Question: Perkins, Inc. established a stock appreciation rights (SARs) program on January 1, 2011, which entitles executives to receive cash at the date of exercise for

Perkins, Inc. established a stock appreciation rights (SARs) program on January 1, 2011, which entitles executives to receive cash at the date of exercise for the difference between the shares’ market price and the pre-established price of $20 on 5,400 SARs. The required service period is two years. The shares’ fair value is $22 per share on December 31, 2011, and $34 per share on December 31, 2012. The SARs are exercised on January 1, 2013. Calculate Perkins’ compensation expense for 2011 and 2012 assuming it complies with ASPE.

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