How Knockout Options Help Employers
For the longest time, employees have been allowed to buy stocks from their respective companies. However, this norm is changing, and many employers have opted to stop employees from accessing stocks within the organization. The reason for this decision is dependent on a particular organization. Some of these firms are seeking to save money. However, there are several other reasons for this decision which such as employees are not comfortable with this form of compensation. Another reason is the fact that, this option comes with accounting burdens. Finally, the stock may go down which may make it impossible for employees to access it.
However, according to Jeremy Goldstein, the stock option is still preferable to other forms of compensation. The only thing the employers need to do is incorporate the ‘knockout’ option. When it comes to the knockout option, employees lose their stock if the share value falls below a specified amount. Adopting this option will motivate the employees to work therefore preventing the stock from falling below the specified threshold.
About Jeremy Goldstein
Jeremy Goldstein is a partner at the Jeremy L. Goldstein & Associates LLC. He studied in several Universities including the Cornell University where he received his B.A. cum laude. He has an M.A from the University of Chicago and a J.D. from the New York University School of Law. Before starting his own company, Jeremy worked with a large law firm in New York City.
Jeremy Goldstein also holds a position as the chairman of the Mergers & Acquisition Subcommittee of the Executive Compensation Committee of the American Bar Association Business Section. Due to his love for charity, he is a member of the Board of Directors of Fountain House, which is a group that helps people with mental illnesses. Jeremy Goldstein is also a writer and a speaker.
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