In the past, employees had the privilege of buying shares of the company. However, this is no longer the norm as many firms have withdrawn this privilege due the burden of accounting, rapid swing of share value and the compensation method that is not favorable to employees. Jeremy Goldstein has a solution to this matter and has encouraged companies to embrace what he refers to as the ‘knockout option’.
Advantages of the knockout option
To begin with, knockout options will increase an individual’s earnings if the company’s share value also increases. This will motivate employees to work extra hard with the aim of boosting the stock value of the firm. Second, for firms that provide compensation packages to top executives, they are likely to incur heavy taxes if they provide shares instead of options. Last but not least, options are easier to understand and they are of the same value to all the employees.
About Jeremy Goldstein
Jeremy Goldstein is the founder of Jeremy L. Goldstein & Associates. He is also a leading partner at the firm which offers legal advice to compensation committees, corporate governance, CEOs and management teams in executive compensation. Jeremy Goldstein holds a degree in Bachelor of Arts, Art History from Cornell University, a Masters of Arts, Art History from the University of Chicago and a Juris Doctor, Law from New York University School of Law.
Some of the notable works Jeremy Goldstein has done include assisting in the acquisition of Goodrich by United Technologies, Chevron Texaco Corporation, Bank of America Corporation, Phillips Petroleum company, Cingular Wireless Corporation and Verizon Wireless Corporation. Jeremy Goldstein also likes to give back to the society and for the past 9 years he has been the director of Fountain House, an organization that gives hope to victims of mental illness.
TO learn more, connect with Jeremy Goldstein on LinkedIn.