When we talk about employee reward structures, we often think of stock options or equity grants. But there's an increasingly popular alternative, especially among fast-growing companies: Stock Appreciation Rights (SARs).
SARs offer employees the chance to benefit from a company’s growth without actually owning shares. This makes them easier to manage, attractive for companies looking to maintain control, and valuable for employees who want to share in the success.
What are Stock Appreciation Rights?
A Stock Appreciation Right gives an employee the right to receive the increase in value of a certain number of hypothetical shares over a set period. Unlike stock options, employees don’t need to invest or purchase anything upfront. When the SAR is exercised, they receive the difference between the original value and the current value, typically paid in cash, and sometimes in shares.
Key advantages:
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No equity dilution
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Less complex to administer
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Flexible taxation (depending on jurisdiction)
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Ideal for international teams or privately held companies
Well-Known Companies Using SARs
1. Uber
In its early growth phase, Uber used SARs instead of traditional stock options, especially for employees outside the United States. Since equity structures can be complex or heavily taxed in many countries, SARs provided a simpler, more inclusive alternative, giving international team members a way to benefit from Uber’s rising value.
2. Spotify
Before going public, Spotify used a mix of stock options and SARs for its global workforce. SARs were especially helpful in countries where equity ownership posed legal or tax challenges. This allowed Spotify to offer a consistent and scalable rewards model across international markets.
3. Airbnb
Airbnb implemented SARs in regions where traditional equity compensation was less feasible due to regulatory constraints. This allowed employees in parts of Europe and Asia to participate in Airbnb’s success without needing to navigate complex legal structures.
4. Google (Alphabet)
While Alphabet is best known for offering RSUs (Restricted Stock Units), the company has used SAR-like structures within certain departments or for employees in specific international markets. This tailored approach helps Google remain competitive in attracting global talent.
Why Companies Choose SARs
SARs are especially appealing for companies that are internationally active or not yet publicly traded. They provide:
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Growth-based rewards without transferring ownership
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Lower administrative and legal burden
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Flexibility in how and when rewards are delivered
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Strong employee engagement without share dilution
A Modern Approach to Employee Rewards
SARs are not a replacement for ownership, but they are a smart middle ground. They allow companies to share value with employees, without the complexity or risk of equity transfer. For startups, scale-ups, and family businesses that want to stay in control while rewarding growth, SARs are a powerful tool.
Curious about how SARs could work in your company? Discover how Share Council helps businesses set up modern participation models — from SARs and STAKs to employee bonds — in a secure and accessible way.
