The Franklin Ohio Book Value Phantom Stock Plan is a unique financial program offered by First Florida Banks, Inc. designed to provide employees with an incentive and compensation package. This plan is specifically tailored to the location of Franklin, Ohio, where the bank operates and aims to attract and retain talented individuals within the organization. The purpose of the Franklin Ohio Book Value Phantom Stock Plan is to simulate ownership in First Florida Banks, Inc., despite not actually providing stock ownership. Instead, eligible employees are granted phantom stock units, which mirror the book value of the company's stock. This means that as the book value of the bank's stock increases over time, so does the value of the phantom stock units held by employees. One advantage of the Franklin Ohio Book Value Phantom Stock Plan is that it aligns the interests of employees with the profitability and success of First Florida Banks, Inc. By offering employees a stake in the bank's performance, it fosters a sense of ownership and encourages them to work towards the long-term growth of the organization. This, in turn, can boost overall employee morale and motivation. There may be different types of the Franklin Ohio Book Value Phantom Stock Plan within First Florida Banks, Inc., each with its own unique features. Some of these variations could include: 1. Performance-based Phantom Stock Plan: This type of plan rewards employees based on predetermined performance metrics. For example, if the bank achieves specific financial goals or exceeds industry standards, employees' phantom stock units may have an increased value. 2. Seniority-based Phantom Stock Plan: This variation links the number of phantom stock units allocated to an employee to their length of service with the organization. The longer an employee has been with the company, the larger their phantom stock unit allocation. 3. Vesting-based Phantom Stock Plan: This plan may incorporate a vesting schedule, where employees gradually earn the right to their phantom stock units over a specified period. This encourages employees to remain loyal to the organization, as their invested units may be forfeited if they leave before the vesting period is complete. The Franklin Ohio Book Value Phantom Stock Plan offered by First Florida Banks, Inc. is an attractive compensation program that provides employees with a stake in the success of the organization. By offering phantom stock units based on the book value of the company's stock, employees are motivated to contribute their best efforts towards the bank's growth and profitability, ultimately benefiting both the employees and the organization as a whole.
Franklin Ohio Book Value Phantom Stock Plan of First Florida Banks, Inc.
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FAQ
For both phantom stock and SARs, employees are taxed when the right to the benefit is exercised. At that point, the value of the award, minus any consideration paid for it (there usually is none) is taxed as ordinary income to the employee and is deductible by the employer.
Since phantom shares are not the same as real stock, you don't have to worry about employees voting down key decisions, such as selling the company.
Phantom stock plans do not result in shareholder dilution because actual shares are not being transferred. Employees do not become owners. Instead, they are potential cash beneficiaries in the underlying company value.
The answer involves two variables: (a) the presumed value of the company, and (b) the number of shares to be used in the plan. Once these two answers are known, the phantom share price is calculated as the former (the value) divided by the latter (the number of shares).
Phantom stock is not a good idea if the company is planning on issuing them to most or all employees, especially if the shares will be paid out when the employee leaves the company or retires. In that case, phantom shares may be ruled illegal because of the Employee Retirement Income and Security Act (ERISA).
The phantom stock becomes a liability that the company must eventually convert to either cash or company stock. In privately held businesses, company stock is rarely an option. employees like these plans as any phantom stock they receive is not taxable until converted into cash by the company.
The answer involves two variables: (a) the presumed value of the company, and (b) the number of shares to be used in the plan. Once these two answers are known, the phantom share price is calculated as the former (the value) divided by the latter (the number of shares).
Definition and Example of Phantom Stock Phantom stock is a form of employee compensation that gives employees access to stock ownership without actually owning the stock.
A. A phantom stock plan is a deferred compensation plan that awards the employee a unit measured by the value of a share of a company's common stock, or, in the case of a limited liability company, by the value of an LLC unit. However, unlike actual stock, the award does not confer equity ownership in the company.