Over the past ten years or so, more and more corporations have decided that stock options no longer make good employee benefits. For decades, stocks options were the preferred method of giving employees something more than paychecks. In recent years, employers have noticed that employees want different benefits.
The preference of their employees is one major reason that many corporations are eliminating stock options. Some other reasons involve better compensation methods and fewer tax burdens. Whatever the reasons, it’s something that’s quickly catching on in the corporate world, and not everyone thinks it’s a good thing.
There are a lot of advantages to keeping stock options as the preferred compensation method that many corporations aren’t taking into consideration. More often than not, stock options offer an understandable level of equivalency, which other benefits can’t offer. It’s a more stable way to show employees what their value is to the company.
More than that, stock options make every employee personally and financially invested in the company’s success. When the company’s doing well, employees can see those results in the stock’s value. Stock options make people want to see their employing-company succeed, which means they’ll work harder to ensure every customer leaves happy and returns.
Despite how glorious stock options may sound, it should be said that not all stock types are the same. It’s important that each corporation talk with its accountants and lawyers and figure out with compensation method is the best fit; even if it’s not a stock option.
According to Jeremy Goldstein, renowned business lawyer, the best stock option to investigate is a “knockout” stock. This type of stock allows corporations to protect their employees while still offering all the upshots of traditional stock options. If the value drops too low for too long, the company can cancel that option, leaving the employee not responsible.
The question someone might ask is: who is Jeremy Goldstein? Jeremy Goldstein is a partner at his own boutique law firm, Jeremy L. Goldstein and Associates, and has more than 15 years on the job. He’s the most well-versed business attorney on matters of executive compensation and corporate governance.
Before established his law firm, he worked at Wachtell, Lipton, Rosen, and Kats, a similar law firm. He passed the New York Bar a few years after joining the firm and now sits on many of the Board’s chairs. Learn more: https://lawyers.justia.com/lawyer/jeremy-goldstein-1275422