
Stock appreciation rights (SARs) are a type of equity compensation linked to the performance of your company's stock performance over a specified period. If the stock value rises during this time, you receive a portion of the gain, either in cash or in shares. One key advantage of SARs is that they enable you to benefit from an increase in the share price without requiring you to purchase the stock.
Employees are awarded SARs at a specific price on a particular date
Vesting periods often range from 3-5 years, encouraging employee retention
Once vested, employees can exercise SARs for cash payout tied to stock price gain
Stock price appreciation can be paid in cash or shares, based on company policy