For quite a long time, companies have been providing their employees with stock options. However, this has not been the practice recently. According to Jeremy Goldstein, a lawyer who specializes in business practices, many businesses have resorted to this choice to save money, but this is not all. Some of the complex reasons that have made most employers take a back seat stock issuance include:
- A drop in the value of stock usually makes it difficult for some employees to execute their options
- There are huge accounting burdens that usually result from the stock options
- Employees becoming suspicious of the compensation methods
However, despite the negative effects of these options, Jeremy Goldstein notes that there are some advantages of stock options too. According to Jeremy, these options are preferred to the additional wages, equities or insurance cover as they are simple to understand and provide similar value to all employees. The other benefit with options is that they boost an individual’s earnings therefore since a person’s compensation will increase as a result of an increase in share price; the employees will be motivated to do their best. Through these efforts, the company gets to thrive and prosper.
Since most companies usually offer compensation packages to their top executives, the strict Internal Revenue Service (IRS) rules usually make it hard for them to offer these equities down to their employees. One of the main reason behind it is always the high tax burdens. Jeremy Goldstein, however, advises that companies can continue to offer these equities and enjoy the resultant benefits without necessarily suffering the negatives. This can be achieved through stock options that embrace barriers known as Knockout. Unlike their counterparts, with knockouts the moment a stock reaches a certain low, employees are able to lose them hence avoiding certain loses.
About Jeremy Goldstein
Jeremy Goldstein is an established business lawyer with over 15 years of experience in the industry. Currently, Mr. Jeremy operates a boutique law firm in New York where he provides his services to business institutions and individuals around his locality. His experience in the in the industry has helped him work and make an impact in distinguished companies such as Chevron, Merck, Duke Energy, AT&T, Verizon, and Bank One among others.
Mr. Jeremy Goldstein is passionate about the business law and shows this passion through his mentorship programs whereby he trains young adults to take up the practice later in life.
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