The economy continues to be unstable, leaving employees to reach the conclusion that they can no longer offer employees stock. Part of the reason is to cut costs. Stock options have been a sought after perk of business, but there lays three key problems that have encouraged employers to stop offering the stock options.
With stock options, the value is tied to the stock price, which is based on the value of the company. Therefore the price can drop at any time, causing serious problems. Despite all that, employers are required to report expenses and stockholders are faced with the possibility of stock option overhang. The other concern is that employees have concerns with stock options. Employees see stock options as gambling. Employers have found that options dont always have a financial advantage. Stock options have been known to create accounting burdens on the company.
While employers see stocks options as negatives, there are some positives to the stock options. Stock options are considered to be easy to understood by employees. Employees prefer stock over additional wages, equities and insurance. Since options are based off the company’s value, it gets employees to work at growing the company’s value through bringing in new customers.
Jeremy Goldstein is a corporate executive lawyer who is offering up knockout options to employers who are questioning offering stock options. Knockout options are pretty much the same as other options, however they don’t hurt the employees because if the stock value falls under a predetermined amount, the employees will just lose the stock. Goldstein’s idea provides employees with the drive to keep their company’s stock value rising.
Jeremy Goldstein is one of New York’s top corporate lawyers. He specializes in executive compensation and corporate governance. He has overseen several of the country’s corporate transactions including Verizon and AT&T merger.