Most business leaders want to incentivize their employees to drive company growth but are reluctant to share stock. They worry about it diluting the value of current shareholders. They are also wary of adding owners to the business that are neither needed nor wanted. However, these same leaders worry that unless they offer equity, their people will lack commitment to building the future company. It’s a conundrum…but it doesn’t have to be. Phantom stock could be a solution. It allows owners to share value without sharing actual stock. Post-pandemic, it’s surging in popularity with private businesses. With that in mind, this month’s Growth Notes focuses on this long-term value-sharing approach—what phantom stock is and why so many companies are offering it.
Phantom Stock: Everything You Need to Know
(Upcounsel)
Phantom stock is an employee benefit where selected employees receive benefits of stock ownership without the company giving them actual stock. It is worth money just like real stock, and its value rises and falls with the company's actual stock (or what the company is valued at, if it's not a publicly traded company). Employees are paid out profits at the end of a pre-determined length of time. Read More>
Phantom Stock: 5 Myths that Need Correction
(VisionLink)
Myth #2—If you give out phantom shares, you can’t give away actual stock also.
Phantom and restricted stock or stock option plans are not mutually exclusive rewards offerings. The leaders of most organizations are willing to make different levels of long-term financial commitment to employees based on a variety of factors. Maybe some have been making a contribution for a long period of time and others just arrived in the company. Current owners may envision one or more of their employees assuming a shareholder role in the company sometime in the future and want to start giving away equity incrementally starting today. Read More>
ESOP or Phantom Shares: Which Makes More Sense for Your Company?
(Especia)
In today's entrepreneurial environment, businesses understand the importance of human resources. They properly reward employees with stock-based incentives such as Employee Ownership Plans (ESOP) and stock-based incentives such as…Phantom Stock, and Stock Valuation Rights (SAR). Of these attractive employee benefits plans, Phantom Share is becoming more and more popular as a reward due to its increased flexibility and customization options. This article compares ESOP and Phantom Stock and explains which one suits your business or employee needs. Read More>
The Phantom Stock Workbook
See if You’re a Candidate for a Phantom Stock Plan
Download Our Free Guide
Phantom Stock is becoming the favorite long-term value-sharing plan of private businesses. That said, it’s not for everyone. Some companies aren’t ready for a plan or should be offering something different. So how do you decide?
The Phantom Stock Workbook was created for company leaders who would like to know how to answer that question. It offers insight into what makes a business a good candidate for phantom stock—and when it should be avoided. To learn whether your company should consider a phantom equity plan, download this free guide today! Learn More>
