Although these may take the form of SERPs which are time based, many companies have also adopted some form of performance based LTI, most commonly referred to as phantom stock plans
Beyond those exceptions, section 409A applies broadly to salary reduction plans, supplemental employee retirement plans (SERPs), parachute payments, phantom stock plans
, severance plans, insurance commissions, discounted stock options, certain SARs, non-excluded fringe benefits, etc.
The shift today within private firms has been in the direction of phantom stock plans
that are capital event--driven.
But offering multiple retirement plans -- and in some cases; phantom stock plans
-- shows they're rising to the challenge.
These plans are often described as full value phantom stock plans
The only specific forms of compensation for which the institutions expressed strong sentiments were incentive and non-qualified stock options and cash bonuses (in favor), and phantom stock plans
and stock appreciation rights plans (disfavor).
Corporate-owned life insurance can be one of the most cost-effective and tax-advantaged methods of funding nonqualified benefit plans including supplemental executive retirement plans (SERPs), 401(k) overlay plans, supplemental executive life insurance plans and phantom stock plans
Phantom stock plans
have the same accounting effects as SARs.
The value of compensation will reach to other areas of the business community, specifically privately owned, for-profit firms, and to a lesser extent, to Not-For-Profits (NFPs) These organizations have to compete within the same marketplace for qualified executives, and therefore they must provide a variety of programs that offer comparable levels of total compensation in order to successfully recruit those individuals, which include new creative variations of long-term incentives, Supplemental Executive Retirement Programs (SERPs), and Phantom Stock Plans
Wynn explains that these may include bonus agreements and arrangements, severance agreements or provisions in other documents, executive employment agreements, salary and bonus deferral arrangements, stock options, stock appreciation rights and phantom stock plans
For example, employers providing 401(k), employee stock purchase plans, qualified and non-qualified employee stock options, phantom stock plans
, or other equity-based compensation plans routinely provide an explanation of the tax consequences of various transactions to affected employees.
In addition to stock options, stock grants and phantom stock plans
, many employers offer company stock as an investment option under their deferred compensation plans.