Document background
The Phantom Stock Award Agreement is utilized by Canadian companies seeking to provide long-term incentive compensation that aligns employee interests with company performance without diluting actual shareholding. This document type is particularly valuable for private companies, companies with complex shareholding structures, or those wanting to restrict actual share ownership. The agreement must comply with Canadian securities laws, tax regulations, and employment standards across different provinces. A well-structured Phantom Stock Award Agreement typically includes detailed provisions on grant terms, vesting conditions, valuation methodologies, payment triggers, and tax withholding obligations. It's commonly used as part of executive compensation packages or broader employee incentive programs, providing a synthetic equity instrument that mirrors the economic benefits of stock ownership.
