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A Phantom Share Plan does not actually involve the awarding of shares to employees or executives of your company. Instead a cash bonus is paid out at the end of a specified period equal to the growth in value of the stated number of shares. This Plan is often used in subsidiaries where the holding company wishes to retain 100% of equity or where equity is not available for other reasons.


  • Taxed as any other cash payment but normally only when payout is made.