Phantom Stock Plan

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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."

BREAKING DOWN '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.

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RELATED FAQS
  1. How do you rollover/transfer a 401(k) to another 401(k)?

    When an employee leaves a job due to retirement or termination, the question about what to do with the accumulated balance ... Read Full Answer >>
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    Contributions to 401(k) plans come from employee salary deferral and employer match dollars. According to the IRS, employees ... Read Full Answer >>
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    Marginal propensity to save is used in Keynesian macroeconomics to quantify the relationship between changes in income and ... Read Full Answer >>
  4. 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 >>
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