Phantom Stock Plan

AAA

DEFINITION of 'Phantom Stock Plan'

An employee benefit plan that gives selected employees (senior management) many of the benefits of stock ownership without actually giving them any company stock. Sometimes referred to as "shadow stock."

INVESTOPEDIA EXPLAINS 'Phantom Stock Plan'

Rather than getting physical stock, the employee receives "pretend" stock. Even though it's not real, the phantom stock follows the price movement of the company's actual stock, paying out any resulting profits.

RELATED TERMS
  1. Stock Option

    A privilege, sold by one party to another, that gives the buyer ...
  2. Stock

    A type of security that signifies ownership in a corporation ...
  3. Employee Stock Option - ESO

    A stock option granted to specified employees of a company. ESOs ...
  4. Golden Handcuffs

    A collection of financial incentives that are intended to encourage ...
  5. Employee Contribution Plan

    A company-sponsored retirement plan where employees may elect ...
  6. Enterprise Investment Scheme (EIS)

    A UK program that helps smaller, riskier companies to raise capital ...
RELATED FAQS
  1. How is marginal propensity to save calculated?

    Marginal propensity to save is used in Keynesian macroeconomics to quantify the relationship between changes in income and ... Read Full Answer >>
  2. What are the SEC regulations on exercising stock options?

    The U.S. Securities and Exchange Commission (SEC) generally has limited regulations on the exercise of stock options, which ... Read Full Answer >>
  3. What are restricted shares?

    Restricted shares refer to shares of stock whose sale or acquisition is subject to specific restrictions laid out by the ... Read Full Answer >>
  4. What are employee share purchase plans?

    An employee stock purchase plan (ESPP) offers an incentive for employees to participate in their company's profitability ... Read Full Answer >>
  5. Why should investors research the C-suite executives of a company?

    C-suite executives are essential for creating and enacting overall firm strategy and are therefore an important aspect of ... Read Full Answer >>
  6. What is Substantial Gainful Activity (SGA) and why is it important?

    Substantial gainful activity (SGA) is what the Social Security Administration (SSA) measures to determine work, income and ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Haunting Wall Street: The Halloween Terminology Of Investing

    Beware of zombies and Jekyll and Hyde companies! Read about the spooky terms circulating Wall Street.
  2. Bonds & Fixed Income

    Accounting and Valuing Employee Stock Options

    Learn the different accounting and valuation treatments of ESOs, and discover the best ways to incorporate these techniques into your analysis of stock.
  3. Investing Basics

    Understanding Related-Party Transactions

    In business, a related-party transaction refers to a transaction where parties on both sides have a common interest or relationship.
  4. Economics

    Understanding Organizational Behavior

    Organizational behavior is the study of how humans interact in group environments.
  5. Professionals

    How the Advisor Compensation Debate Helps Clients

    The debate over compensating advisors is not likely to be resolved anytime soon, but clients should win with lower fees and better services.
  6. Entrepreneurship

    Employment Negotiations: What To Ask For & How

    Improving their first offer: What you should know
  7. Personal Finance

    The Economics Of Private Jets

    High-flying CEOs use private jets to avoid check-in hassles and departure delays. For them, concierge service and arriving on time are worth the price.
  8. Personal Finance

    More Bonuses And Fewer Raises Affect Workers

    Companies are increasingly replacing salary increases with bonuses, much to the detriment of employees.
  9. Investing Basics

    Explaining the Volcker Rule

    The Volcker Rule prevents commercial banks from engaging in high-risk, speculative trading for their own accounts.
  10. Investing Basics

    What is a Private Company?

    A private company is any corporation that does not have shares publicly traded in the equity markets.

You May Also Like

Hot Definitions
  1. Inbound Cash Flow

    Any currency that a company or individual receives through conducting a transaction with another party. Inbound cash flow ...
  2. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  3. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  4. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  5. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  6. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!