As the name implies, there is no actual stock involved. Phantom stock is separate and wholly different than stock options.
With phantom stock, a corporation on, say, day one grants an employee in effect “x” number of shares in the corporation at its going market price. At a time agreed to in the future, a target date kicks in (usually 2-5 years) and the employee is awarded the value of the “x” shares on the date of the award.
Phantom stock awards can be very flexible. Particular attention must be paid when the
employer is a closely-held corporation and is not publicly traded on the stock exchanges.
Take care and be vigilant. There can be a lot at stake. Questions, as always, are welcome.