Employers are changing their minds when it comes to offering their employees stock options. They can be costly, not pan out, and be a huge headache in the end. There are positive aspect and negative aspects to offering stocks as a form of compensation and here they are.
One of the pros of stocks as pay are they are pretty easy to use, understand, and exercise. On the other side stock prices may drop a lot making the process of using them very difficult. When this happens overhang threats are a huge concern for stockholders. Offering stock options may be a better choice compared to equities because the Internal Revenue Service has rules that make it pretty challenging for employers to offer equities to employees rather than options.
Stock options can make it increasingly hard and costly regarding the accounting department. This can be financially challenging for any business or company. On the bright side of stocks are that they encourage employees to invest more in the company’s success, thus making the options worth more. Unfortunately employers find that stock options are not completely reliable making them a risk. They can change in price like the wind costing their business financially.
New York City lawyer Jeremy Goldstein has a lot of experience in this field and has a great solution for employers who want to continue giving stock options to their employees with less risk. Mr. Goldstein suggests Knockout options as a safe and effective form of compensation. They are like stock options with some differences. When the options drop to a certain number they are automatically cancelled saving the company and employer from further costs and problems. Non-employees don’t face overhang threats with knockout options compared to regular options making it a safer bet.
At NYU Journal of Law and Business Jeremy Goldstein is a member of the Professional Advisory Board and is a member of the Board of Directors of Fountain House. He is a practicing attorney in New York City, New York. At the American Bar Association Business Section Jeremy Goldstein is on the the Executive Compensation Committee as a chair of the Mergers & Acquisition Subcommittee.
His main position is at his law firm Jeremy L. Goldstein & Associates LLC as Partner. They focus on a number of issues including compensation and CEO’s. Jeremy Goldstein studied law at the New York University School of Law where he received a Juris Doctor or JD. Mr. Goldstein previously studied Art at Cornell University and the University of Chicago with honors. During his career Mr. Goldstein has worked with huge corporations such as Duke Energy, Rohm and Haas Company, Sears, Roebuck and Co., and so many more. He previously worked as a partner at another law firm called Wachtell, Lipton, Rosen & Katz. Learn more: https://www.linkedin.com/in/jeremy-goldstein-26aa1b4