Share-based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

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:



	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
	in millions
Liberty Global:
Performance-based incentive awards (a)	$	57.0	$	28.9	$	106.3	$	96.8
Non-performance based incentive awards (b)	27.8		31.6		93.9		82.6
Other (c)	6.9		8.0		19.1		30.5
Total Liberty Global	91.7		68.5		219.3		209.9
Other	12.7		5.5		24.1		18.4
Total	$	104.4	$	74.0	$	243.4	$	228.3
Included in:
Other operating expense	$	2.5	$	1.1	$	4.8	$	3.0
SG&A expense	101.9		72.9		238.6		225.3
Total	$	104.4	$	74.0	$	243.4	$	228.3

_______________

(a)

Includes share-based compensation expense related to (i) performance-based restricted share units (PSUs), (ii) a challenge performance award plan for certain executive officers and key employees (the 2019 Challenge Performance Awards), which included performance-based share appreciation rights (PSARs) and PSUs granted in March 2019, and (iii) the performance-based portion of a performance award granted to our Chief Executive Officer in May 2019 (the 2019 CEO Performance Award).

(b)

In 2019, we changed our policy to provide that all new equity grants would have ten-year contractual terms in order to more closely align with common market practice. In April 2020, the compensation committee of our board of directors approved the extension of the expiration dates of outstanding share appreciation rights (SARs) and director options granted in 2013 from a seven-year term to a ten-year term in order to align with this new policy. Accordingly, the Black-Scholes fair values of the outstanding awards increased, resulting in the recognition of an aggregate incremental share-based compensation expense of $18.9 million during the second quarter of 2020. The 2019 amounts include share-based compensation expense related to the restricted share awards (RSAs) issued under the 2019 CEO Performance Award.

(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. 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.

The following table provides the aggregate number of options, SARs and PSARs with respect to awards issued by Liberty Global that were (i) outstanding and (ii) exercisable as of September 30, 2020:



	Class A			Class C
	Gross number of shares underlying option, SAR and PSAR awards (a)	Weighted Average exercise or base price		Gross number of shares underlying option, SAR and PSAR awards (a)	Weighted Average exercise or base price
Held by Liberty Global employees:
Outstanding	23,912,350	$	27.19	52,501,482	$	26.07
Exercisable	11,650,343	$	32.33	27,338,053	$	30.36

Held by former Liberty Global employees (b):
Outstanding	1,428,077	$	34.09	3,176,210	$	32.22
Exercisable	1,403,436	$	34.07	3,126,939	$	32.18

_______________

(a)

Amounts represent the gross number of shares associated with option, SAR and PSAR awards issued to our current and former employees and our directors. Our company settles SARs and PSARs on a net basis when exercised by the award holder, whereby the number of shares issued represents the excess value of the award based on the market price of the respective Liberty Global shares at the time of exercise relative to the award’s exercise price. In addition, the number of shares issued is further reduced by the amount of the employee’s required income tax withholding.


(b)	Amounts represent certain share-based awards that continue to be held by former employees of Liberty Global subsequent to certain split-off or disposal transactions. Although we do not recognize share-based compensation expense with respect to these awards, any future exercises of these SARs and PSARs by such former employees will increase the number of our outstanding ordinary shares.

The following table provides the aggregate number of restricted share units (RSUs) and PSUs that were outstanding as of September 30, 2020. The number of shares to be issued on the vesting date of these awards will be reduced by the amount of the employee’s required income tax withholding.



	Class A	Class B	Class C
Held by Liberty Global employees:
RSUs	2,501,418	—	4,995,466
PSUs	2,736,957	660,000	5,473,398
Held by former Liberty Global employees (a):
RSUs	880	—	1,748
PSUs	24,521	—	49,034

_______________

(a)

Amounts represent certain share-based awards that continue to be held by former employees of Liberty Global subsequent to certain split-off or disposal transactions. Although we do not recognize share-based compensation expense with respect to these awards, the future vesting of these RSUs and PSUs will increase the number of our outstanding ordinary shares.