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Us Oge Phantom equity shares do not carry voting rights or similar rights associated with stock ownership. Equity Alternatives: Restricted Stock, Performance Awards, Phantom Stock, SARs, and More. Report phantom stock if the value of the phantom stock was more than $1,000 at the end of the reporting period or if you received more than $200 in income during the reporting period. The purpose of the Chaparral Energy Phantom Stock Plan (the "Plan") is to provide deferred compensation to certain key employees (the "Participants") of Chaparral Energy. As of the end of each of the two most recent fiscal years, Statement of changes in stockholders' equity, Present in a separate statement or in the footnotes for each period a statement of comprehensive income is presented. SARs are a form of bonus compensation given to employees that is equal to the appreciation of company stock over an established time period. At the time the payment becomes taxable, the company is entitled to a deduction in a corresponding amount (subject to general limitations under section 162 with respect to the amount being reasonable and not excessive). (Consider current and future positions). Publicly traded companies will want to be certain their phantom stock structure qualifies as performance-based compensation. How will the phantom stock units be valued in the event of a merger, consolidation, or a change in control of the company? The plan must be designed and documented to conform to section 409A. In general, if at redemption, the companys stock price is below the issuing price of the companys phantom stock, the plan participant is not entitled to a cash payment. In most cases, a valuation is required upon the employees termination, death, or disability. To keep learning and developing your knowledge of financial analysis, we highly recommend the additional resources below: A free, comprehensive best practices guide to advance your financial modeling skills, Financial Modeling & Valuation Analyst (FMVA), Commercial Banking & Credit Analyst (CBCA), Capital Markets & Securities Analyst (CMSA), Certified Business Intelligence & Data Analyst (BIDA), Financial Planning & Wealth Management (FPWM). Stock appreciation rights (SARs) are similar to a phantom stock-based program. Phantom Stock Options - Accounting & Tax Treatment %PDF-1.5 (If based only on the appreciation, this is commonly referred to as a stock appreciation right.) Phantom stock, also known as synthetic equity, has no inherent requirements or restrictions regarding its use, allowing the organization to use it however it chooses. What behavior or performance levels is the company trying to incentivize?