Performance-based share option plan for Phoenix Corporation SOLVED

Performance-based share option plan for Phoenix Corporation SOLVED

Performance-based share option plan for Phoenix Corporation

On January 1, Year 1, Phoenix Corporation adopts a performance-based share option plan for 25 executives, with the number of shares based on the yearly increase in sales. At the end of Year 1, based on a 10% increase in sales, it expects that each executive will be granted 150 options and that the fair value of an option expected to vest is $15.75. Phoenix expects a turnover rate of 15% over the 3-year service period.

Determine the compensation expense for Year 1 for this plan. Round your answer to the nearest whole dollar.
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