The fair value of shares granted up to and including second
quarter 2005 rose to CHF 1,235 million from CHF 1,193 million
in first quarter. It was also higher than the grant total of
CHF 1,113 million for full-year 2004. The increase compared
to 2004 is primarily driven by an increased proportion of
bonuses being delivered in restricted shares.
The fair value of options granted in the first half of 2005
was CHF 336 million, down from CHF 468 million a year
earlier. The decrease reflects a lower fair value per option,
primarily due to a change in the valuation model, and a 2%
drop in the number of options granted.
Most share-based compensation is granted in the first
quarter of the year, with any further grants mainly reflecting
those made under the Equity Plus program, an ongoing employee
participation program under which voluntary investments
in UBS shares each quarter are matched with option
awards.
These amounts, net of estimated forfeited awards, will be
recognized as compensation expense over the service period,
which is generally equal to the vesting period. Most UBS
share and option awards vest incrementally over a three-year
period.
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