The phantom stock plan: Sharing a rise in stock value with your employee without diluting equity
By Alan E. Case
Business Advice and Financial Planning,
December 2014
The opportunity to defer compensation enables many types of programs and techniques that benefit an employee as well as a company. There are two basic types of stock-oriented deferred compensation plans—those referencing “phantom stock” and those referencing stock appreciation rights (often referred to as “SARs”). This article provides a brief introduction to the basic elements, and advantages and disadvantages, of a phantom stock plan.
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