Stock Appreciation Right

A stock appreciation right entitles an employee to receive an amount equal to the excess of the market price of the stock at the exercise date over a predetermined amount (usually market price at grant date). This excess times the number of rights outstanding is the compensation cost of the corporation. Compensation cost for stock appreciation rights outstanding is adjusted annually to account for changes in the market price of the stock. Unlike stock options, stock appreciation rights do not require the employee to make a cash payment. See also stock option.