A surprising trend in recent years has been companies ceasing their offering of stock options. Jeremy Goldstein, a business lawyer, recently shared his thoughts on why he believes this may be a bad idea.
Goldstein explained both the advantages and disadvantages of offering stock options in great detail.
Companies that offer stock options could see an increase in productivity in the workplace. This is attributed to the fact that an employee is personally invested into the company they work for, they work harder. An employee is no longer just a worker, he owns a portion of the company, so now he will work harder to make sure it succeeds. This alone is a worthwhile reason to offer stock options to your employees.
Of course, on the other hand, if the company’s growth is stagnant, employees may see their investments as worthless and moral will go down. Worse case scenario, the stock plummets and moral bottoms out. Work ethic is slowed and productivity drops.
Goldstein explained that a company must know when to offer stocks and have a strategy that will benefit them best.
One of these strategy are offering knock-out options. Knock-out stock options are stock options with limited growth. For example, if an employee purchases a stock for 50 dollars, it may have a knock out of 60 dollars. When the stock reaches 60 dollars in value, the employee can sell for maximum profit. If the employee doesn’t sell, the most he will ever get for that stock is 60 dollars. This is a short term investment options meant to provide employees with quick cash bonuses.
Who is Jeremy Goldstein?
Jeremy Goldstein is a partner as his own firm in New York. His firm provides advice to many different types of clients. Jeremy L. Goldstein & Associates assist CEOs and management teams with corporate business, as well as more sensitive matters.
Goldstein is also knowledgeable in the area of mergers & acquisitions. He has assisted in many of the biggest business mergers in history. Companies like Goodrich and United Technologies; Verizon Wireless and ALLTEL; and Goldman Sachs have benefited from the advice offered by Goldstein and his firm. Learn more: https://www.visualcv.com/jeremygoldstein