Document background
The Phantom Shares Agreement is utilized when companies wish to provide equity-linked incentives to key employees or contractors without diluting actual shareholding or transferring voting rights. This approach is particularly valuable in Swiss jurisdictions where actual share transfers might be restricted or complicated by regulatory requirements, corporate structure, or shareholder agreements. The document typically outlines the synthetic nature of the rights, calculation methodologies for determining value, vesting conditions, and payment triggers. A Phantom Shares Agreement is especially relevant for private companies, subsidiaries of multinational corporations, or organizations with complex ownership structures. The agreement must carefully balance Swiss employment law requirements, tax implications, and corporate governance considerations while providing clear mechanisms for value determination and payment execution.
