The uncertainties of the future of the stock market have led to many employers opting to do away with stock options for employees. Stock options are benefits which allow employees to purchase company shares at a specified price for a specified period. Different firms for example, as Jeremy Goldstein explains, have various reasons for stopping these options with some of them stating that it saves them money. Others blame it on the sudden fluctuations of the value of stocks which places employees at a loss of whether to put their options into effect or not. Some employees do not trust the scheme at all, instead opting to have their compensations regarding increased pay, which ultimately leads to increased expenses for the employers.
Jeremy Goldstein, a long time corporate business lawyer and partner at Jeremy L. Goldstein & Associates, LLC, has thus given corporations the option of providing employees with knockout options instead of complete eradication of stock options. Knock out options lose their value or are deemed worthless if the price of the shares drops below a certain amount specified by the employer. It offers a considerable advantage to firms as they only have to cancel options instead of worrying about losses due to overhang options that had not gotten exercised.
Goldstein also explains that the choice also motivates employees to work hard to ensure that the prices of the shares remain high as they also tend to benefit from that. It stems from the knowledge that if the stock prices go below the grant level (the amount at which employee stock options allow for the purchase of company stock), they will be the biggest losers or people that will be affected. However, Goldstein advice that companies should think first of all and weigh the pros and cons of knockout options before rolling them out to employees to determine their feasibility and sustainability.
Jeremy Goldstein holds a Juris Doctor Degree from New York University. With more than 15 years of work experience as a corporate business lawyer, Goldstein’s advice on legal matters about compensation and corporate issues is usually sort after by many corporations. Having earlier served as a partner in a New York law firm, Goldstein decided to start his practice, Jeremy L. Goldstein & Associates.
Goldstein has also gotten involved in the dealings of top corporations including NYSE Group, Duke Energy, Bank of America, Cingular, among many others.