17 Share-based payments

As of 31 December 2018 and 2019, the Group had the share-based compensation plans as described below.

The total compensation cost for share-based compensation plans recognised in net income was USD 47 million and USD 30 million in 2018 and 2019, respectively. The related tax benefit was USD 10 million and USD 6 million, respectively.

Restricted shares

The Group granted 24 627 and 51 036 restricted shares to selected employees in 2018 and 2019, respectively. Moreover, as an alternative to the Group’s cash bonus plan, 154 743 shares were delivered during 2018 and for 2019 this alternative has been discontinued. In addition, 39 793 and 37 593 shares were delivered to members of the Board of Directors during 2018 and 2019, respectively, which are generally 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 2019 is as follows:

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 2016, LPP 2017, LPP 2018 and LPP 2019 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 return on equity 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 in the grant valuations include market estimates for dividends and the risk-free rate based on the average of the 10-year US Treasury bond taken monthly over each year in the performance period. This resulted in risk-free rates between 1.8% and 3.1% for all LPP awards.

For the year ended 31 December 2019, the outstanding units were as follows:

Unrecognised compensation cost

As of 31 December 2019, the total unrecognised compensation cost (net of forfeitures) related to non-vested, share-based compensation awards was USD 46 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 4 172 886 and 3 660 142 as of 31 December 2018 and 2019, respectively. The Group’s policy is to ensure that sufficient treasury shares are available at all times to settle future 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 2018 and 2019, Swiss Re contributed USD 11 million and USD 12 million to the plans and authorised 197 194 and 169 772 shares as of 31 December 2018 and 2019, respectively.