Accounting policy
Share-based compensation at dsm-firmenich consists of the award of Performance Share Units (PSUs), Restricted Share Units (RSUs), or stock options to eligible employees.
PSUs and RSUs generally vest after three years on the achievement of predefined vesting conditions. The cost of PSUs and RSUs is measured by reference to the fair value of the dsm-firmenich shares on the date on which the PSUs and RSUs were granted or modified. The cost of equity-settled share-based compensation is recognized in profit or loss (Employee benefit costs) during the vesting period, together with a corresponding increase in equity. Vesting conditions other than market conditions are considered by adjusting the number of equity instruments, so that the amount recognized during the vesting period in employee benefit costs is based on the number of share units that eventually vest.
Estimates and judgments
Key parameters related to share-based compensation costs for PSUs and RSUs are the estimation of fair values of the share units on the grant or modification date, and the number of share units that will vest. An independent third party conducts the fair value calculation as far as vesting is tied to market conditions, using the Monte Carlo method.
Restricted and Performance Share Unit plan
The dsm-firmenich Restricted and Performance Share Unit plan provides rules for the grant of RSUs and/or PSUs to eligible employees.
Considering the plan rules that allow multiple grant dates, best practice is to effectuate the grant of share units on the last trading day at the Amsterdam Stock Exchange in March. In principle, PSUs will be granted; RSUs may be granted in specific circumstances.
Subject to the plan, the 2025 grant was conducted on March 31, 2025. This grant concerned the Members of the Executive Committee and the eligible members of the Global Management Team (i.e., the group of (senior) leaders considering their job level). The performance period of this grant ends on December 31, 2027; vesting will be effectuated on March 31, 2028.
The number of share units to be granted is based on job level, contribution, and the face value of the dsm-firmenich share over a reference period. As a result, the number of share units to be granted annually will fluctuate with the share price development.
RSUs and PSUs are subject to a vesting period of three years starting at the grant date. Vesting of RSUs is subject to continued employment until the vesting date (‘time vesting’).
In addition, vesting of PSUs is also subject to the achievement of predefined performance targets at the end of the performance period. In view of the merger of equals between DSM and Firmenich in 2023, it was decided (as included in the Offering Circular) that the PSUs granted under DSM’s Long-Term Incentive plan in 2021 and 2022, respectively, shall vest against the average of the vesting result achieved over the vesting that occurred in 2020, 2021 and 2022. Non-vested share units will be forfeited. If employment is terminated prior to the vesting date, specific rules regarding vesting and forfeitures apply.
In line with the Articles of Association and the respective plan rules, fifty percent of the Base Fee due to the Members of the Board of Directors has been delivered in RSUs. The 2025 grant was implemented on May 7, 2025 and concerns the period between the 2025 AGM and the 2026 AGM.
In principle, the vesting term is three years. However, if a board mandate ceases for whatever reason within such vesting period, outstanding unvested RSUs will vest (in full or pro-rated) as per the effective date of such cessation, subject to a one-year holding period.
The 2025 grant of PSUs under the dsm-firmenich Restricted- and Performance Share Unit plan to Members of the Executive Committee and other eligible employees is based on the at target level; in 2025 this concerned 491,653 (2024: 463,542) share units.
The grant to the Members of the Board of Directors concerns 50% of the applicable Base Fee and involved 16,116 (2024: 13,714) RSUs in 2025.
RSUs and PSUs are subject to a vesting period of three years starting at the grant date. Vesting of RSUs is subject to continued employment until the vesting date (‘time vesting’). In addition, vesting of PSUs is also subject to the achievement of predefined performance targets at the end of the performance period.
The performance targets regarding the 2025 grant involve:
-
Total Shareholder Return
-
Core adjusted return on capital employed
-
Absolute greenhouse gas reduction
-
Inclusion & Belonging (gender and nationality diversity/inclusion)
In September 2022, a group of senior key employees (excluding the Co-CEOs) at legacy DSM received an RSU grant subject to completion of the merger between DSM and Firmenich. As the merger was completed, the RSUs were finally awarded. Upon vesting on September 30, 2025, the respective RSUs were settled in cash. The fair value on that date was €72.52 (December 31, 2024: €97.72).
|
|
Outstanding |
|
In 2025 |
|
Outstanding |
|
Share price at |
|
Expiry date |
||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year of grant |
|
|
Granted |
|
Vested |
|
Forfeited/ |
|
|
|
||||
2023 |
|
17,041 |
|
– |
|
– |
|
– |
|
17,041 |
|
80.21 |
|
Sep 30, 2026 |
2024 |
|
13,714 |
|
– |
|
– |
|
– |
|
13,714 |
|
106.05 |
|
May 8, 2027 |
2025 |
|
– |
|
16,116 |
|
– |
|
– |
|
16,116 |
|
94.40 |
|
May 7, 2028 |
2025 Total |
|
30,755 |
|
16,116 |
|
– |
|
– |
|
46,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at Dec. 31, 2023 |
|
|
|
|
|
|
|
at Dec. 31, 2024 |
|
|
|
|
2024 Total |
|
18,239 |
|
13,714 |
|
(1,198) |
|
– |
|
30,755 |
|
|
|
|
|
|
Outstanding |
|
In 2025 |
|
Outstanding |
|
Share price at |
|
Expiry date |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year of grant |
|
|
Granted |
|
Vested1 |
|
Forfeited/ |
|
|
|
||||||||
2021 |
|
– |
|
– |
|
– |
|
– |
|
– |
|
144.30 |
|
Mar 31, 2024 |
||||
2022 |
|
92,999 |
|
– |
|
(85,918) |
|
(7,081) |
|
– |
|
162.50 |
|
Mar 31, 2025 |
||||
2023 |
|
356,099 |
|
– |
|
(17,985) |
|
(16,878) |
|
321,236 |
|
97.67 |
|
Mar 31, 2026 |
||||
2024 |
|
449,248 |
|
34 |
|
(11,543) |
|
(31,017) |
|
406,722 |
|
106.32 |
|
Mar 31, 2027 |
||||
2025 |
|
– |
|
491,653 |
|
(30) |
|
(14,880) |
|
476,743 |
|
91.46 |
|
Mar 31, 2028 |
||||
2025 Total |
|
898,346 |
|
491,687 |
|
(115,476) |
|
(69,856) |
|
1,204,701 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
at Dec. 31, 2023 |
|
|
|
|
|
|
|
at Dec. 31, 2024 |
|
|
|
|
||||
2024 Total |
|
628,467 |
|
463,976 |
|
(153,939) |
|
(40,158) |
|
898,346 |
|
|
|
|
||||
|
||||||||||||||||||
|
|
Outstanding |
|
In 2025 |
|
Outstanding |
|
Share price at |
|
Expiry date |
||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year of grant |
|
|
Granted |
|
Vested |
|
Forfeited/ |
|
|
|
||||
2022 |
|
76,406 |
|
– |
|
(70,914) |
|
(5,492) |
|
– |
|
117.45 |
|
Sep 30, 2025 |
Employee stock options
Certain employees in the Netherlands are entitled to employee stock options, to be granted on the first day on which the dsm-firmenich stock is quoted ex-dividend following the Annual General Meeting of Shareholders. The opening price of the dsm-firmenich stock on that day is the strike price of such stock options. Employee stock options can immediately be exercised and have a term of five years.
Measurement of fair value
The following assumptions were used to determine the fair value of the equity-settled share units and employee stock options at grant date.
|
|
|
|
In 2025 |
|
|
|
|
|
|
|
|
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Year of grant |
|
Outstanding at 31 Dec. 2023 |
|
Granted |
|
Exercised |
|
Average price (€) |
|
Forfeited/ |
|
Outstanding at Dec. 31, 2025 |
|
Fair value on grant date (€) |
|
Strike price (€) |
|
Exercise period until |
2020 |
|
36,485 |
|
– |
|
|
|
|
|
(36,485) |
|
– |
|
10.26 |
|
112.00 |
|
May 2025 |
2022 |
|
226,620 |
|
– |
|
– |
|
– |
|
(12,430) |
|
214,190 |
|
13.58 |
|
137.85 |
|
May 2027 |
2025 |
|
|
|
289,465 |
|
(2,600) |
|
97.89 |
|
(12,020) |
|
274,845 |
|
10.29 |
|
92.94 |
|
May 2030 |
2025 Total |
|
263,105 |
|
289,465 |
|
(2,600) |
|
97.89 |
|
(60,935) |
|
489,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at Dec. 31, 2023 |
|
|
|
|
|
|
|
|
|
at Dec. 31, 2024 |
|
|
|
|
|
|
2024 Total |
|
340,820 |
|
– |
|
(56,240) |
|
105.31 |
|
(21,475) |
|
263,105 |
|
|
|
|
|
|
|
|
2025 |
|
2024 |
||||||
|---|---|---|---|---|---|---|---|---|---|---|
Share units granted to Board of Directors |
|
|
|
|
||||||
Risk-free rate1 |
|
1.82% |
|
3.34% |
||||||
Expected share life in years2 |
|
1 |
|
1 |
||||||
Nominal share life in years |
|
1 |
|
1 |
||||||
Share price in €1 |
|
94.40 |
|
107.35 |
||||||
Expected dividend in € |
|
2.50 |
|
2.50 |
||||||
Fair value of share granted in € |
|
87.16 |
|
100.26 |
||||||
|
|
|
|
|
||||||
Share units granted to ExCo and other eligible employees |
|
|
|
|
||||||
Risk-free rate1 |
|
2.13% |
|
2.53% |
||||||
Expected share life in years |
|
3 |
|
3 |
||||||
Nominal share life in years |
|
3 |
|
3 |
||||||
Share price in €1 |
|
91.36 |
|
105.40 |
||||||
Expected dividend in € |
|
2.50 |
|
2.50 |
||||||
Expected volatility |
|
25.5% |
|
25.7% |
||||||
Fair value of share granted in € |
|
84.16 |
|
98.30 |
||||||
|
|
|
|
|
||||||
Employee stock options |
|
|
|
|
||||||
Risk-free rate |
|
1.78% |
|
– |
||||||
Expected option life in years |
|
2 |
|
– |
||||||
Nominal option life in years |
|
5 |
|
– |
||||||
Share price/exercise price in € |
|
92.94 |
|
– |
||||||
Expected dividend in € |
|
2.50 |
|
– |
||||||
Expected volatility |
|
20.0% |
|
– |
||||||
Fair value of option granted in € |
|
10.29 |
|
– |
||||||
|
||||||||||
Share-based compensation
An amount of €35 million is included in the costs for wages and salaries for share-based compensation (2024: €31 million).
|
|
2025 |
|
2024 |
|---|---|---|---|---|
Equity-settled stock options |
|
3 |
|
– |
Equity-settled share units |
|
32 |
|
28 |
Cash-settled share units |
|
– |
|
3 |
Total expense |
|
35 |
|
31 |