Sam Lawson is a vice president at a large communications firm. His compensation

Question

Sam Lawson is a vice president at a large communications firm. His compensation includes a salary of $400,000, a bonus of $200,000, and a stock option package that allows him to purchase 30,000 shares of the company's stock at $45 per share. He can exercise the option anytime within a three-year period that starts on the first of next month. The stock is now selling at $62.50 per share. If the current price holds until the first of the month, and Sam exercises his option, how much will he make this year?

Explanation / Answer

Sam Lawsons earnings=

salary =$ 400,000+ bonus $ 200,000 + prift in the stock option 525,000(30000*62.50- 30000*45)= $ 1125,000

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