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While a higher salary and company car has obvious uses, obscure rewards like phantom stock plans can be … Continue reading → The post What Is a Phantom Stock Plan for Employees? appeared first ...
In essence, phantom stock is a deferred compensation plan that gives an employee a stake in a company’s success without conferring an actual ownership interest in the company.
Phantom stock is a contractual agreement between a corporation and recipients of phantom shares that bestow upon the grantee the right to a cash payment at a designated time or in association with a designated event in the future, which payment is to be in an amount tied to the market value of an equivalent number of shares of the corporation's stock. [1]
Phantom stock provides a cash or stock bonus based on the value of a stated number of shares, to be paid out at the end of a specified period of time. SARs may not have a specific settlement date; like options, the employees may have flexibility in when to choose to exercise the SAR. Phantom stock may pay dividends; SARs would not.
Individual equity compensation may include: restricted stock and restricted stock units (rights to own the employer's stock, tracked as bookkeeping entries, [76] lacking voting rights and paid in stock or cash [77]), stock appreciation rights, phantom stock [78] —but the most common form of equity pay has been stock options and shares of ...
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Public companies often compensate employees in part by giving them stock options. This form of employee compensation conserves cash, improves retention and aligns employees' interests with the ...
When offered, golden handcuffs are extremely tempting as they usually are of great value compared to the employee's annual salary. The experience that follows an agreement of this sort may be draining and abhorrent, which is why the contract must be thoroughly analysed and thought about until an intelligent conclusion or compensation, that benefits both the company and the employee, is agreed ...
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