Jeremy Goldstein, a New York-based attorney and Partner of Jeremy L. Goldstein & Associates, explains the possibilities of knockout options for the employers. He says that most companies have decided to drop the employees’ stock options in the recent years. Goldstein confirms that it is due to three reasons. Initially, if the stock value falls drastically, employees would find it difficult to execute the option, though businesses have to bear the expenses. Secondly, some employees are concerned with the option as they think that market fluctuations may make option worthless. Thirdly, it creates additional accounting issues that offset the financial advantages of the option. Jeremy Goldstein confirms that it is still considered as a desirable compensation option due to staff members can easily understand and relate the concept of stock options.
It can also significantly increase the wealth of the employees if the share price rises. It would also boost the morale of the employees to work hard to register better results and offer innovative services to clients. Goldstein confirms that the companies can still consider the option to employees by avoiding the unwanted costs associated with it. A careful strategy would avoid unwanted initial and recurring costs. Goldstein confirms the strategy as “knockout” – an option that employee loses the stocks if its value falls below a predetermined amount. To avoid the risk of a sudden plunge and associated selling, the employers can set an extended period, such as a week or more, to which the price should be down for knockout. Jeremy Goldstein confirms that if the stock price is too volatile, it can reduce the accounting costs. The option is also useful for existing stakeholders for avoiding the risks of shrinking ownership shares. It also ensures lesser executive compensation in disclosure documents.
Jeremy Goldstein is a well-known lawyer with deep expertise in Corporate Law and executive compensation structure. With his boutique law firm, Goldstein advises CEOs, corporations, management, and compensation committees about corporate governance matters and executive compensation. He founded his boutique law firm in the year 2014, and it grew as a prominent advisory firm to various corporations in the New York City area.
Goldstein started his legal career with Shearman & Sterling LLP in the year 1999 as an Associate. Next year, he joined Wachtell, Lipton, Rosen & Katz, a New York-based Law practicing firm, as a Partner. Goldstein continued with the company for next fourteen years and left it in 2014 for founding Jeremy L. Goldstein & Associates. Jeremy Goldstein completed his Law graduation from New York University School of Law.