Phantom Equity: Its Advantages and Disadvantages for Incentivizing Employees

In this episode of “Just Compensation,” Megan Monson, Taryn E. Cannataro and Darren Goodman discuss phantom equity, which is a type of bonus plan often utilized by privately held companies, particularly when the company's stock has declined in value. The episode touches on why a company might want to issue phantom equity, why might an employee want to receive it, and what timing, taxation and other considerations should one keep in mind when designing this kind of arrangement as an alternative to issuing actual equity.

Speakers:

Megan Monson, Partner, Employee Benefits & Executive Compensation
Darren Goodman, Partner, Employee Benefits & Executive Compensation
Taryn Cannataro, Associate, Employee Benefits & Executive Compensation