Powerhouse lawyer Jeremy Goldstein is on a mission to help educate employers about stock options, actually knockout options. Many employers are choosing to not offer stock options to their employees anymore. Reason for this are complicated, but above else, they want to save money. What created this shift when it comes to stocks. Here are a few reasons why. Jeremy Goldstein also explains why knockout options can be a better fit for employers.
Stocks can be an accounting burden. This could create a bigger headache in the accounting department than it is worth. That is something to definitely consider. Employees may also receive a higher wage from their employer if they get rid of handing out stock options. Business owners also have become very wary of them. They are fickle, shifty, and a gamble in the end. If all hell breaks loose, then can be worthless. What use is that? On that note because of all of the fluctuation, they can drop significantly. This makes it impossible for employees to use them. Also, stockholders of the company may face unforeseen costs due to them.
You may wonder why then do employers offer them. There are advantages. If they can be used it can add up as wages for employees, boost a company’s earning, and employees will work harder for the company because they will personally benefit from it. Knockout options are a great way to still offer stock options. They expire if the company’s stock drops below a certain point, making it less of a headache, especially for the accounting department. Stockholders will not face overhang threats with these options. Employers can also cancel them if they drop under a certain amount for over a week. Knockout options also encourage employees to work harder for the company, so these options don’t expire.
Jeremy Goldstein is the founder and partner at Jeremy L. Goldstein & Associates. He has 15 years experience as a business lawyer. He previously was a partner at Wachtell, Lipton, Rosen & Katz. Jeremy Goldstein specializes in Merger and Acquisitions.
He received his education at the New York University School of Law. This hardworking individual was listed as the top leading executive compensation lawyer from the Legal 500 and Chambers USA Guide to America’s Leading Lawyers for Business.
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