Phantom stock plan. This plan entitles employees to receive cash or stock in an amount equal to the value of an equivalent number of shares of company stock, or the appreciation in value of an equivalent number of shares of stock since the date the units were awarded upon the occurrence of one or more predetermined events--e.g., a change in control of the company or the participant’s retirement at or after age 65.
Merging an organization into an ESOP structure and a
phantom stock plan can create new incentives and retirement avenues for the merging partners.
A
phantom stock plan is another form of DCA in which there is a deferred cash benefit but no actual stock ownership.
Phantom stock plans are a form of nonqualified deferred compensation made available to select employees.
We determined that a
phantom stock plan best addressed the client's need.
A
phantom stock plan is essentially a special type of deferred bonus arrangement, usually based on the fair market value of the shares of the employer corporation.
The difference between a
phantom stock plan and SARs is that the grantee of a phantom stock unit typically receives, as part of the grant, the full value of a share of stock, while the grantee of a SAP.
A
phantom stock plan requires payment of cash by the company to the employee with no issuance of stock.
• How a
phantom stock plan can increase engagement and build an ownership mindset
A bonus stock or
phantom stock plan ties the executive's benefits to the growth of the business.
Example 2: The facts are the same as in Example 1, except that R grants employees a
phantom stock plan (rather than a restricted stock plan).
However, a
phantom stock plan, which provides the employee with a payment equal to the value of stock at a given time, is treated as a deferral of compensation under the regulations.