What is Stock Appreciation Rights (SARs)?
Nexa Consultancy | Startup & Finance Glossary
SARs are a form of bonus compensation where the employee receives a cash payment equal to the appreciation of the company's stock price over a specified period. It's a way to provide equity-like upside without issuing shares.
Startup Example: An employee is granted 100 SARs when the stock price is ₹50. When they exercise the SARs, the price is ₹250. They receive a cash bonus of (₹250 - ₹50) * 100 = ₹20,000.
This is another tool we explore in our compensation advisory.