Fidelity Expands Company Stock RK Capability

May 6, 2004 ( - Fidelity Investments' Stock Plan Services group unveiled full-service, online stock appreciation rights and phantom stock administrative, recordkeeping and participant services, the company announced.

According to a Fidelity news release, included in the new offering are:

  • more robust viewing, modeling and automated exercise capabilities
  • customized web screens, including the ability to handle participant proceeds as cash or as stock-settled shares
  • integrated online reporting, allowing companies to track and analyze plan data via one location.

The announcement said that stock appreciation rights and phantom stock are becoming increasingly attractive to plan sponsors and participants, since companies do not have to issue stock at the time of grant (eliminating dilution issues), and employees are generally not required to buy and sell any actual shares.

Stock appreciation rights and phantom stock arrangements are equity compensation plans similar to stock options. Companies make grants to eligible employees, who in turn have the right to the monetary equivalent – frequently paid in cash – of any potential increase in value related to the underlying shares after a fixed period of time, the Fidelity announcement said.