Jeremy Goldstein Has An Alternative To Traditional Stock Options

Offering stock options to employees was once a highly sought part of a compensation package, but, today, it’s viewed warily by both employer and employee. For the employee, the value of the stock may drop and leave them with little in the way of compensation, which is why many people prefer a higher wage instead. Meanwhile, employers will still need to report the expenses, which leaves their shareholders holding the bag in the form of an option overhang.

There’s a better alternative, according to Jeremy Goldstein. He suggests offering knockout stock options. In this alternative, there are the same time limits and vesting requirements as with traditional stock options, but with one important exception. If the value of the stock drops below a predetermined rate, the employee loses the stock option.

In companies where the stock price is more volatile, the knockout option can end up saving the employer accounting costs. Additionally, the overhang is eliminated in this type of situation.

Additionally, employees are driven to perform better for the company. Jeremy Goldstein points out that, since they lose their stock option if the price drops, they will want to ensure the company continues to do well. This means making sure customers are satisfied, attracting new customers, and looking for ways to limit expenses. Learn more: https://www.linkedin.com/in/jeremy-goldstein-26aa1b4

About Jeremy Goldstein

As a partner of Jeremy L. Goldstein & Associates LLC, Jeremy works with corporations, individual CEOs, and entire management teams on issues of executive compensation and governmental compliance. He specializes in providing companies with legal advice in regard to employee benefits, an area of law he knows well. He has been a business lawyer for more than 15 years and previously worked with the firm Wachtell, Lipton, Rosen & Katz.

Mr. Goldstein also spends time writing and speaking publicly about the areas of law in which he specializes. Additionally, he serves on a committee with the A.B.A., which oversees how acquisitions and corporate mergers affect compensation packages for executives. Several leading legal associations have also named Mr. Goldstein a top professional in regard to his executive compensation expertise.

Mr. Goldstein also works with charity organizations. He divides his time between the New Leadership Council of Make-A Wish Foundation® of Metro New York and the Board of Directors of Fountain House. Fountain House is an organization that helps men and women with mental illness seek recovery. Jeremy is as passionate about his charitable work as he is about practicing his special area of law.