Performance & incentive compensation.

a. PQR, Inc. has adopted performance based compensation for the President and for the Executive Vice President for Operations.The president receives 3% of the after-tax, after-bonus profit, and the EVPO receives 2%. The bonuses for 2017 were appropriately accrued at year end 2017, and were paid January 15, 2018 (accruals were reversed.)

b. The company adopted a stock based incentive compensation plan, effective January 01, 2018. Under the plan, the President/CEO was granted 30,000 share options on PQR, Inc.'s common stock. The EVP Operations and the CFO each received 20,000 share options. The options strike price is $50 per share. The company uses the US Treasury yield on the 10-year Treasury Bill as an approximation of the risk free rate. Historically, the standard deviation of the returns on the company's stock has been about $5.92. These options vest ratably per year over a three year period.

Answer rating: 100% (QA)

ANS WER Performance based compensation P Q R Inc s president and executive vice president for op... View the full answer