Wake North Carolina Phantom Stock Plan is a financial incentive program offered by Hercules, Inc., a prominent company in the Wake County, North Carolina region. This plan is designed to reward key employees and executives for their contributions to the company's success. It provides participants with a stake in the company's growth and performance without actually granting them company shares. The Wake North Carolina Phantom Stock Plan operates by issuing "phantom stock units" to eligible participants, which mirror the value of Hercules, Inc.'s actual shares. These phantom stock units are not actual shares of stock but rather a hypothetical investment that tracks the value of the company's stock over time. Participants in the plan receive cash or stock equivalent payouts based on the growth and dividends of the phantom stock units. There are different types of Wake North Carolina Phantom Stock Plans offered by Hercules, Inc., tailored to specific employee groups or positions within the company. Some of these plans may include: 1. Executive Phantom Stock Plan: This plan is designed for top-level executives and key decision-makers within Hercules, Inc. It provides a substantial stake in the company's growth and performance, ensuring alignment of interests between executives and shareholders. 2. Employee Phantom Stock Plan: This plan targets employees across various departments and levels in the organization. It aims to motivate and retain talented individuals by providing them with a share in the company's success. 3. Performance-based Phantom Stock Plan: This type of plan focuses on rewarding performance-driven employees who consistently exceed performance targets or contribute to significant improvements in the company's financial outcomes. 4. Long-term Incentive Phantom Stock Plan: As the name suggests, this plan is designed to promote long-term commitment and loyalty among employees. It provides incentives based on the company's long-term growth and sustainability, rewarding participants for their continued dedication. In conclusion, the Wake North Carolina Phantom Stock Plan of Hercules, Inc. is a customized financial incentive program that allows key employees and executives to benefit from the company's growth and performance without receiving actual shares of the stock. With various types of plans available, Hercules, Inc. ensures that each participant receives an appropriate stake in the company's success, fostering motivation, loyalty, and alignment of interests throughout the organization.
Wake North Carolina Phantom Stock Plan of Hercules, Inc.
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FAQ
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).
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.
Phantom shares are only paid out if the employee meets certain terms. If an employee leaves the company before those terms are met, the phantom stocks disappear. If the company had used actual stock, those would have to be repurchased, which would make things more complicated. No voting rights.
Because participants in phantom stock plan are not shareholders, they are not entitled to dividends per se. However, the phantom stock plan may call for phantom dividends. Such payments might be included in a plan once a participant is vested in full value shares that have not yet been redeemed (or cashed in).
A phantom stock plan is an employee benefit plan that gives selected employees (senior management) many of the benefits of stock ownership without actually giving them any company stock. This type of plan is sometimes referred to as shadow stock. Rather than getting physical stock, the employee receives mock stock.
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.
Phantom stock can, but usually does not, pay dividends. When the grant is initially made, there is no tax impact. When the payout is made, however, it is taxed as ordinary income to the grantee and is deductible to the employer.
Phantom stock is a contractual agreement between a corporation and recipients of phantom shares that bestow upon the grantee the right to a cash payment at a designated time or in association with a designated event in the future, which payment is to be in an amount tied to the market value of an equivalent number of
5 Tips for Creating a Phantom Stock Plan Understand what you are and aren't offering. Phantom stock is essentially a contract in which you promise to pay cash to an employee once certain conditions are met.Set a proper valuation.Create your shares.Decide how to award stock.Set a reward schedule.