Document background
The Phantom Equity Agreement serves as a crucial instrument for companies seeking to align key personnel interests with corporate success while maintaining existing shareholding structures. This document type is particularly valuable when actual share issuance is impractical due to corporate structure, regulatory constraints, or strategic considerations. The agreement, governed by Swiss law, provides a framework for granting phantom equity rights that mirror the economic benefits of share ownership without transferring actual equity. It typically includes detailed provisions on grant terms, vesting schedules, valuation methodologies, and payment triggers, while ensuring compliance with Swiss corporate, employment, and tax regulations. The Phantom Equity Agreement is commonly used in both startup environments and established companies as part of talent retention and incentivization strategies, particularly when traditional equity participation is not feasible or desired.
