Stock appreciation right
Also called SAR, SARs.
A cash- or stock-settled award equal to the increase in share price over a base price. Filings often group SARs with option awards, and CompensationBase maps those headers to Option Awards.
What it is
A stock appreciation right (SAR) pays the increase in the stock price over a base price, in cash or shares, without the executive having to buy the share. Economically it is close to a cashless option. In the SCT, SAR grants are usually reported in Option Awards at grant-date fair value.
Share-settled SARs dilute less than a full option exercise because only the spread is issued. Cash-settled SARs are a liability and do not issue shares, but they use corporate cash.
Why companies use it
Companies use SARs when they want option-like leverage without requiring employees to fund an exercise, or when share availability in the plan is tight.
Cash-settled SARs appear in some non-U.S. or hybrid programs where delivering shares is harder.
Pros
- Option-like upside with simpler settlement.
- Share-settled SARs can reduce dilution vs full-share option exercise.
- Fits the Option Awards SCT column, so readers still see a grant-date value.
Cons
- Cash-settled SARs create mark-to-market expense and cash outflow.
- Easy to confuse with RSUs; they are appreciation-only.
- CompensationBase does not separate SARs from options in the displayed column.
Examples
Share-settled SAR
Base price $100, stock $130 at exercise, 10,000 SARs. The company issues shares worth $300,000 (the spread), not 10,000 full shares.
SCT mapping
A proxy line “SARs” under option awards is stored as Option Awards on CompensationBase, alongside statutory options.
On CompensationBase
SAR headers in the SCT are mapped to Option Awards, alongside stock options.
Related terms
- Option awards
The grant-date fair value of stock options and stock appreciation rights reported in the SCT Option Awards column.
- Stock option
The right to buy company stock at a set strike price. The SCT reports the option’s grant-date fair value; realized gain depends on later exercise and the stock price.
- Grant-date fair value
The accounting value of equity awards on the day they are granted, which is what the Summary Compensation Table reports for stock and option awards—not the value later realized when shares vest or are sold.