Jeremy Goldstein is an attorney who focuses on employee benefits. With over 15 years of experience as a business lawyer, Goldstein is more than qualified to give advice to some of the best corporations in the industry. In fact, he has established his own law firm and has worked with a similar organization.
Jeremy Goldstein has played a vital role in transactions with Fortune 500 companies such as Verizon, Chevron, AT&T, Bank One, Duke Energy, and Merck. In addition, he has served on various boards of prestigious companies such as Fountain House, a law journal. More recently, Goldstein explained the knockout options, an alternative to stock options.
Ever since its creation, stock options has been one of the staples of the American Dream. After all, it lets the public own a piece of the corporations they buy from. However, in the recent years, companies have slowly moved away from stock options. Many attribute it to the companies wanting to save money, but others believe the problems are more underlying than it seems. Jeremey Goldstein explains the three main reasons companies fail to provide stock options.
First, stock values tend to drop significantly, rendering the stock option useless. There are a plethora of factors that determine the drop, including company expenses. Second, the employees are well aware of the economic cycle and can expect company downturns. As a result, they are reluctant to keep their stock options. Lastly, stock options often provide great financial burdens on the corporations. The accounting procedure alone costs companies valuable time and capital.
Despite the fact, there are benefits to stock options. For example, it could incentivize employees to always perform better. In this way, it is more beneficial than other compensations. Luckily, Jeremy Goldstein offers a solution. Knockouts, he explains, is the answer to solve all of these problems. Knockouts are similar to stock options, but when the stock price falls below a set limit, employees are no longer guaranteed the option. Moreover, it eliminates the employee skeptics and minimizes the financial burdens. In fact, companies can expect to save millions shortly after its implementation.
Although knockouts do solve many problems, it still is not perfect — nothing is. Each company should cater the knockout options with its auditors because the knockout options may not suit them the best. Furthermore, Jeremey Goldstein recommends companies wait about six to eight months before fully implementing the option.
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