On January 1, 20X5, Ritz Corp., a publicly traded company, established a stock appreciation rights (SARs) compensation plan for its executive management. The SARs are settled through cash. Details of the plan are as follows:

• In total, 7,000 SARs were issued on January 1, 20X5.
• The SARs have a vesting period of two years and will expire on December 31, 20X8.
• 100% of the options have vested.
• The benchmark price of the SARs is $67.00.
• On March 1, 20X7, 1,000 SARs were exercised. The market price of the shares on this date was $72.00.

Date Fair value of SARs Market value of shares Dec. 31, 20X5 $25.00 $70.00

Dec. 31, 20X6 $21.00 $65.00

Dec. 31, 20X7 $28.00 $72.00

Dec. 31, 20X8 $30.00 $74.00

What amount should Ritz record as compensation expense for the December 31, 20X7, year?