Jeremy Goldstein is a founder and partner at Jeremy L. Goldstein and Associates, LLC. The law firm specializes in services such as advising management teams, compensation committees, and CEO’s on executive compensation.
Jeremy Goldstein has noticed that recently many companies are not giving their employees the option of owning stock. However, there are some main points that are stopping these companies from allowing their staff to own stock. They include the following:
- Most of these companies consider the stock options as an accounting burden to them. Therefore, their accounting costs become even more costly than the financial benefits they should accrue. In addition to this, some employees don’t think of the added stock options benefits and instead, they would want their salaries increased.
- The companies are also afraid of losing out on their money in the unfortunate cases when the value of the stock declines. This means that they will have to meet the unaccounted expense once the stock rises again. This shift in accounts scares the companies from giving out stock options which might have an unsteady value.
- Some employees may opt out of the stock options settlement. This is because most of them are afraid that when the stock option declines then they might end up with worthless stock. It’s even worse when the company loses the account altogether.
Even though some of these companies might brush off the stock options, there are several advantages associated with it. These advantages include the following:
- The stock option is an incentive for the employees. This is due to the fact they know that their interests are also invested in the future of the company.
- Some companies prefer the stock options because the employees find it an equal value in the company. Compared to equities, salary increase and insurance, the stock options provide a level ground.
- Some rules and regulations placed by revenue agencies might make it harder for employees to gain some benefits like gaining equities. This is because companies might face huge taxes due to them. However, the case is different for stock options. Learn more: https://thebrotalk.com/bro-recommendations/jeremy-goldstein-gives-us-nyc-recommendations/
Regardless of the negative aspect of stock options, companies might choose to embrace some strategies that will ensure their success. These strategies include methods of ensuring that the stock options always have the same value regardless of the situation. To avoid overhang companies can also ensure that they don’t call out their stock unless the situation is dire and urgent. In these cases, they can also have disclosure clauses in their documents that ensure the safety of the employees.
ABOUT JEREMY GOLDSTEIN:
After working in various reputable law firms, Jeremy Goldstein started Jeremy L. Goldstein and Associates in 2014. The business lawyer has more than 15 years experience in this industry.
Mr. Goldstein has a JD Law from New York University’s school of law. In addition to this, he also has a BA from Cornell and a Masters of Arts from the University of Chicago.