Document background
The Phantom Equity Agreement serves as a crucial instrument for Pakistani companies seeking to incentivize key personnel without diluting actual equity ownership. This document type is particularly valuable for private companies, startups, and family-owned businesses operating under Pakistani jurisdiction that want to retain control while offering competitive compensation packages. The agreement creates a contractual right to cash payments that mirror the economic benefits of equity ownership, typically including detailed provisions for grant, vesting, valuation, and payment terms. It's designed to comply with Pakistani corporate law, securities regulations, and tax requirements while providing flexibility in structuring synthetic equity arrangements. The document is commonly used when companies want to reward and retain top talent, align interests with company performance, or create succession planning mechanisms without transferring actual shares.
