What is a phantom stock plan?
A)A purchase of stock by an unnamed party.
B)A cash payment equal to the stock's increase in fair market value over the prior year.
C)A stock option that is given to only a few employees.
D)Employee compensation hypothetically invested in stock for a period of time after which the employee receives the fair market value of the stock.

Question

Quizplus · Accepted Answer

A phantom stock plan is a form of employee compensation where the employee receives benefits tied to the stock's performance without actually owning the stock. It simulates owning stock, hence "phantom," and upon a certain event or date, the employee receives a payout equivalent to the stock's value or the increase in value over time.

What Is a Phantom Stock Plan