A right, usually granted to an employee, to receive a bonus equal to the appreciation in the company's stock over a specified period. Like employee stock options, SARs benefit the holder with an increase in stock price; the difference is that the employee is not required to pay the exercise price , but rather just receives the amount of the increase in cash or stock.
Taobiz explains Stock Appreciation Right - SAR
For example, say an employee is given 100 SARs. Good fortune shines and the stock increases $50 per share over three years. As a result, the employee gets $5,000 . The main benefit with SARs is that the employee does not have to purchase anything to receive the proceeds.
