SARs: Basics

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What You Need To Know About Stock Appreciation Rights (SARs): Part 1

Bruce Brumberg
Stock appreciation rights, referred to as SARs, will soon start showing up in equity grants at many companies. To help you understand SARs, Part 1 explains the "appreciation," the role of exercises, and taxes at exercise.

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What are stock appreciation rights?

SARs, or stock appreciation rights, are contractual rights that entitle you to receive the appreciation from a corresponding number of company shares after the grant date. Instead of exercising a stock option, you...

Does all the stock option content on this website also apply to stock appreciation rights (SARs)?

Much of the stock option content is relevant to SARs. All the key stock option features...

UPDATED! What do surveys and examples reveal about the effects of mandatory expensing and other developments on my stock grants?

A summary of data in surveys from over 10 major consulting and research firms shows that...

Why are many companies considering stock appreciation rights (SARs) as an alternative to stock options?

FAS 123(R) requires the expensing of stock options. This makes accounting for stock options and stock-settled SARs similar, leading some companies...

Are stock appreciation rights (SARs) a better deal for me than stock options?

The personal economic benefits of SARs are...

How do stock appreciation rights (SARs) differ from stock options, restricted stock, and RSUs?

Stock appreciation rights entitle you to stock (or sometimes cash) that equals the amount...

How do I exercise stock appreciation rights?

Unlike with stock options, you have no exercise cost to obtain the appreciation spread above...

How does a stock split affect my stock appreciation rights?

Most stock plans automatically adjust your SARs for the stock split. Your number of SARs will be adjusted...

What specific provisions should I know about my SARs grant?

As with stock options, you should know the following, all of which will be available in your...

Am I entitled to voting rights or any stock dividends paid to shareholders before I exercise?

No. Until you exercise a stock option, you do not have the rights of a...

Are there any special securities law issues and filing requirements with stock appreciation rights (SARs) for senior executives and directors?

For senior executives, stock-settled SARs avoid the concerns about cashless exercises by officers and directors raised by...

How does a court determine whether my soon-to-be-former spouse should receive any part of my stock grant?

First a court must decide (under the relevant state's laws) whether the property subject to division includes...

What is a "phantom stock plan"?

Phantom stock is similar to stock appreciation rights in that you receive...

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