On january 1, Year 1, Phoenix Corporation adopts a performance based share option plan for 25 executives, with the number of shares based on the yearly increase In sales. At the end if Year 1, based on a 10% increase in sales, it expects that each executive will be granted 150 options and that a fair value of an option expected to vest is $15.75. Phoenix expects a turnover rate of 15% over the 3 year service period. Determine the compensation expense for year 1 for this plan. Round your answer to the nearest whole dollar.