Share-based Compensation | Share-based Compensation 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: Year ended December 31, 2022 2021 2020 in millions Liberty Global: Non-performance based incentive awards (a) $ 133.5 $ 168.6 $ 134.1 Performance-based incentive awards (b) 7.1 59.6 127.4 Other (c) 30.8 33.6 46.2 Total Liberty Global 171.4 261.8 307.7 Telenet share-based incentive awards (d) 10.9 35.1 35.5 Other 9.8 11.2 4.8 Total $ 192.1 $ 308.1 $ 348.0 Included in: Other operating expenses $ 4.9 $ 13.7 $ 7.6 SG&A expenses 187.2 294.4 340.4 Total $ 192.1 $ 308.1 $ 348.0 _______________ (a) In April 2021, with respect to 2014 and 2015 grants, and in April 2020, with respect to 2013 grants, the compensation committee of our board of directors approved the extension dates of outstanding SARs and director options from a seven-year term to a ten-year term. Accordingly, the Black-Scholes fair values of the respective outstanding awards increased, resulting in the recognition of an aggregate incremental share-based compensation expense of $22.7 million and $18.9 million during 2021 and 2020, respectively. (b) Includes share-based compensation expense related to (i) our 2019 Challenge Performance Awards and (ii) in the 2021 and 2020 periods, PSUs and our 2019 CEO Performance Award, each as defined and described below. (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. In addition, the 2022 and 2021 amounts include compensation expense related to the 2022 and 2021 Ventures Incentive Plans, each as defined and described below. (d) Represents the share-based compensation expense associated with Telenet’s share-based incentive awards, which, at December 31, 2022, included performance- and non-performance-based stock option awards with respect to 3,519,920 Telenet shares. These stock option awards had a weighted average exercise price of €31.43 ($33.66). As of December 31, 2022, $146.2 million of total unrecognized compensation cost related to our Liberty Global share-based incentive awards is expected to be recognized by our company over a weighted-average period of approximately 1.6 years. The following table summarizes certain information related to the share-based incentive awards granted and exercised with respect to Liberty Global ordinary shares (includes amounts related to awards held by employees of our discontinued operations, unless otherwise noted): Year ended December 31, 2022 2021 2020 Assumptions used to estimate fair value of options and SARs granted: Risk-free interest rate 2.27 - 3.09% 0.48 - 1.13% 0.13 - 0.47% Expected life 3.7 - 6.2 years 3.7 - 6.2 years 3.2 - 6.2 years Expected volatility 33.5 - 38.1% 30.8 - 33.2% 34.6 - 38.8% Expected dividend yield none none none Weighted average grant-date fair value per share of awards granted: Options $ 9.90 $ 8.75 $ 5.92 SARs $ 7.50 $ 6.79 $ 4.19 RSUs $ 25.51 $ 25.69 $ 15.66 Total intrinsic value of awards exercised (in millions): Options $ 0.5 $ 1.4 $ 1.2 SARs $ 7.0 $ 28.9 (a) PSARs $ 0.2 $ 0.1 (a) Cash received from exercise of options (in millions) $ 13.0 $ 8.9 $ 2.2 Income tax benefit related to share-based compensation of our continuing operations (in millions) $ 1.3 $ 14.9 $ 36.9 _______________ (a) There were no exercises of this award type made during the indicated period. Share Incentive Plans — Liberty Global Ordinary Shares 2014 Incentive Plans As of December 31, 2022, we are authorized to grant incentive awards under the “ Liberty Global 2014 Incentive Plan ” and the “ Liberty Global 2014 Nonemployee Director Incentive Plan ” (collectively, the 2014 Incentive Plans ). Generally, we may grant non-qualified share options, SARs, PSARs, restricted shares, RSUs, cash awards, performance awards or any combination of the foregoing under either of these incentive plans (collectively, “ awards ”). Ordinary shares issuable pursuant to awards made under these incentive plans will be made available from either authorized but unissued shares or shares that have been issued but reacquired by our company. Awards may be granted at or above fair value in any class of ordinary shares. The maximum number of Liberty Global shares with respect to which awards may be issued under the Liberty Global 2014 Incentive Plan and the Liberty Global 2014 Nonemployee Director Incentive Plan is 155 million (of which no more than 50.25 million shares may consist of Class B ordinary shares) and 10.5 million, respectively, in each case, subject to anti-dilution and other adjustment provisions in the respective plan. As of December 31, 2022, the Liberty Global 2014 Incentive Plan and the Liberty Global 2014 Nonemployee Director Incentive Plan had 49,782,418 and 7,336,388 ordinary shares available for grant, respectively. Awards (other than performance-based awards) under the Liberty Global 2014 Incentive Plan generally (i) vest (a) prior to 2020, 12.5% on the six-month anniversary of the grant date and then at a rate of 6.25% each quarter thereafter and (b) commencing in 2020, annually over a three-year period, and (ii) expire (1) prior to 2019, seven years after the grant date and (2) commencing in 2019, 10 years after the grant date. Awards (other than RSUs) issued under the Liberty Global 2014 Nonemployee Director Incentive Plan generally vest in three equal annual installments, provided the director continues to serve as director immediately prior to the vesting date, and expire seven years after the grant date. Commencing with awards made in 2019, the term was increased to 10 years. RSUs vest on the date of the first annual general meeting of shareholders following the grant date. These awards may be granted at or above fair value in any class of ordinary shares. 2022 Ventures Incentive Plan In April 2022, the compensation committee of our board of directors approved the “ 2022 Ventures Incentive Plan ”. The 2022 Ventures Incentive Plan was provided to executive officers and other key employees and is based on the performance of the Liberty Global Ventures Portfolio (the “ Portfolio ”), which is measured by assessing the fair value of the Portfolio over a three-year period that began on December 31, 2021 and ends on December 31, 2024. An initial fair value assessment was performed for the Portfolio as of December 31, 2021 by an independent third-party valuation specialist. Payout will be denominated in cash and will be assessed at the end of the three-year period using eligible participants’ initial contribution between 10% and 50% of their 2022 annual target equity value (which contributed amount is in lieu of their normal annual equity grant). The compensation committee has the discretion to settle the final payout amount in (i) cash or (ii) Liberty Global Class A and Class C ordinary shares based on the change in the Portfolio’s value. Subject to forfeitures, 100% of each participant’s payout will vest on or around March 15, 2025. In order to receive the payout, participants are required to remain employed through the final vesting date. The 2022 Ventures Incentive Plan awards are liability classified due to the fact that the final payout under this plan will be denominated in cash and may be settled in a variable number of shares. At December 31, 2022, the estimated fair value of the final payout under the 2022 Ventures Incentive Plan was $9.7 million. 2021 Ventures Incentive Plan In April 2021, the compensation committee of our board of directors approved the “ 2021 Ventures Incentive Plan ”. The 2021 Ventures Incentive Plan was provided to executive officers and other key employees and is based on the performance of the Portfolio, which is measured by assessing the fair value of the Portfolio over a three-year period that began on December 31, 2020 and ends on December 31, 2023. An initial fair value assessment was performed for the Portfolio as of December 31, 2020 by an independent third-party valuation specialist. Payout will be denominated in cash and will be assessed at the end of the three-year period using eligible participants’ initial contribution between 10% and 100% of their 2021 annual target equity value (which contributed amount is in lieu of their normal annual equity grant). The compensation committee has the discretion to settle the final payout amount in (i) cash or (ii) Liberty Global Class A and Class C ordinary shares based on the change in the Portfolio’s value. Subject to forfeitures, 100% of each participant’s payout will vest on March 31, 2024. In order to receive the payout, participants are required to remain employed through the final vesting date. The 2021 Ventures Incentive Plan awards are liability classified due to the fact that the final payout under this plan will be denominated in cash and may be settled in a variable number of shares. At December 31, 2022, the estimated fair value of the final payout under the 2021 Ventures Incentive Plan was $16.1 million. Performance Awards The following is a summary of the material terms and conditions with respect to our performance-based awards for certain executive officers and key employees. 2019 CEO Performance Award In April 2019, the compensation committee of our board of directors approved the grant of RSAs and PSUs to our Chief Executive Officer ( CEO ) (the 2019 CEO Performance Award ), comprising 670,000 RSAs and 1,330,000 PSUs, each with respect to Liberty Global Class B ordinary shares. The RSAs vested on December 31, 2019, 670,000 PSUs vested on May 15, 2020, and the remaining 660,000 PSUs vested on May 15, 2021. The performance criteria for the 2019 CEO Performance Award PSUs was based on the achievement of our CEO’s performance conditions, as established by the compensation committee. 2019 Challenge Performance Awards In March 2019, the compensation committee of our board of directors approved a challenge performance award for executive officers and certain employees (the 2019 Challenge Performance Awards ), which consists of a combination of PSARs and PSUs, in each case divided on a 1:2 ratio based on Liberty Global Class A ordinary shares and Liberty Global Class C ordinary shares. Each PSU represents the right to receive one Liberty Global Class A ordinary share or one Liberty Global Class C ordinary share, as applicable. The performance criteria for the 2019 Challenge Performance Awards is based on the participant’s performance and achievement of individual goals during the three-year period ended December 31, 2021. Subject to forfeitures, the satisfaction of performance conditions and certain other terms, 100% of each participant’s 2019 Challenge Performance Awards were earned and vested on March 7, 2022. The PSARs have a term of ten years and base prices equal to the respective market closing prices of the applicable class on the grant date. Liberty Global PSUs In April 2019, the compensation committee of our board of directors approved the grant of PSUs to executive officers and key employees (the 2019 PSUs ). The performance plan for the 2019 PSUs covered the two-year period ended December 31, 2020 and included a performance target based on the achievement of a specified compound annual growth rate ( CAGR ) in a consolidated Adjusted EBITDA metric (as defined in note 19). The performance target was adjusted for events such as acquisitions, dispositions and changes in foreign currency exchange rates that affect comparability ( Adjusted EBITDA CAGR ). The 2019 PSUs required delivery of an Adjusted EBITDA CAGR of 1.38% and included over- and under-performance payout opportunities should the Adjusted EBITDA CAGR exceed or fail to meet the target, as applicable. Participants earned 65% of their targeted awards under the 2019 PSUs which vested 50% on each of April 1, 2021 and October 1, 2021. During 2018, the compensation committee of our board of directors approved the grant of PSUs to executive officers and key employees (the 2018 PSUs ) pursuant to a performance plan that was based on the achievement of a specified Adjusted EBITDA CAGR during the two-year period ended December 31, 2019. Participants earned 106.1% of their targeted awards under the 2018 PSUs, which vested 50% on each of April 1, 2020 and October 1, 2020. The target Adjusted EBITDA CAGR for the 2018 PSUs was determined on October 26, 2018 and, accordingly, associated compensation expense was recognized prospectively from that date. Share-based Award Activity — Liberty Global Ordinary Shares The following tables summarize the share-based award activity during 2022 with respect to awards issued by Liberty Global. 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, with respect to share-based awards held by Liberty Global employees, the number of shares to be issued upon vesting or exercise is reduced by the amount of the employee’s required income tax withholding. Options — Class A ordinary shares Number of awards Weighted Weighted Aggregate in years in millions Outstanding at January 1, 2022 580,518 $ 30.38 Granted 50,121 22.04 Forfeited (10,447) 24.48 Exercised (11,934) 19.28 Outstanding at December 31, 2022 608,258 $ 30.02 3.7 $ — Exercisable at December 31, 2022 510,074 $ 31.25 2.7 $ — Options — Class C ordinary shares Number of awards Weighted Weighted Aggregate in years in millions Outstanding at January 1, 2022 2,244,752 $ 25.76 Granted 297,787 25.32 Forfeited (22,925) 24.13 Exercised (54,320) 20.46 Outstanding at December 31, 2022 2,465,294 $ 25.84 5.2 $ 1.7 Exercisable at December 31, 2022 1,787,439 $ 26.75 4.0 $ 1.1 SARs — Class A ordinary shares Number of awards Weighted Weighted Aggregate in years in millions Outstanding at January 1, 2022 21,077,203 $ 27.05 Granted 1,481,151 25.79 Forfeited (1,025,686) 29.39 Exercised (300,588) 17.37 Impact of the sale of UPC Poland (48,440) 28.20 Outstanding at December 31, 2022 21,183,640 $ 26.98 4.9 $ 10.2 Exercisable at December 31, 2022 14,135,730 $ 28.52 3.3 $ 6.3 SARs — Class C ordinary shares Number of awards Weighted Weighted Aggregate in years in millions Outstanding at January 1, 2022 49,605,813 $ 26.18 Granted 2,962,302 26.26 Forfeited (2,023,151) 28.65 Exercised (675,795) 17.24 Impact of the sale of UPC Poland (91,011) 27.60 Outstanding at December 31, 2022 49,778,158 $ 26.20 5.1 $ 30.3 Exercisable at December 31, 2022 30,354,881 $ 27.45 3.1 $ 18.7 PSARs — Class A ordinary shares Number of awards Weighted Weighted Aggregate in years in millions Outstanding at January 1, 2022 3,352,572 $ 25.97 Forfeited (56,710) 25.97 Exercised (591) 25.97 Impact of the sale of UPC Poland (13,460) 25.97 Outstanding at December 31, 2022 3,281,811 $ 25.97 6.2 $ — Exercisable at December 31, 2022 3,281,811 $ 25.97 6.2 $ — PSARs — Class C ordinary shares Number of awards Weighted Weighted Aggregate in years in millions Outstanding at January 1, 2022 6,705,149 $ 25.22 Forfeited (107,513) 25.22 Exercised (153,683) 25.22 Impact of the sale of UPC Poland (26,920) 25.22 Outstanding at December 31, 2022 6,417,033 $ 25.22 6.2 $ — Exercisable at December 31, 2022 6,417,033 $ 25.22 6.2 $ — RSUs — Class A ordinary shares Number of awards Weighted Weighted in years Outstanding at January 1, 2022 2,625,839 $ 21.16 Granted 1,018,770 25.21 Forfeited (155,581) 23.09 Released from restrictions (1,503,607) 21.38 Impact of the sale of UPC Poland (758) 22.04 Outstanding at December 31, 2022 1,984,663 $ 22.92 1.3 RSUs — Class B ordinary shares Number of awards Weighted Weighted in years Outstanding at January 1, 2022 — $ — Granted 71,051 24.46 Released from restrictions (63,161) 24.36 Outstanding at December 31, 2022 7,890 $ 25.24 0.2 RSUs — Class C ordinary shares Number of awards Weighted Weighted in years Outstanding at January 1, 2022 5,250,912 $ 20.63 Granted 2,037,538 25.69 Forfeited (310,642) 22.85 Released from restrictions (3,007,514) 21.02 Impact of the sale of UPC Poland (1,516) 23.19 Outstanding at December 31, 2022 3,968,778 $ 22.75 1.3 PSUs — Class A ordinary shares Number of awards Weighted Weighted in years Outstanding at January 1, 2022 933,511 $ 25.97 Forfeited (2,929) 25.97 Released from restrictions (930,582) 25.97 Outstanding at December 31, 2022 — $ — — PSUs — Class C ordinary shares Number of awards Weighted Weighted in years Outstanding at January 1, 2022 1,867,022 $ 25.22 Forfeited (5,856) 25.22 Released from restrictions (1,861,166) 25.22 Outstanding at December 31, 2022 — $ — — Share-based Award Activity — Liberty Global Ordinary Shares held by former Liberty Global employees The following tables summarize the share-based awards held by former employees of Liberty Global subsequent to certain split-off or disposal transactions. Any future exercises of SARs or PSARs, or vesting of RSUs will increase the number of our outstanding ordinary shares. Number of awards Weighted average exercise or base price Weighted average remaining contractual term Aggregate intrinsic value in years in millions Options, SARs and PSARs: Class A: Outstanding 1,621,675 $ 31.58 1.9 $ 0.2 Exercisable 1,546,159 $ 32.03 1.6 $ 0.1 Class C: Outstanding 3,651,358 $ 29.96 2.1 $ 0.7 Exercisable 3,500,357 $ 30.31 1.9 $ 0.4 Number of awards Weighted average grant-date fair value per share Weighted average remaining contractual term in years Outstanding RSUs: Class A 32,581 $ 23.27 0.9 Class C 66,370 $ 22.78 0.9 |