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Stock appreciation right (SAR)

Also called: SAR, stock appreciation rights

In one line

A right to receive the increase in a share's value over time, paid in cash or shares, without buying the share.

In plain English

A SAR pays you the growth in value from grant to settlement, minus nothing to buy in. You get the upside of a share without putting up the strike price.

If you were explaining it to a 5-year-old

Instead of buying the toy, you're promised the difference in its price between now and later. If it goes up 9 coins, you get 9 coins.

Why it matters when you sell

SARs settle to cash or shares at an event, so how and when they pay out affects your liquidity and tax, much like options.

Related terms

Phantom stockStock optionSpread (equity)Ordinary income (equity)

Put it to use

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Sources

A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.

Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.