There’s a lot to be said for the way a company provides their employees with benefits. Historically, they’ve always offered stock options. In recent year, stock options lost their appeal to most corporations and their employees. As people want new things, three major problems arise when it comes to stock options.
The first problem is the most obvious: shaky stock values. Stock values drop and rise all the time, which means it’s not a place most people want to put their faith. It’s easy for rich people to risk the markets, but working people want to be in charge of their own money.
One of the other problems with stock options is the risk of option overhang. If a stock’s value drops too much, employees immediately lose their ability to exercise that option. That makes stock options look too much like cheap casino tokens. They’d prefer cash in that case.
Of course, another problem is the accounting burden. Behind any form of employee benefit is a lot of time and money. Eliminating stock options in favor of higher salaries is just easier for most. The tax burden that stock options carry may not be worth it in the end.
No matter how many ways stock options can go wrong; people like Jeremy Goldstein recommend that corporations continue to offer them. He suggests that these companies don’t choose benefit options just because it’s easier or cheaper. There’s more to employee benefits than just costs and time.
The most obvious advantage to stock options is employees’ personal investment in the company. When people hold stocks in the company they work for, they’re more likely to push themselves and the company to higher limits. They’ll focus on providing the best services and satisfying customers more than someone who’s just showing and working for a paycheck.
This is something that Jeremy Goldstein knows about. He’s everyone’s go-to business lawyer for many reasons. One of the main reasons is his 15 years of experience on the job. His career blossomed after he established an independent boutique law firm in New York.
Since opening Jeremy L. Goldstein and Associates LLC, he’s played a major role in several transactions for Verizon, AT&T, Chevron, and Bank One. His firm mostly advises their clients on matters of executive compensation and corporate governance. Occasionally, they’ll help companies with transformative corporate events and sensitive situations. Learn more: https://www.slideshare.net/JeremyGoldstein14/22nd-annual-naspp-presentation-2014