Notes to the Group Financial Statements (continued)
for the year ended 31st December 2012
12. Directors and employees (continued)
Employee numbers and costs
The Group employs staff in its branches and head offices. Aggregate payroll costs of these employees were:
2012 2011
£’000 £’000
Wages and salaries 124,597 107,598
Social security costs 12,702 10,885
Pension costs 1,917 2,111
total employee costs 139,216 120,594
Subcontractor costs 3,008 4,192
total employee and subcontractor costs1 142,224 124,786
Share-based payment expense (see below) 647 787
1
The total employee and subcontractor costs exclude employees redundancy costs of £954,000 (2011 – £266,000), which have been shown under exceptional costs (note 7).
The monthly staff numbers (including Directors) during the year averaged 4,113 (2011 – 3,930).
2012 2011
Estate Agency and Related Services 3,315 3,083
Surveying and Valuation Services 798 847
4,113 3,930
Share-based payments
Long Term Incentive Plan (LTIP)
The Group operates a LTIP (an equity-settled share-based remuneration scheme) for certain employees. Under the LTIP, the options vest if the
individual remains an employee of the Group after a three year period, unless the individual has left under certain ‘good leaver’ terms in which case
the options may vest earlier providing the performance conditions are met.
30% of the options vest based on the TSR of LSL as compared to the FTSE 250 index (excluding investment trusts) over the three year performance
period:
• If the Group is in the top 25% percentile, all of these options will vest;
• If the Group is at the median 35% will vest;
• Straight line vesting between median and top 25% percentile; and
• Below the median no options vest.
70% of the options are based on the Adjusted EPS performance over the three financial years starting with the financial year in which the LTIP award
is granted:
• If growth >12% pa – 100% vest;
• If growth is 8% pa – 25% vest;
• Straight line vesting between 8% pa and 12% pa; and
• If growth is below 8% pa no options vest.
Joint Share Ownership Plan (JSOP)
Awards under the JSOP participate in increases in the value of Ordinary Shares above the share price at the date of grant. Awards comprise of an
interest in jointly owned shares (i.e. Ordinary Shares held in co-ownership with the Trust) and a stock appreciation right. A key feature of the JSOP is
that individuals are required to purchase their interest in the jointly owned shares and have thereby put their personal capital at risk.
78 ANNUAL REPORT AND ACCOUNTS 2012