What is Shadow Stock?

The term "shadow shares" is used in the financial world in several different ways. It can refer to a publicly traded share that gains value when the newly mentioned shares in a similar industry begin to trend up or on shares in what is called Phantom Stock Plan. Phantom's shares plan is given to people based on growing stock values ​​without actually accepting shares in the company. When a new automobile company publishes, shares in the first automobile company become shadow shares. New companies tend to experience a high volume of trading when they publish, increasing their value, and shadow shares often increase the value beside them. Finally, the market and values ​​are stabilized. Employees in such plans receive a set number of SHA "Phantom Stock". These are not real shares and the employee does not have the company's shares. When the value of the shares increases, the employee receives compensation based on the number of shares received. In other words, it is as if the company hadand shares that generated revenues.

Providing shares of employees in the company, false or not, is used as a motivation to provide the company's success. It is in the best interest of the employee to make things that will increase the value of shares and thus cause an increase in compensation. In the case of Phantom shares, companies may use this technique unless they are publicly traded so that they can provide compensation based on performance without losing shares and publicly traded companies can also offer shadow shares to employees.

Usually, cash payments that employees are entitled to from the Ashadow Stock program is postponed. This is designed to support the longevity of employment. Employees may not immediately offer shares and the number of shares provided by Phantom will increase over time. Payouts may not start for several years and give employees a reason to stay in society so they can gatherrye your cash bonuses. For tax purposes, money from the Phantom Stock program is considered earned income.