Document background
The Phantom Share Agreement is utilized when companies wish to provide employees with equity-like incentives without altering their corporate structure or shareholding. This document type is particularly relevant in South African contexts where companies may be restricted from issuing actual shares due to regulatory requirements, BEE considerations, or group company policies. The agreement typically includes detailed provisions for grant terms, vesting conditions, valuation methodologies, and payment mechanisms, all structured to comply with South African tax and employment legislation. It's commonly used by private companies, subsidiaries of multinational corporations, and companies with complex shareholding structures that make actual share issuance impractical.
