How SARs work
Follow the journey of a typical award.
Accept your award
(if you're required to).
Wait for your award to vest.
Exercise your rights before they expire and pay taxes.
The payout is now yours.
Receiving stock appreciation rights (SARs) from your company is a big deal—congratulations! SARs are a form of equity compensation that give you the ability to receive shares or cash equal in value to the appreciation of company shares over a set period of time. In other words, if the share price goes up between the grant date and the vesting date, you can exercise the rights for a payout of shares or cash.
Accepting your award and opening your account
To accept your award, go to Fidelity NetBenefits, If you're registering for the first time, you'll be asked to create a username and password and certify your account if you need to.
Tracking your award value
The value of your award is based on any increase in the price of your company's shares over a set period. Go to NetBenefits to see how much your award could be worth.
Receiving your payout
After a waiting period that your company sets, your award vests and you can exercise the rights for shares or cash. Go to NetBenefits to find out when that happens.
Exercising stock appreciation rights
When the market price of the shares is higher than your grant price, your stock appreciation rights are "in the money." (If the market price is lower than the grant price, the rights are "underwater" or "out of the money" and you are unable to exercise them.) Once vested, you can exercise the rights to benefit from any share price increase. Remember that your stock appreciation rights will expire, so be sure to exercise them in time.
Managing your payout
When you exercise your stock appreciation rights, the shares or cash will pay out to your account. You'll also need this account to exercise your stock appreciation rights. To sell your shares easily and link your bank account to access cash, go to NetBenefits.
Understanding your taxes
Your award is considered taxable when you exercise the rights, and your company may withhold a portion of the payout to cover taxes due. If your award pays out as shares, you may have additional taxes when you sell your shares, depending on your country's tax laws. Use Fidelity's tax-planning resources to learn more about taxes.
These videos describe stock options, which are very similar to stock appreciation rights.
Make the most of your account
When you exercise your stock appreciation rights, the shares or cash will pay out to your account.
With this account, you can manage your stock plans, transfer cash to your bank account, and sell your shares.
Your Stock Plan Resource Center
The Stock Plan Resource Center provides the help and education you need to understand how your equity compensation works, including taxes, and selling and managing shares.