Jeremy Goldstein is one of the active partners at the Jeremy L. Goldstein & Associates LLC. The law company is devoted to advising CEO’s, compensation committees, corporations, and management teams on corporate governance and executive compensation matters.
Before establishing the company, Jeremy Goldstein worked with other major corporations such as Goodrich.
Jeremy attended the New York University School of Law and graduated with a J.D. He also trained at the University of Chicago and Cornell University. Jeremy Goldstein has practised business law for close to two decades.
He loves writing on executive compensation and corporate governance issues. Mr. Goldstein wrote a piece on stock-based compensation to advise employers.
In the recent past, most companies have ceased giving their employees stock options due as it is prone to bring major problems to the firm such as accounting burdens.
Even when the stock value decreases and employees are unable to exercise their options, the business is required to report the associated expenses. Learn more about Jeremy Goldstein: https://corpgov.law.harvard.edu/contributor/jeremy-goldstein/ and http://files.ali-aba.org/pdf/Goldstein%20new%20BIO.pdf
This places the stakeholders at a risk of option overhang. Employees have also become suspicious of the compensation method since in the event of an economic downturn the options are worthless.
Despite the problems, stock options are preferable to other compensation plans because it is easier to understand. The fact that stock options will only increase the employee’s income if the share value of the company rises will motivate employees to prioritize the success of the company.
Corporations can gain the benefits of providing options to employees by adopting the right tactics. It must take the right steps to reduce overhand and the overhead running costs. Adopting a barrier option referred to as knockout is the best solution for companies. The employees will lose options if the company’s share value falls below a certain amount.
The knockout mechanism can reduce the accounting costs if the firm’s stock is quite volatile. It is important to note that knockouts don’t solve all the problems associated with stock-based compensations, but they banish most of the biggest problems.