A stock appreciation right (SAR) entitles the holder of the right to a cash payment equal to the difference between the fair market value of the stock on the date the SAR is exercised and the fair market value of a share on the date the SAR is granted. In 2019, L&M Corporation grants 1,000 SARs to Jasmine, an employee of SAR. On the date of the grant, the L&M stock sells for $30 per share. On December 31, 2019, the stock sells for $40; it sells for $50 on December 31, 2020, and for $55 on December 31, 2021. Jasmine exercises the SARs on December 31, 2021. When does she recognize income from the SARs, and what is the character of the income recognized?