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Nabity on Business
At Nabity Business Advisors, we help business owners handle the “big picture” issues so they can stay focused on building for the future. Learn more at Nabity.com.
Nabity on Business
20. The Incentive Strategy Most Business Owners Never Think About
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What do you do when your best people help build the company… but the shares stay in the family?
Every successful family business runs into this tension at some point. Your leadership team drives growth, carries responsibility, and attracts attention from competitors. They deserve a path to build wealth alongside the company. At the same time, handing out equity can fracture ownership or complicate succession.
That tension led to one of the more clever tools in executive compensation: phantom stock.
In this episode, Dave walks through how phantom stock plans allow key employees to participate in the growth of a company without receiving actual shares. The structure mirrors the value of the business, ties rewards to performance, and creates a long-term incentive for leaders to stay and help build something bigger.
Key takeaways:
• Phantom stock rewards key leaders without giving up ownership.
• Phantom shares track the company’s value.
• Payouts happen at retirement, sale, or other liquidity events.
• Performance benchmarks can determine share awards.
• Planning helps manage the future payout liability.
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At Nabity Business Advisors, we help business owners handle the “big picture” issues so they can stay focused on building for the future. Learn more at Nabity.com.