Phantom Equity
Content
Definition
Phantom Equity is a non-traditional form of employee compensation that provides rights to the value of shares, such as stock options, but does not confer actual equity ownership in the company.
Usage and Context
Phantom equity provides rights to the value of shares without giving actual ownership.
Frequently asked questions
- What is the phantom equity? Phantom equity provides rights to the value of shares without giving actual equity ownership.
- What is the difference between real equity and phantom equity? Real equity provides actual ownership; phantom equity provides rights to the value of shares without ownership.
- What is the difference between phantom shares and stock options? Phantom shares provide the value of real shares without actual ownership; stock options give the right to buy shares in the future.
Benefits
Phantom equity incentivizes employees by linking rewards to company performance without diluting ownership.
Conclusion
Phantom Equity incentivizes employees by linking rewards to company performance.
