Share-based compensation (Tables)

3 Months Ended

Mar. 28, 2020

Share-based Payment Arrangement [Abstract]

Summary of movements in options outstanding


	Three months ended
	March 28, 2020
	Number of options	Weighted average exercise price $
Outstanding at the beginning of the period:
—Tier I	3,825,855	$	7.07
—Tier II	4,405,340	$	7.01
—Tier III	4,405,340	$	7.01
—Tier IV	4,405,340	$	10.52
—SARs	772,450	$	8.72
—Share options	1,610,485	$	16.69
—Premium-priced options	796,460	$	19.00
	20,221,270	$	9.09
Granted during the period:




—SARs	69,361	$	12.08
—Share options	1,193,114	$	12.55

	1,262,475	$	12.52
Forfeited during the period:
—Tier I	(86,581)	$	6.74
—Tier II	(404,446)	$	6.63
—Tier III	(404,446)	$	6.63
—Tier IV	(404,446)	$	9.94

—Share options	(89,803)	$	16.46

	(1,389,722)	$	8.24









Exercised during the period:
—Tier I	(318,607)	$	6.60






	(318,607)	$	6.60
Outstanding at the end of the period:
—Tier I	3,420,667	$	7.12
—Tier II	4,000,894	$	7.05
—Tier III	4,000,894	$	7.05
—Tier IV	4,000,894	$	10.58
—SARs	841,811	$	9.00
—Share options	2,713,796	$	14.88
—Premium-priced options	796,460	$	19.00
	19,775,416	$	9.42

Exercisable at the end of the period	3,080,858	$	8.79
Vested and expected to vest at the end of the period	7,714,079	$	11.24

Schedule of RSU and PRSU activity

Summary of movements in RSUs and PRSUs outstanding


	Three months ended
	March 28, 2020
	Number of awards	Weighted average grant date fair value $
Outstanding at the beginning of the period:
—RSUs	718,269	$	16.20
—PRSUs	248,550	20.07
	966,819	$	17.20
Granted during the period:
—RSUs	1,126,523	$	12.01
—PRSUs	365,258	14.41
	1,491,781	$	12.60
Forfeited during the period:
—RSUs	(35,135)	$	16.46
—PRSUs	(28,552)	20.07
	(63,687)	$	18.08




Vested during the period:
—RSUs	(218,556)	$	16.41

	(218,556)	$	16.41
Outstanding at the end of the period:
—RSUs	1,591,101	$	13.20
—PRSUs	585,256	16.53
	2,176,357	$	14.10

Schedule of share based compensation valuation techniques

The premium-priced options and PRSUs were valued using Monte Carlo simulations. As Gates only has volatility data for its shares for the period since its initial public offering, this volatility has been weighted with the debt-levered volatility of a peer group of public companies in order to determine the expected volatility over the expected option life. The expected option life represents the period of time for which the options are expected to be outstanding and is based on consideration of the contractual life of the option, option vesting period, and historical exercise patterns. The weighted average fair values and relevant assumptions were as follows:


	Three months ended
	March 28, 2020			March 30, 2019
Grant date fair value:
—SARs	$	4.59		$	5.88
—Share options	$	4.78		$	5.88
—Premium-priced options	n/a			$	5.65
—RSUs	$	12.01		$	16.46
—PRSUs	$	14.41		$	20.07

Inputs to the model:
—Expected volatility - SARs	37.7		%	31.9		%
—Expected volatility - share options	37.6		%	31.9		%
—Expected volatility - premium-priced options	n/a			31.9		%
—Expected volatility - PRSUs	40.4		%	32.8		%

—Expected option life for SARs	6.0			6.0
—Expected option life for share options	6.0			6.0
—Expected option life for premium-priced options	n/a			7.0



—Risk-free interest rate:
SARs	1.25		%	2.51		%
Share options	1.33		%	2.51		%
Premium-priced options	n/a			2.53		%
PRSUs	1.29		%	2.48		%