Answers to firm’s stock option problems with well-versed Jeremy Goldstein
Get to know Mr. Jeremy Goldstein, partner at Jeremy L. Goldstein and Associates LLC, a franchise law company. The company advises Chief Executive Officers, compensation committees, corporations and management teams in managerial compensation and governance issues. In addition, he was an Associate at Shearman and Sterling LLP for one year.
Jeremy attended the New York University School of Law where he earned Juris Doctor in Law. He also attained a BA in art history, at Cornell University and after that, an MBA in art history at the University of Chicago. This charitable man is also a director of Fountain House which is a philanthropic foundation that is committed to the recovery of people with mental illness.
In the recent past, companies have stopped offering stock options to their employees, something that most people may argue that the companies do this to save money. It may be so, but there are some three significant reasons why this is taking place. First, the firm’s stocks could plummet thus making it difficult for the employees to exercise their options, and the stockholder may be subject to overhang. Secondly, employees are aware that when stocks are deemed worthless, the benefits pass for casino tokens rather than cash. The third reason is stock options may consequence into accounting deadweight thus making the costs higher than the advantages.
However, stock options have many advantages over other compensation types such as equities and additional wages. Stock options are straightforward to understand. Stock options hike one’s earnings when the firm’s share value progresses and in turn, motivates the employees to work harder and be dedicated to the firm’s success. There are also some rules that limit the supplying of employees with equities, but stock options are not affected by these rules.
Jeremy Goldstein says that if a company wants to play safe, it can consider incorporating Knockout stock options. They have the same value as the other stock options, but the employees lose these options if the firm’s share values plummet below a certain set limit. These knockout options do not take away all the troubles associated with other stock options, but they do get rid of many stock related challenges. Learn more: http://www.bizjournals.com/newyork/potmsearch/detail/submission/6423046