Partner William Charyk Explains Phantom Interests at DC Bar Event, Reports Bloomberg BNA

As reported by Bloomberg BNA, Bill covered how alternative compensation agreements, providing compensation linked to equity value without the transfer of a partnership interest, are a means to incentivize fund and deal teams without the need to confer formal partner status on the service provider. “If you have 100 people to whom you want to give equity-flavored compensation, it might not be practical to make them all a partner,” he said.

These arrangements can be carefully structured so as to provide for the same economic benefits  as a partnership profits interest without the tax problems associated with the initial grant of a partnership interest. “Virtually every other economic benefit that you could get as a partner, you could write into an agreement and you could have even more flexibility because you don’t have the initial barrier to overcome to making them a partner,” Bill explained at the event.

To read the full article from Bloomberg BNA, click here.