Jeremy Goldstein states that offering employees with stock option is preferable to giving them with better insurance cover, additional salaries or equities. This is because it is easy for employees to understand stock options. Also, stock options offer something of equivalent value to all staff members.
According to Jeremy Goldstein, options will only increase a person’s earnings if the company’s share value increases. This will encourage individuals to put the success corporation first, and they will work harder to increase potential customers, satisfy the existing ones and create innovative services for the firm.
Some Internal Revenue Service laws can make it hard to offer staff members with equities. This mostly happens when corporations create compensation packages for employees who hold top executive posts. As a corporation, providing shares can have significant tax burdens compared to giving stock options.
The best solution to gaining these benefits and avoiding excess costs is by adopting a strategy called “knockout’. In this approach, the stock options have similar assigning conditions and time limits as their standard counterparts. However, the workers will lose the options if the share value drops to a certain amount.
This knockout option will push employees to ensure that the corporation’s share value does not drop below the penalty level. The employees know that they will earn more when the stock price increases.
Jeremy Goldstein serves as a partner at Jeremy L. Goldstein & Associates LLC. Companies often turn to him when they need legal advice and consultation regarding benefits of their employees. His firm is dedicated to advising CEOs, firms in corporate governance matters, management teams, compensation committees and companies in executive compensation matters.
Jeremy Goldstein has over one and a half decade of experience a business attorney. Before establishing his law firm, Jeremy Goldstein served as a partner at a similar company. He has done transactions with several top companies such as Chevron, Verizon, Duke Energy, and others.
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