Note 7 - Employee data
7.1 NUMBER OF EMPLOYEES
The average number of employees of fully consolidated companies (excluding seconded employees) breaks down as follows by division:
| 2019 | 2018 (*) | |
|---|---|---|
| Lagardère Publishing | 7 443 | 7 413 |
| Lagardère Travel Retail | 16 216 | 15 253 |
| Other Activities (target scope) | 1 286 | 1 532 |
| Lagardère Active – non-retained assets | 1 744 | 2 561 |
| Total | 26 689 | 26 759 |
(*) Average full-time equivalent employees relate to Lagardère Sports and have been restated in accordance with IFRS 5.
The average number of employees (excluding seconded employees) at Lagardère Sports was 1,286 at 31 December 2019 and 1,284 at 31 December 2018.
7.2 PAYROLL COSTS
| 2019 | 2018 (*) | |
|---|---|---|
| Wages and salaries | 1 332 | 1 294 |
| Payroll taxes | 249 | 273 |
| Share-based payments | 6 | 12 |
| Total | 1 587 | 1 579 |
(*) Payroll costs attributable to Lagardère Sports have been reclassified within discontinued operations in accordance with IFRS 5 (see note 4.3).
7.3 SHARE-BASED PAYMENTS
In accordance with the principles described in note 3.4 “Sharebased payments”, free shares awarded were measured at fair value at the grant date.
The characteristics of outstanding free share awards relating both to continuing operations and discontinued operations (Lagardère Sports) are shown below.
Free share award plans
From 2016 to 2019, the Group set up plans to award free shares to employees, the Co-Managing Partners and members of the Enlarged Committee (the Lagardère Media Operating Committee up to May 2016):
- 9 May 2016 plans: 829,660 shares;
- 6 April 2017 plans: 817,660 shares;
- 16 April 2018 plans: 812,460 shares;
- 8 April 2019 plans: 474,990 shares;
- 14 May 2019 plans: 232,370 shares;
- 10 October 2019 plans: 100,000 shares.
For Group employees who are beneficiaries of the 9 May 2016, 6 April 2017, 16 April 2018, 8 April 2019 and 10 October 2019 plans, these plans do not include any performance conditions. The shares vest definitively only after a three-year period, provided employee beneficiaries who are tax-resident in France have remained in the Group’s employment throughout that time. For beneficiaries who are not tax-resident in France, the shares vest definitively at the end of a four-year period, provided that the beneficiaries have remained in the Group’s employment for three years.
For the Group’s Co-Managing Partners and the members of the Enlarged Committee, who are beneficiaries of the 9 May 2016,
6 April 2017, 16 April 2018, 14 May 2019 and 10 October 2019 plans, the shares will only vest subject to:
- the beneficiaries remaining with the Group until at least 9 May 2019, 6 April 2020, 17 April 2021, 15 May 2022 and 11 October 2022, respectively, under the 2016, 2017, 2018 and 2019 plans;
- and:
- for plans awarded in 2018 and earlier, achievement of objectives based on criteria internal to the Group (consolidated recurring operating profit and net cash from operating activities), with the number of shares awarded reduced accordingly if these objectives are not met;
- for plans awarded in 2019, 80% of the award is subject to the achievement of objectives based on criteria internal to the Group (recurring operating profit of fully consolidated companies, free cash flow, and proportion of women in senior management), with the number of shares awarded reduced accordingly if these objectives are not met. The remaining 20% of the award is subject to meeting criteria linked to market conditions (relative performance of Lagardère SCA’s Total Shareholder Return), with no adjustment to the corresponding plan expense if these objectives are not met.
Assumptions used to calculate fair value
The assumptions underlying the plans for which an expense was recognised in the 2019 and 2018 financial statements were as follows:
| Free shares | ||||||
|---|---|---|---|---|---|---|
| 10 October 2019 Plan |
14 May 2019 Plan |
8 April 2019 Plan |
16 April 2018 Plan |
6 April 2017 Plan |
9 May 2016 Plan |
|
| Share price at grant date | 19,97 € | 22,16 € | 23,46 € | 23,13 € | 27,51 € | 22,01 € |
| Expected dividend payout rate | 6,5 % | 5,9 % | 5,5 % | 5,6 % | 4,7 % | 5,9 % |
Share-based payment expense recognised by fully consolidated companies reflects the estimated achievement rate for the performance conditions applicable to the plans.
Share-based payment expense recognised by fully consolidated companies in 2019 amounted to €7 million, including €6 million relating to continuing operations (€13 million and €12 million, respectively, in 2018).