LISI GROUP - 2018 Financial report

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2.7.2 I Share-based payments
2.7.2.1 - Share purchase options
The Company had no stock options plans at December 31, 2018.
2.7.2.2 - Award of performance shares
Acting on the recommendation of the Compensation Committee, LISI’s
BoardofDirectorsdecided,onDecember17,2015,toallocateperformance
shares to members of the Executive Committee and to members of the
mainManagementCommitteesforthethreeLISIGroupdivisions,subject
to their meeting certain performance targets. The fulfillment of these
criteriaattheendof2017,namelytheGroupRNAandthedivisionRNA(see
definition in paragraph 2.2.20 “Indicators” in this chapter), led to this plan
being achieved during financial year 2018 at 64% for LISI SA, 64% for the
LISIAEROSPACEdivision,80%fortheLISIAUTOMOTIVEdivisionand50%
fortheLISIMEDICALdivision.Thefinalcostwasallocatedtothedivisions.
Similar plans were set up in 2016, 2017 and 2018 to the extent that the
Board of Directors meetings held on December 20, 2016, December 13,
2017andDecember12,2018,renewedthestartofanewplanundersimilar
terms.
The fair value of these benefits is recognized in the income statement
linearly over the vesting period.
The fair value of the benefits thus granted was reported in 2018 under
payroll expenses for €0.3 million against shareholders’ equity. This cost
was not allocated to divisions, and remains an expense at the LISI S.A.
level until the definitive realization of the plan.
2.7.3 IRelated-party information/Remuneration
of members of management bodies
2.7.3.1 - Related-party information
Related parties include the parent company, company managers,
directors and Board members. There is no other jointly-owned entity or
entity recognized by equity method, or joint shareholder, or business
under joint control or significant influencewithwhich the LISI Groupmay
have carried out transactions worthy of investigation.
TheonlyrelationshipoftheGroupwithitsparentcompany(CID)isthrough
the capital holding. On the other hand, LISI S.A. provides support to its
subsidiaries in the fields of accounting, finance, strategy and law.
2.7.3.2 - Remuneration of managers and directors
Expenses for the period Liabilities
(in thousands of euros) 2018 2017 2018 2017
Gross current benefits (salaries, bonuses, etc.) 1,205 1,257
Post-employment benefits (IFC) 32 83 405 373
Other non-current benefits
Termination benefits
Equity compensation benefits (187) (51) 146 333
Total remuneration 1,050 1,289 550 706
The main directors will receive remuneration in the form of current
benefits, post-employment benefits and share-based payments. With
regard to this category, in 2016, 2017 and 2018, both directors of LISI S.A.
received performance shares in accordance with the same terms and
conditions as other members of the divisional Executive Committees.
With regard to these plans, the corporate officers shall retain in
nominative form 20% of any performance shares which may have been
allocated to themuntil the termination of their employment.
Concerningtheretirementgratuities,nospecificbenefit iscontractually
agreed upon, apart from the benefits retirement.
2.7.4 ICommitments
TheGroupdrawsupannuallyadetailedlistofallcontractualcommitments,
financial and commercial commitments, and contingent liabilities to
which LISI S.A. and/or its subsidiaries are party or exposed. This list is
regularly updated by the departments concerned and reviewed by Group
Management. In order to ensure that the information on this list is
complete,accurateandconsistent,specialcontrolprocedureshavebeen
implemented, including in particular:
−− the regular examination of the minutes of Shareholders’ General
Meetings, Board Meetings, associated Committees that deal with
contractual commitments, disputes and authorizations for the
purchase or disposal of assets;
−− review of sureties and guarantees as well as loan agreements and any
other banking commitments, in conjunction with the banks and
financial institutions;
−− review, together with both internal and external legal counsels, of
dispute and legal proceedings before the courts, environmental
questions, and themeasurement of liabilities that might arise;
−− examinationoftax inspectors’reportsandreassessmentnoticesfrom
previous financial years;
−− examination, together with those in charge of risk management,
insurance brokers and agents of the insurance companies with which
the Group has taken out its insurance policies to cover risks in respect
of contingent liabilities;
−− examination of transactions with related parties in respect of
guarantees or other commitments given or received;
−− in general, review of all contracts and contractual commitments.