Phantom Share Options are used for employee benefits and provide a great way to offer incentives to current or potential staff. Find out more about them here.
Finding ways to reward your team or incentivise new starters can be a headache, especially when you are looking for a meaningful way to show your appreciation without destabilising the shareholders’ investments. However, Phantom Share Options are a viable solution that provides a bonus to your team without creating problems with the running of the business. If you are interested in finding out more about Phantom Share Options, then we have the information you need!
What Are Phantom Share Options?
Phantom Share Options are simply a bonus scheme that provides employees with a future cash outcome in line with the value of shares. However, no shares are issued to the employer as part of this scheme, leaving your shareholders with full ownership of shares and still enabling you to provide an attractive benefits scheme for your employees that is contingent on them adhering to the requirements of the stock option to be able to enjoy the payout at a later date.
Are Phantom Share Options Attractive to Employees?
Phantom Stock Options are a great incentive for specific roles or employees as it provides a future payout if the person remains in post with the company, helping you to retain great staff and giving them a financial reward for loyalty. Typical options take between three to five years to achieve, but this can be personalised to suit your needs as a company, allowing you to reward people in a timeframe that works for you both.
Are Phantom Share Options Good for Business?
One of the typical Phantom Stock Option requirements is that the person remains in employment to be able to get the payout at the date specified, and it has become a good way to retain people in key areas where recruitment is difficult.
The other key benefit to offering a Phantom Stock Option is that it allows a business to offer bonuses that are reflective of the company’s value without having to give away actual stock. This means that the employee will benefit from an increase in the value of the business without being given voting rights or providing shareholder agreements to employees.
However, Phantom Stock Options are not a good idea if you are looking for a whole staff incentive scheme as it will be expensive as staff begin to retire or when the maturation date rolls around.
Getting the Best Legal Advice for Phantom Share Options
If you are keen to find out more about Phantom Stock Options or want to set up a new scheme for your business, then it is vital to get the right legal advice first so that your scheme works well for you and your employees. Take the time to find an expert in the field so that you can be sure that your offering is valued by your team and valuable to you as a company.