Jeremy Goldstein Outlines How Knockout Options Can Benefit Companies

Recently, many employers have been providing their employees with stock options due to excessive operating costs. Jeremy Goldstein explains that companies can gain greatly from this type of compensation. Stock options are relatively simple and easily understood by employees compared to equities, additional wages or better insurance coverage. Secondly, since workers benefit only when the company’s share value rises, they are motivated to perform better, thus enhancing the company’s productivity. Companies can continue offering employees with stock options by using the “knockout” strategy. For instance, if a worker receives a 5-year term and is allowed to buy stock at $150 per unit, knockout option would expire once the company’s share value drops below $75.

However, employees cannot cancel the benefits if the price plunges for only few days or hours. Benefit can be canceled if the share values remain low for at least one week. With knockout options, firms will reduce initial accounting losses since options are valid for shorter periods. There is also less risk for shareholders to shrink ownership shares. Outside investors cannot face overhaul threats. Jeremy Goldstein states that with knockout options, the company will have lower executive compensation figures.

Jeremy Goldstein boasts of 15 years of experience in the legal field where he has worked as a business lawyer. He is a partner at Jeremy L. Goldstein & Associates LLC, a law firm that specializes in advisory services for compensation committees, management teams, CEOs, and corporate governance. Before establishing his law firm, the experienced business lawyer worked for Watchell, Lipton, Rosen & Katz, a renowned law firm as a partner. In the course of his career, Jeremy has participated in major transactions of leading companies, including the United Technologies, Bank of America, Duke Energy and Goldman Sachs.

Jeremy Goldstein chairs the American Bar Association Business Section’s Mergers & Acquisition Subcommittee of the Executive Compensation. Due to his vast knowledge on executive compensation and corporate governance matters, Jeremy frequently shares his insights through writing and speaking. The Legal 500 and Chambers USA Guide to America’s Leading Lawyers for Business listed Jeremy as a leading executive compensation lawyer. Additionally, the business law expert serves on the Professional Advisory Board of the NYU Journal of Law and Business. He is also a member of the Metro New York’s New Leadership Council of Make-A-Wish Foundation and the board of Fountain House, a charity initiative. Goldstein is an alumnus of the renowned New York University School of Law where he earned a JD. He also holds an MS from the esteemed University of Chicago. Jeremy graduated with a BA from Cornell University.

 

Follow Jeremy Goldstein on Facebook.