Phantom Stock Plans
Employers look for ways to motivate and reward their key executives for meeting performance standards other than company stock or financial performance.
Offering a Performance-based Phantom Stock Plan helps compensate key executives of a publically traded company by granting “hypothetical” stock. This arrangement gives the key executive the benefits of owning company stock without actually giving stock.
The value of the phantom stock increases or decreases overt time as if it were real. Typically, phantom stock is paid in cash and vests to the executive over a certain number of years.
- Motivate, reward and retain key executives
- Align executives’ interests with those of the employer
- Provide supplemental retirement income for key executives without diluting ownership of the company