Despite the name, phantom stock is not as mysterious as it sounds.
Phantom stock provides an employee benefit measured by, and tied to, the value of an employer’s common stock. Unlike actual stock that conveys a piece of equity ownership, phantom stock does not bestow any actual equity ownership. However, just like its counterpart, the value of phantom stock fluctuates based on the value of the company.
Offering employees phantom stock avoids unintentionally providing them voting rights. It also eliminates the complexity, fees and extra documentation that comes with offering common stock.
You can learn more about phantom stock here.
– Maxwell Briskman Stanfield, Meyer, Unkovic & Scott, MBS@MUSLAW.COM