  | 6,701,270 |  |  | $ | 24.17 |  |  |  |  |
Forfeited |  | (3,042,500 | ) |  | $ | 31.49 |  |  |  |  |
Exercised |  | (1,599,608 | ) |  | $ | 19.25 |  |  |  |  |
Impact of the sale of the Vodafone Disposal Group |  | (778,280 | ) |  | $ | 33.57 |  |  |  |  |
Outstanding at December 31, 2019 |  | 35,682,862 |  |  | $ | 29.77 |  |  | 3.6 |  | $ | — |
Exercisable at December 31, 2019 |  | 25,082,821 |  |  | $ | 30.83 |  |  | 2.1 |  | $ | — |
PSARs — Class A ordinary shares |  | Number of awards |  | Weighted average base price |  | Weighted average remaining contractual term |  | Aggregate intrinsic value
|  |  |  |  |  | in years |  | in millions
Outstanding at January 1, 2019 |  | — |  |  | $ | — |  |  |  |  |
Granted |  | 4,477,343 |  |  | $ | 25.97 |  |  |  |  |
Forfeited |  | (405,727 | ) |  | $ | 25.97 |  |  |  |  |
Outstanding at December 31, 2019 |  | 4,071,616 |  |  | $ | 25.97 |  |  | 9.2 |  | $ | — |
Exercisable at December 31, 2019 |  | 1,118 |  |  | $ | 25.97 |  |  | 0.8 |  | $ | — |
PSARs — Class C ordinary shares |  | Number of awards |  | Weighted average base price |  | Weighted average remaining contractual term |  | Aggregate intrinsic value
|  |  |  |  |  | in years |  | in millions
Outstanding at January 1, 2019 |  | — |  |  | $ | — |  |  |  |  |
Granted |  | 8,954,686 |  |  | $ | 25.22 |  |  |  |  |
Forfeited |  | (811,454 | ) |  | $ | 25.22 |  |  |  |  |
Outstanding at December 31, 2019 |  | 8,143,232 |  |  | $ | 25.22 |  |  | 9.2 |  | $ | — |
Exercisable at December 31, 2019 |  | 2,236 |  |  | $ | 25.22 |  |  | 0.8 |  | $ | — |
RSUs — Class A ordinary shares |  | Number of awards |  | Weighted average grant-date fair value per share |  | Weighted average remaining contractual term
|  |  |  |  |  | in years
Outstanding at January 1, 2019 |  | 582,374 |  |  | $ | 31.85 |  |  |
Granted |  | 359,012 |  |  | $ | 25.09 |  |  |
Forfeited |  | (141,043 | ) |  | $ | 30.23 |  |  |
Released from restrictions |  | (284,847 | ) |  | $ | 31.34 |  |  |
Outstanding at December 31, 2019 |  | 515,496 |  |  | $ | 27.86 |  |  | 2.5
RSUs — Class B ordinary shares |  | Number of awards |  | Weighted average grant-date fair value per share |  | Weighted average remaining contractual term
|  |  |  |  |  | in years
Outstanding at January 1, 2019 |  | — |  |  | $ | — |  |  |
Granted |  | 48,786 |  |  | $ | 26.03 |  |  |
Outstanding at December 31, 2019 |  | 48,786 |  |  | $ | 26.03 |  |  | 0.2
RSUs — Class C ordinary shares |  | Number of awards |  | Weighted average grant-date fair value per share |  | Weighted average remaining contractual term
|  |  |  |  |  | in years
Outstanding at January 1, 2019 |  | 1,162,351 |  |  | $ | 31.02 |  |  |
Granted |  | 718,024 |  |  | $ | 24.35 |  |  |
Forfeited |  | (281,767 | ) |  | $ | 30.32 |  |  |
Released from restrictions |  | (572,598 | ) |  | $ | 30.29 |  |  |
Outstanding at December 31, 2019 |  | 1,026,010 |  |  | $ | 26.95 |  |  | 2.5
RSAs — Class B ordinary shares |  | Number of awards |  | Weighted average grant-date fair value per share |  | Weighted average remaining contractual term
|  |  |  |  |  | in years
Outstanding at January 1, 2019 |  | — |  |  | $ | — |  |  |
Granted |  | 670,000 |  |  | $ | 25.29 |  |  |
Released from restrictions |  | (670,000 | ) |  | $ | 25.29 |  |  |
Outstanding at December 31, 2019 |  | — |  |  | $ | — |  |  | —
PSUs — Class A ordinary shares |  | Number of awards |  | Weighted average grant-date fair value per share |  | Weighted average remaining contractual term
|  |  |  |  |  | in years
Outstanding at January 1, 2019 |  | 2,904,644 |  |  | $ | 28.22 |  |  |
Granted |  | 2,502,764 |  |  | $ | 25.44 |  |  |
Forfeited |  | (548,237 | ) |  | $ | 28.58 |  |  |
Released from restrictions |  | (1,416,391 | ) |  | $ | 31.04 |  |  |
Impact of the sale of the Vodafone Disposal Group |  | (54,409 | ) |  | $ | 24.03 |  |  |
Outstanding at December 31, 2019 |  | 3,388,371 |  |  | $ | 25.00 |  |  | 1.6
PSUs — Class B ordinary shares |  | Number of awards |  | Weighted average grant-date fair value per share |  | Weighted average remaining contractual term
|  |  |  |  |  | in years
Outstanding at January 1, 2019 |  | — |  |  | $ | — |  |  |
Granted |  | 1,330,000 |  |  | $ | 25.29 |  |  |
Outstanding at December 31, 2019 |  | 1,330,000 |  |  | $ | 25.29 |  |  | 0.9
PSUs — Class C ordinary shares |  | Number of awards |  | Weighted average grant-date fair value per share |  | Weighted average remaining contractual term
|  |  |  |  |  | in years
Outstanding at January 1, 2019 |  | 5,814,437 |  |  | $ | 27.39 |  |  |
Granted |  | 5,005,528 |  |  | $ | 24.69 |  |  |
Forfeited |  | (1,098,252 | ) |  | $ | 27.71 |  |  |
Released from restrictions |  | (2,836,847 | ) |  | $ | 30.06 |  |  |
Impact of the sale of the Vodafone Disposal Group |  | (108,818 | ) |  | $ | 23.41 |  |  |
Outstanding at December 31, 2019 |  | 6,776,048 |  |  | $ | 24.29 |  |  | 1.6
Share-based Award Activity — Liberty Global Ordinary Shares Held by Former Liberty Global Employees The following tables summarize the share-based awards issued by Liberty Global held by former employees of the company that (i) became employees of Liberty Latin America as a result of the Split-off Transaction and (ii) were employees of entities included in the Vodafone Disposal Group. We do not recognize share-based compensation expense with respect to these awards.
|  | Number of awards |  | Weighted average exercise or base price |  | Weighted average remaining contractual term |  | Aggregate intrinsic value
Options and SARs: |  |  |  |  |  |  |  |
Class A: |  |  |  |  |  |  |  |
Outstanding |  | 1,509,447 |  |  | $ | 33.96 |  |  | 2.0 |  | $ | — |
Exercisable |  | 1,429,022 |  |  | $ | 33.95 |  |  | 1.8 |  | $ | — |
Class C: |  |  |  |  |  |  |  |
Outstanding |  | 3,374,752 |  |  | $ | 32.08 |  |  | 1.8 |  | $ | — |
Exercisable |  | 3,213,870 |  |  | $ | 32.02 |  |  | 1.7 |  | $ | — |
|  | Number of awards |  | Weighted average grant date fair value per share |  | Weighted average remaining contractual term
Outstanding RSUs and PSUs: |  |  |  |  |  |
Class A: |  |  |  |  |  |
RSUs |  | 3,969 |  |  | $ | 33.23 |  |  | 1.3
PSUs |  | 54,990 |  |  | $ | 24.05 |  |  | 0.8
Class C: |  |  |  |  |  |
RSUs |  | 7,923 |  |  | $ | 32.33 |  |  | 1.3
PSUs |  | 109,980 |  |  | $ | 23.44 |  |  | 0.8

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