Unrecognized compensation costs

  
Note 18 - Share-based Compensation  
    The Company's equity incentive plans include grants of share options, restricted shares/units, performance shares, performance rights, and share rights.   
    In fiscal years 2022, 2021, and 2020, share options and performance rights or performance shares (awarded to U.S. participants in place of performance rights) were granted to officers and employees. The exercise price for share options was set at the time of grant. The requisite service period for outstanding share options, performance rights, or performance shares ranges from two to three years. The awards are also subject to performance and market conditions. At vesting, share options can be exercised and converted to ordinary shares on a one-for-one basis, subject to payment of the exercise price. The contractual term of the share options ranges from five to six years from the grant date. At vesting, performance rights can be exercised and converted to ordinary shares on a one-for-one basis. Performance shares vest automatically and convert to ordinary shares on a one-for-one basis.  
    Restricted shares/units may be granted to directors, officers, and employees of the Company and vest on terms as described in the award. The restrictions prevent the participant from disposing of the restricted shares/units during the vesting period. The fair value of restricted shares/units is determined based on the closing price of the Company's shares on the grant date.   
    Share rights may be granted to directors, officers, and employees of the Company and vest on terms as described in the award. The restrictions prevent the participant from disposing of the share rights during the vesting period. The fair value of share rights is determined based on the closing price of the Company's shares on the grant date, adjusted for dividend yield.  
    As of June 30, 2022, 47 million shares were reserved for future grants. The Company uses treasury shares to settle share-based compensation obligations. Treasury shares are acquired through market purchases throughout the fiscal year for the required number of shares.  
    Share-based compensation expense was primarily recorded in selling, general, and administrative expenses in the consolidated statements of income. The total share-based compensation expense was as follows:    

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|  |  | For the years ended June 30,  |
| ($ in millions) |  | 2022 |  | 2021 |  | 2020 |
| Share-based compensation expense |  | $ | 63  |  |  | $ | 58  |  |  | $ | 34  |  |

  
    As of June 30, 2022, there was $87 million of total unrecognized compensation cost related to all unvested share options and other equity incentive plans. That cost is expected to be recognized over a weighted-average period of 1.8 years.  
    The weighted-average grant date fair values by type of equity incentive plan for awards granted in fiscal years 2022, 2021 and 2020 were as follows:

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|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | For the years ended June 30,  |
| (in $ per unit of award) |  | 2022 |  | 2021 |  | 2020 |
| Share options (1) |  | 1.29  |  |  | 1.08  |  |  | 0.74  |  |
| Restricted shares/units |  | 11.62  |  |  | 11.06  |  |  | 10.15  |  |
| Performance rights/shares (2) |  | 9.40  |  |  | 7.22  |  |  | 6.70  |  |
| Share rights |  | 11.44  |  |  | 10.22  |  |  | 8.80  |  |

(1)The fair value of share options was determined using Black-Scholes option pricing model with the following key assumptions for the fiscal years ended June 30, 2022, 2021 and 2020, respectively: risk-free interest rate of 1.0% (2021: 0.2%, 2020: 1.8%), expected share-price volatility of 22.0% (2021: 25.0%, 2020: 18.0%), expected dividend yield of 4.1% (2021: 4.7%, 2020: 4.6%), and expected life of options of 6.1 years (2021: 6.1 years, 2020: 5.7 years). (2)The fair value of performance rights/shares was determined using a combination of Black-Scholes option pricing model and Monte Carlo simulation. The key assumptions for the fiscal years ended June 30, 2022, 2021 and 2020, respectively, were: risk-free interest rate of 0.4% (2021: 0.2%, 2020: 1.8%), expected share-price volatility of 22.0% (2021: 25.0%, 2020: 18.0%), and expected dividend yield of 4.1% (2021: 4.7%, 2020: 4.6%).  
  
  
  
  
93
