Jeremy Goldstein Explains Why Stock Options May Be Being Phased Out

Jeremy Goldstein is a corporate attorney whose specialty area usually covers executive compensation, internal financial audits and other administrative procedures. In a public blog post, he talked about what companies were doing with employee stock options and whether they’re still a viable compensation solution. Learn more about Jeremy Goldstein: https://lawyers.justia.com/lawyer/jeremy-goldstein-1275422  and http://www.bizjournals.com/newyork/potmsearch/detail/submission/6423046

What Goldstein said was that many employees in various companies no longer embrace stock options as a great bonus compensation option and chief financial officers are looking for new ways to offer incentives. But why is that?

Stock options have had some benefits in that company sales and profit margins increasing can increase the value in the options, and that encourages employees to work hard at their jobs. They’re also fairly easy to understand in terms of concept, and they’re not subject to some of the more complex tax codes that govern equities options for employees. Read more: Jeremy Goldstein | Quora

But the problem Goldstein says, is that stock options could lose value if the economy takes a bad turn. Option overhang could also prove to be a roadblock to the stock option’s value, but also employees usually won’t want to deal with the accounting issues that could arise.

Jeremy Goldstein says alternatives to regular stock options are not easy to find an answer for, but knockout options are one consideration because they offer a little more flexibility in areas that traditional options do not. He said companies need to be careful about the timing of new stock options which he recommended adding after a 6-month period when the old options expire.

Jeremy Goldstein has been a licensed attorney for many years and is the managing partner of Goldstein & Associates, LLC.

He began studying law during his undergraduate days at Cornell University, completed his master’s at the University of Chicago and then received his JD at New York University’s law school. Prior to starting his own law firm, Goldstein was an associate at Wachtell, Lipton, Rosen & Katz.

There have been many M&A deals he has worked as an advisor for over the years, and many of them involve telecom companies and motion picture associations such as the Verizon and Alltel merger, AT&T and SBC Communications buyout, and the Bank of America and MBNA deal.

Goldstein holds several key positions in the American Bar Association of business as well as being a board member of the NYU Journal of Law and Business,. He is highly ranked as a top attorney in “The Legal 500.”

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