Company Rebo has five directors who all participate in the following share-based remuneration plan with cash alternatives. The directors have the right to choose between 600 shares or the value of 500 shares paid in cash at vesting date. If the directors opt for the shares, they may not sell them for three years. The only vesting requirement is that the directors should remain three years with the company.
At the grant date, the entity's share price is €30. At the end of years 1, 2 and 3 the share prices are €33, €36 and €40. The fair value of the share alternative is €28 per share. Calculate the remuneration expense for the equity-based remuneration system of Rebo. Also, indicate which accounts are credited. Further to this, consider both situations, namely that the directors choose the cash alternative and that the directors choose the equity alternative.