Financial Statements

Notes to the Accounts

9 Staff costs

Staff costs (including directors)	2008 £m	2007 £m
Wages and salaries	36	38
Social security costs	4	4
Pension costs	4
Equity-settled share-based payments	10	21
	54	63

The average monthly number of employees of the Company during the year was 177 (2007: 199). The average monthly number of Group employees, including those employed directly at the Group's properties and their costs recharged to tenants, was 732 (2007: 804).

The Executive Directors are the key management personnel and their remuneration is disclosed in the Remuneration Report.

Staff costs

The Group's equity-settled share-based payments comprise the Long-Term Incentive Plan (LTIP), the Matching Share Plan (MSP), the Performance Plan (PP), the Share Incentive Plan (SIP), various Sharesave Plans and a recruitment scheme relating to the Chief Executive, the Co-Investment Share Plan (CISP).

The Company expenses an estimate of how many shares are likely to vest based on the market price at the date of grant, taking account of expected performance against the net asset value per share growth target and the three-year service period.

Long-Term Incentive Plan (LTIP)

Under the LTIP the Company may award employees a combination of performance shares and options. Both components have the same performance targets based on net asset value per share growth and a three-year service period. For both LTIP components the Company estimates the number of shares or options likely to vest and expenses that value over the relevant period. Performance shares are valued at the market value at the date of the award. The options are valued using a Black-Scholes model adjusted for dividends, see table below. Volatility has been estimated by taking the historical volatility in the Company's share price over a four-year period and adjusting where there are known factors that may affect future volatility.

Long-Term Incentive Plan: 2008 awards	27 June 2007	20 December 2007
Share price at grant date	1327p	883p
Exercise price	1327p	883p
Option life in years	7	7
Risk free rate	5.4%	4.6%
Expected volatility	21%	24%
Expected dividend yield	2%	3%
Value per option	367p	210p

Matching Share Plan (MSP)

The MSP allows eligible employees to receive one-third of their annual bonus in shares, held in trust, which following performance targets based on total shareholder return and earnings per share being achieved over a three-year period will be matched 2 for 1 by the Company. The Company expenses the estimated number of shares likely to vest over the three-year period based on the market price at the date of grant.

Performance Plan (PP)

Under the PP the Company may award employees a combination of cash (20% of the award) and shares based on a maximum of 30% of the annual performance fee earned by the Unit Trusts. The cash is awarded following the performance year under review with the shares awarded over the following three years subject to clawback of the performance fee and continued employment. The Company expenses an estimate of the fair value of the award over the performance and subsequent period to full vesting.

Other Share Plans

Under the SIP the Company gives eligible employees free shares of up to £3,000 a year. They can also purchase partnership shares for up to £1,500 a year that are matched 2 for 1 by the Company. The free and matching shares are purchased at fair value in the market and expensed at the time of allocation.

Under the Sharesave Plans eligible employees can save up to £250 a month over a three-or five-year period and use the savings to exercise an option granted at the outset at a 20% discount to the then prevailing share price. The fair value of the various options is expensed over the service period, based on a Black-Scholes model.

Awards under the CISP are valued at the fair value of the shares at the date of grant and expensed over three years.

Movements in shares and options are given in note 20.