Question: NZ King Salmon has equity based incentives for its CEO. The incentive for each year is based on the current years EBITDA and the CEO

NZ King Salmon has equity based incentives for its CEO. The incentive for each year is based on the current years EBITDA and the CEO can be awarded shares that are worth up to 30% of their base salary. The shares vest three years after the year they are earned. The financial threshold is set at achieving 100% of the prior year EBITDA, with a maximum target set at 130%. Achievement of the maximum financial target results in a payment of 100% of the incentive.

CEO base salary $501,925

2019 Annual report EBITDA $23,063

2018 Annul report EBITDA $28,482

Record any journal entries required for the above information for the 2019 financial year. You must justify and explain your answer and include workings.

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