WHAT ARE THE KEY RULES?
It is not an all-employee scheme.
The shares involved are purely notional.
Plans can be either ‘Appreciation only’ or ‘Full value’.
WHAT ARE THE ADVANTAGES FOR THE COMPANY? This kind of scheme allows a company to receive the benefits of employee share ownership without actually offering shares or options. Phantom schemes tend to be flexible, and thus can be tailored to the needs of individual companies.
They are relatively easy to set up and administer.
Companies can choose which employees to target, so in practice this means that only key personnel tend to be included.
WHAT TYPE OF COMPANY DOES THIS SCHEME BEST SUIT? A phantom scheme would be best suited to companies who want to tap into the benefits associated with granting share options and share awards, but whom either want to avoid diluting their existing shareholdings or who are unable to do so for regulatory reasons.
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