What are the benefits of phantom?

Another significant benefit of phantom options is their liquidity. Unlike other forms of equity compensation, which may be tied to the performance of the company's stock price, phantom options are paid out in cash. This ensures that employees can easily convert their phantom options into tangible financial rewards.

Phantom options offer several advantages that make them a valuable asset in corporate settings.

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Unlike traditional options, phantom options do not involve the use of real shares. This feature allows companies to provide employees with a form of equity compensation without the need to issue new shares or dilute the ownership stakes of existing shareholders.

For instance, in situations where a company prefers to avoid the dilution of its shareholder base, phantom options present a suitable alternative. They allow the company to reward employees without impacting the ownership structure of the organization.