Phantom Stock Plans Demystified: Benefits, Compliance, and Strategic Use for Businesses

Wayne Zell delves into the intricacies of phantom stock plans, outlining their benefits and long-term incentives for fostering loyalty among employees. He discusses the tax implications and essential characteristics, including financial disclosures and participation rights. The episode covers key aspects such as vesting, performance metrics, and triggering events that determine payouts. Wayne also explains payout structures and the importance of compliance with IRC section 409A. The conversation concludes with compelling reasons to consider using phantom stock plans as a strategic tool for business owners.