Kogo Incorporation started a share appreciation plan on January 1, 2021, when it granted 100,000 rights to its executives. The vesting period is 2 years. The stock appreciation rights are settled for cash. The plan expires on January 1, 2023. The fair value of Kogo’s SARs for the years ended December 31, 2021 and 2022, are as follows:

All rights are exercised on January 1, 2023, when the fair value is $5. What is the compensation expense in 2021 and in 2022?

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Date December December 31, 2021 31, 2022 Fair Value $4 $3