Jeremy Goldstein explains knockout options

As the economy continues to rise and fall, companies have begun to stop offering their employees stock options as part of their benefit packages. Some companies have stopped to save money. There are other reasons that have caused employers to no longer offer stock options. Learn more:


The stock’s value can rise and fall and if it falls severely, employees may not have enough time to sell their stock. Regardless, the company’s accountants still have to record all related expenses, which may lead to shareholders facing option overhang.


Employees no longer feel comfortable with stock options as a form of compensation, because they know the stock market can cause their options to lose value. They see options as playing at a Vegas Casino, instead of receiving guaranteed money. The financial costs related to the options can sometimes outweigh the benefits. Employees have often preferred a pay raise, therefore if the company elects to get rid of options, they will have the money to offer pay raises.


While some may criticize the options, some have decided to stay with them over offering pay raises. With stock options, employees receive the same compensation. Stock options are easier to understand for employees. Stock options value only increases when the company’s value increases. This encourages employees to work harder and find creative ways to increase the stock value.


Jeremy L. Goldstein is a top New York corporate lawyer, with more than 15 years of experience. He specializes in corporate governance and executive compensation. Jeremy Goldstein has been a key player in many of the country’s major corporate transactions. He is the co-founder of boutique law firm Jeremy L. Goldstein and Associates. Jeremy Goldstein is based in New York City and continues to help companies thrive in this uncertain economy. Goldstein continues to provide legal advice to individuals.