SAR (Stock Appreciation Rights) Calculator

SARs (Stock Appreciation Rights) pay employees the appreciation in share price between grant and exercise, in cash. Like options without the strike price purchase. Granted at current price. Vest over time (typically 4 years). Exercise: receive (current price - grant price) × units in cash. Common alternative to options at private companies and some public.

1,000 SAR units at 20 grant price. Current price 35. Appreciation 15/unit × 1,000 × 100% vested = 15,000 cash value. Taxed as ordinary income at exercise. No share purchase needed (unlike options) - direct cash payout. Simpler than options for both employee and employer.

SAR vs RSU: RSU = receive shares (taxed at vest based on share value). SAR = receive cash equal to appreciation (taxed at exercise based on appreciation). RSU value rises with all share movement; SAR only rises with appreciation above grant. SAR riskier: if share price stays flat, value zero. RSU always has some value if shares non-zero. Most companies use RSUs; SARs more common at private companies pre-IPO.

Run it with sensible defaults

Using sar units of 1,000, grant price of 20, current share price of 35, vested of 100%, the calculation works out to 15,000.00. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — SAR Units, Grant Price, Current Share Price, and Vested % — do not pull with equal force. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.

How the math works

Appreciation per unit = current - grant (min 0). Value = appreciation × units × vested %.

Where this fits in planning

This is a "what-if" tool, not a forecast. Use it to test ideas before committing: what happens if the rate is 2% lower than hoped, what happens if you add five more years. The value is in the scenarios you run, not the single answer you get from the defaults.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. The number represents one scenario rather than a forecast.