Strategic report Governance Financial statements Other information SECTION 1: RESULTS FOR THE YEAR NOTES TO THE GROUP FINANCIAL STATEMENTS INCOME STATEMENT CONTINUED 1.9 Earnings per share (EPS) 1.10 Share based payments Basic earnings per share is calculated by dividing the profit attributable to equity holders of the The Group issues equity settled share based payments to certain employees. Equity settled share Company by the weighted average number of ordinary shares in free issue during the year, including based payments are measured at fair value (excluding the effect of non-market based vesting ordinary shares held in the Hargreaves Lansdown Employee Benefit Trust (HL EBT) and Hargreaves conditions) at the date of grant. Share options are expensed on a straight line basis over the vesting Lansdown SIP Trust (SIP) reserve which have vested unconditionally with employees. period, based on management’s best estimate of awards vesting and adjusted for the impact of Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares non-market based vesting conditions. Annual revisions are made to the estimate of awards outstanding to assume conversion of all potentially dilutive ordinary shares. vesting, based on non-market based vesting conditions. The impact of the revision is recognised in the income statement such that the cumulative expense reflects the revised estimate, with a The weighted average number of anti-dilutive share options and awards excluded from the calculation corresponding adjustment to reserves. of diluted earnings per share was nil at 30 June 2021 (2020: nil). Fair value is measured by use of the Black-Scholes model. The expected life used in the model Year ended Year ended has been adjusted, based on management’s best estimate, for the effects of non-transferability, 30 June 2021 30 June 2020 exercise restrictions and behavioural considerations. £m £m Earnings Any gains or losses on the sale of the Company’s own shares held by the EBT are credited or Earnings for the purposes of basic and diluted EPS – net profit attributable debited directly to the EBT reserve. to equity holders of parent company 296.7 313.1 Number of shares Weighted average number of ordinary shares 474,318,625 474,318,625 Equity settled share option scheme Weighted average number of shares held by HL EBT and SIP (532,185) (527,322) The Group seeks to facilitate equity ownership by employees, principally through schemes that Weighted average number of shares held by HL EBT and SIP that have vested encourage and assist the purchase of the Company’s shares. unconditionally with employees 4,335 44,555 Weighted average number of ordinary shares for the purposes The Group operates three share option and share award plans: the Employee Savings Related Share of basic EPS 473,790,775 473,835,858 Option Scheme (SAYE), the Hargreaves Lansdown plc Share Incentive Plan (SIP) and the Hargreaves Weighted average number of dilutive share options held by HL EBT and SIP Lansdown Company Share Option Scheme (the Executive Option Scheme). that have not vested unconditionally with employees 754,901 989,475 Weighted average number of ordinary shares for the purposes Awards granted under the SAYE scheme vest over three or five years. Awards granted under the of diluted EPS 474,545,676 474,825,333 Employee Share Incentive Plan vest over a three year period. Awards granted under the Executive Option Scheme range between vesting at grant date and a maximum of 10 years. Options are Earnings per share Pence Pence exercisable at a price equal to the market value of the Company’s shares on the date of grant. There Basic EPS 62.6 66.1 are currently no performance conditions attached to any options granted under any of the schemes, Diluted EPS 62.5 65.9 with the exception of the Sustained Performance Plan (SPP) – a part of the Executive Option Scheme, Underlying basic EPS 62.6 57.9 although options are forfeited (in most circumstances) if the employee leaves the Group before the Underlying diluted EPS 62.5 57.8 options vest. Unless otherwise stated there have been no lapsed or forfeited options during the year. 149 Hargreaves Lansdown Report and Financial Statements 2021