Albeit the fact that many firms have stopped providing their workers with stock options for various reasons, the option is beneficial and necessary for the workers. Jeremy Goldstein cites various reasons as to why firms stop providing workers with the option. One of the reasons is the fear of the losses that would occur if the stock value drops significantly, making it impossible for the workers to exercise the option yet the businesses in the situation would still be forced to report the expense.
The second reason is that many workers view the benefits more of casino tokens than cash because they know the economic downturns in an economy render them worthless.
Thirdly many firms avoid the option because it results in accounting burdens that may eclipse all the financial advantages accrued. Learn more about Andrew Rocklage: https://www.business.com/advice/member/p/jeremy-goldstein/ and http://officialjeremygoldstein.com/published-works/
Despite the above-associated problems, Jeremy Goldstein says that the type of compensation is still a preferable method to additional wages, better insurance coverage or equities. He associates this fact with the point that it is easier for the workers to understand the stock, which provides similar value as the above options.
Jeremy also says it’s beneficial because stocks only boost the earnings of an employee when the company earnings rise. Consequently, workers make the company’s success a priority as they know it will help their earnings rise via the stock option.
Finally, Jeremy says that firms that need to use the stock option to optimize the benefits while still avoiding the disadvantages.
Jeremy Goldstein is one of the partners at Jeremy Goldstein & Associates LLC. The law firm mainly deals with advising compensation committees, corporations, and chief executive officers in matters regarding executive compensation and corporate governance.
Before Jeremy founded Jeremy Goldstein & Associates LLC, he had experience from Wachtell, Lipton, Rosen & Katz law firm, where he was a partner. Jeremy has many times been involved in the largest transactions in the decade.