phantom stock

Definitions

A form of employee compensation that grants the right to receive a cash payment at a future date based on the performance of the company's actual stock price.

A contractual agreement that mimics the benefits of stock ownership without issuing actual equity shares to the employee.

Examples

The startup offered phantom stock to key employees as a way to provide equity-like incentives without diluting actual ownership.

Unlike traditional stock options, phantom stock is a contractual agreement that pays out a cash bonus based on the company's valuation.

The board of directors decided to implement a phantom stock plan to retain top talent during the company's transition period.

Synonyms

shadow stock synthetic equity notional stock phantom shares deferred compensation units virtual stock stock appreciation rights

Antonyms

actual stock real equity common stock physical shares tangible ownership vested stock direct equity