Today, numerous organizations are refusing to provide their employees with stock options. Many corporations are citing overhang and increasing initial and ongoing expenses. In addition, some companies complain about the complex accounting process involved in computing for stock options. Jeremy Goldstein posited that companies can control these factors by using a “knockout” method. Knockout options have equal time limits and vesting requirements as conventional stock options. However, when the share value falls, employees make losses.
Each option is valid for a shorter time. It is for this reason that the knockout technique reduces the initial accounting costs. Non-employee investors are not exposed to overhang threats from options that cannot be exercised. The other benefits of the knockout options include lower executive compensation figures and prevention of stock values from dropping below the required minimum. In conclusion, Jeremy Goldstein said that knockout options do not solve all problems, but they deal with the major hiccups associated with stock-based compensation.
Jeremy Goldstein is a qualified business lawyer. He has over 15 years of experience. Jeremy is a partner at Jeremy L. Goldstein & Associates, a renowned law firm in New York. He offers legal advisory services to corporations on various issues such as employee benefits. The attorney has rendered his services for leading companies, including AT&T, Bank One, Chevron, Verizon and Duke Energy.
Previously, Goldstein was a partner at Wachtell, Lipton, Rosen & Katz. In this firm, he was in charge of the compensation issues, including mergers and acquisitions, corporate governance and executive compensation. Jeremy has also worked as an associate at Shearman & Sterlin LLP. Jeremy Goldstein holds a BA and a Master’s degree in history from Cornell University and the University of Chicago respectively. He graduated with a Juris Doctor in law from the New York University, School of Law. Jeremy serves as a director of Fountain House, a non-profit organization.
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