DIFFERENCE BETWEEN STOCK OPTIONS AND PHANTOM SHARES

Accelerate your business with these expert tips "Difference between Stock options and Phantom Share". Analyse and discover this TIP!

Stock Options and Phantom Shares are two different tools used to motivate and retain employees and other important groups within a company.

Stock Options (see+):

Stock Options are rights to purchase at a specific price and at a specific time in the future shares of a company. These rights may be sold or exercised at any given time, depending on the specific conditions set out in the agreement. An employee can receive Stock Options as part of their compensation package, and they can be an effective way to motivate employees to work towards the company's success.

Phantom Shares (see+):

Phantom Shares, also known as Stock Appreciation Rights, are a a form of compensation in which employees receive a cash payment based on the increase in the value of the company's shares. They do not provide actual ownership of shares to employees, but instead give them a right to a cash payment based on the performance of the shares.

IN SUMMARY:

The Stock Options provide a right to purchase shares in a company at a specified price.while, on the other hand, the Phantom Shares provide a right to a cash payment based on the performance of the company's shares, but do not provide actual ownership of shares.