The phantom stock program a virtual participation program in a company. It provides a contractual incentive for key employees or other advisors of the company to participate in the economic success of the company.

It is particularly interesting for young companies (startups) that cannot pay high salaries at the beginning. Beneficiaries under such program receive a virtual participation of economic value in the company, but no shareholder status (and thus no voting rights).

Remuneration is usually paid in case of an exit (e.g. sale of the majority of shares in the company or assets of the company).

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