Lloyd is the CFO for a firm that uses ISOs as part of its executive compensation plan.He receives $150,000 annually,paid semimonthly,in base salary plus 25 shares of the firm's stock per month.The stock is omitted from gross pay calculations and is valued at $52.50 per share and he may exercise his option within five years at $0.10 per share.What is Lloyd's gross pay for mid-October?
A)$7,250
B)$6,250
C)$7,560
D)$8,250

Question

Quizplus · Accepted Answer

Lloyd's gross pay for mid-October includes only his base salary, as the stock is omitted from gross pay calculations. His annual salary is $150,000, paid semimonthly, which means he receives $150,000 / 24 = $6,250 per pay period.

Lloyd Is the CFO for a Firm That Uses ISOs