Stock Appreciation Right

From Wikipedia, the free encyclopedia

Stock Appreciation Right (SAR) is a kind of compensation to employee with ESO (Employee Stock Option).

Upon exercise of ESO (that is, exercise the option/right to buy some stock at a certain price), Stock Appreciation Right requires the company to pay cash for the difference between the grant price and the market price of the company stock on the exercise date.

For example, if the [stock] grant price is $10 per share and the market price is $15, the company will give the employee a bonus of $5 per share in order to compensate for option holder's not realizing $15 as cash because they can not sell the granted stock until a certain/agreed time.