This is from Wikipedia...
"For accounting purposes, phantom stock is treated in the same way as deferred cash compensation. As the amount of the liability changes each year, an entry is made for the amount accrued. A decline in value would reduce the liability. These entries are not contingent on vesting. Phantom stock payouts are taxable to the employee as ordinary income and deductible to the company. However, they are also subject to complex rules governing deferred compensation that, if not properly followed, can lead to penalty taxes.[citation needed]"
It all stinks to high heaven. Sell all of your old stock (that had intrinsic value tied to the company and the market) because we're going to wipe those out. But, to realign your interests with the company, let's write some fake BS phantom shares that will basically pay you a bunch of cash and increase the liabilities of a "bankrupt" company.
Some real stones on some of these guys....
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