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Phantom stock

Also called: phantom shares, shadow stock

In one line

A cash bonus plan that tracks the value of real shares without granting any actual equity.

In plain English

Phantom stock mimics owning shares — you're paid as if you held them — but you never get real stock or voting rights. It's common where companies want to reward upside without diluting the cap table.

If you were explaining it to a 5-year-old

You don't get a real toy, but you're promised the same coins you'd have made if you'd owned one. It's pretend ownership with real pay.

Why it matters when you sell

Phantom stock pays out in cash at set events rather than giving sellable shares, so there's no secondary to arrange — just a future payment to understand.

Related terms

Stock appreciation right (SAR)Virtual sharesVSOP (Virtual Stock Option Plan)Ordinary income (equity)

Put it to use

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Sources

A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.

Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.