15 Share-based payments

As of 31 December 2015 and 2016, the Group had the share-based compensation plans as described below.

Total compensation cost for share-based compensation plans recognised in net income was USD 61 million and USD 66 million in 2015 and 2016, respectively. The related tax benefit was USD 13 million and USD 14 million, respectively.

Stock option plans

No options were granted under stock option plans from 2007 onwards. Options issued vest at the end of the fourth year and have a maximum life of ten years.

A summary of the activity of the Group’s stock option plans for the year ended 31 December 2016 is as follows:



Weighted average exercise price in CHF

Number of options

Outstanding as of 1 January


100 000

Options sold


–100 000

Outstanding as of 31 December



Exercisable as of 31 December



The total intrinsic value of the options sold was CHF 1 million. The fair value of the option grant was estimated on the date of grant using a binomial option-pricing model. The underlying strike price for the outstanding options has been adjusted for the special dividend payout in 2013, 2014 and 2015.

Restricted shares

The Group granted 7 776 and 47 795 restricted shares to selected employees in 2015 and 2016, respectively. Moreover, as an alternative to the Group’s cash bonus programme, 288 125 and 300 382 shares were delivered during 2015 and 2016, respectively, which are not subject to forfeiture risk.

A summary of the movements in shares relating to outstanding awards granted under the restricted share plans for the year ended 31 December 2016 is as follows:



Weighted average grant date fair value in CHF1

Number of shares


Equal to the market price of the shares on the date of grant.

Non-vested at 1 January


531 018



348 177

Delivery of restricted shares


–339 103



–11 420

Outstanding as of 31 December


528 672

Leadership Performance Plan

The Leadership Performance Plan (LPP) awards are expected to be settled in shares, and the requisite service as well as the maximum contractual term are three years. For LPP 2014, LPP 2015 and LPP 2016 awards, an additional two-year holding period applies for all members of the Group EC and other key executives. At grant date the award is split equally into two underlying components — Restricted Share Units (RSUs) and Performance Share Units (PSUs). The RSUs are measured against a ROE performance condition and will vest within a range of 0–100%. The PSUs are based on relative total shareholder return, measured against a pre-defined group of peers and will vest within a range of 0–200%. The fair values of both components are measured separately, based on stochastic models.

The fair value assumptions included in the grant valuation are based on market estimates for dividends (and an additional special dividend of CHF 4.00 for the LPP 2013, a special dividend of CHF 4.15 for the LPP 2014, and a special dividend of CHF 3.00 for the LPP 2015 respectively) and the risk free rate based on the average of the 5-year US government bond rate (for LPP 2013, LPP 2014 and LPP 2015) and the average of the 10-year US government bond rate (for LPP 2016) taken monthly over each year in the performance period. This resulted in risk free rates between 1.0% and 3.1% for all LPP plans.

For the year ended 31 December 2016, the outstanding units were as follows:



LPP 2013


LPP 2014


LPP 2015


LPP 2016

Non-vested at 1 January

329 860


354 090


324 690










364 472




–4 130


–3 885


–3 685


–329 860







Outstanding as of 31 December



349 960


320 805


360 787

Grant date fair value in CHF
























Non-vested at 1 January

383 880


357 840


358 080










494 518




–4 170


–4 295


–4 999


–383 880







Outstanding as of 31 December



353 670


353 785


489 519

Grant date fair value in CHF








Unrecognised compensation costs

As of 31 December 2016, the total unrecognised compensation cost (net of forfeitures) related to non-vested, share-based compensation awards was USD 57 million and the weighted average period over which that cost is expected to be recognised is 1.9 years.

The number of shares authorised for the Group’s share-based payments to employees was 3 554 592 and 3 665 794 as of 31 December 2015 and 2016, respectively. The Group’s policy is to ensure that sufficient treasury shares are available at all times to settle share-based compensation plans.

Global Share Participation Plan

In June 2013, Swiss Re introduced the Global Share Participation Plan, which is a share purchase plan that was rolled out for the benefit of employees of companies within the Group. Swiss Re makes a financial contribution to participants in the Plan, by matching the commitment that they make during the plan cycle with additional Swiss Re shares.

If the employee is still employed by Swiss Re at the end of a plan cycle, the employee will receive an additional number of shares equal to 30% of the total number of purchased and dividend shares held at that time. In 2015 and 2016, Swiss Re contributed USD 10 million and USD 12 million to the plans and authorised 211 472 and 178 233 shares as of 31 December 2015 and 2016, respectively.