Question

The date on which to measure the compensation element in a stock option granted to a corporate employee ordinarily is the date on which the employee:________.

a. is granted the option.
b. has performed all conditions precedent to exercising the option.
c. may first exercise the option.
d. exercises the option.

Answer 1

a. is granted the option.

Step-by-step explanation:

Based on the information provided within the question it can be said that this usually occurs when the corporate employee is granted the option. When the employee is given the stock option they immediately know the value of compensation that they are getting because it is in their possession and is no longer a future price prediction that is not always correct.