Document background
The Phantom Equity Agreement is a strategic tool used by Singapore-based companies to attract, retain, and motivate key employees without diluting actual shareholding. This document is particularly valuable for private companies, startups, and organizations that want to offer equity-like incentives while maintaining their existing share structure. The agreement details the mechanism for granting phantom equity units, which mirror the economic benefits of real shares but are settled in cash. It includes essential provisions for valuation methodologies, vesting conditions, payment triggers, and tax treatment, all aligned with Singapore's regulatory requirements. The Phantom Equity Agreement is typically implemented as part of a broader compensation strategy and requires careful consideration of corporate, employment, and tax implications under Singapore law.
