http://equity-compensation.com Professional guidance on equity compensation and stock option awards Mon, 19 Jul 2010 18:45:31 +0000 hourly 1 http://wordpress.org/?v=3.3 http://equity-compensation.com/stock-options/understanding-stock-appreciation-rights/comment-page-1/#comment-25 Martin Rosenbaum Mon, 19 Jul 2010 18:45:31 +0000 http://equity-compensation.com/?p=82#comment-25 I understand that most companies granting SARS provide that they are payable only in stock. That is because the accounting treatment is unfavorable for SARs that must be paid out in cash. In the latter case, the company must use liability accounting, meaning that the awards have to be "marked to market" every quarter. This can result in large amounts of compensation expense in a quarter where the stock price increases significantly. I understand that most companies granting SARS provide that they are payable only in stock. That is because the accounting treatment is unfavorable for SARs that must be paid out in cash. In the latter case, the company must use liability accounting, meaning that the awards have to be “marked to market” every quarter. This can result in large amounts of compensation expense in a quarter where the stock price increases significantly.

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