What is a Deferred Share?
Deferred shares are a form of stock that is sometimes issued to key people within the issuing company. Usually, executives or directors of the company are eligible to receive deferred shares of stock. As part of a deferred share issue, the holders of the shares may not redeem them as long as they are in the employ of the company. Because a deferred share strategy involves issuing shares of stock that are essentially locked from active trading by the recipients, they tend to provide larger dividend payouts than either common stock or preferred stock. In the event that the company is doing well, the dividends can lead to a substantial nest egg for the employee. However, it is not possible to participate in a deferred share stock program once employment is terminated for any reason. When the employee is no longer with the company, the shares are converted to preferred or common shares at the current market value. Another important aspect of a deferred share stock program has to do with wh
