Phantom stock option plan example

The sponsoring company determines a phantom stock price through an internal or external valuation of the company. Employees are awarded some number of phantom options that carry specific terms and conditions.

Phantom Stock and Stock Appreciation Rights (SARs)

Should the company phantom stock appreciate over time, employees will receive a cash payment equaling the difference between the original price and the appreciated price.

At a pre-determined future date the company will calculate the value of the phantom stock price and pay the employee any positive difference.

Phantom stock plans do not result in shareholder dilution because actual shares are not being transferred. Employees do not become owners. Instead, they are potential cash beneficiaries in the appreciation of the underlying company value.

Phantom options result in ordinary income taxation to the employees when they turn into an actual cash payment. To learn why sharing value with those who drive growth is so critical to your pay strategy, download and read our report today!

Ready to Speak with a Phantom Stock Expert Now?

Call or complete our contact form. To receive more complimentary information about Phantom Stock from our expert advisors, please provide us with your contact information below. Thank you for submitting the form.

Employee stock ownership plan - Wikipedia

One of our expert advisors will be in touch with you soon. Phantom Stock Knowledge Center.

Stock Options, Restricted Stock, Phantom Stock, Stock Appreciation Rights (SARs), and Employee Stock Purchase Plans (ESPPs)

Overview Plan Basics Types of Plans Plan Decisions Implementing a Plan Administering a Plan Taxes Legal Considerations Special Circumstances Supplemental Pages. Why Long-Term Value-Sharing Matters To learn why sharing value with those who drive growth is so critical to your pay strategy, download and read our report today! Download Now Ready to Speak with a Phantom Stock Expert Now?