Not a lot of people these days understand what stock options are. Back in the day, more people paid attention to the stock market and planned for retirement as a way of life. These days, people tend to live in the here and now.
Stock options aren’t as appealing as they used to be. For that reason, many corporations have stopped providing stock options as an employee benefit. Since this trend has taken effect, there a lot of business lawyers and experts, like Jeremy Goldstein, advising against this new trend.
While every corporation has its own reasons for doing this, they are three main reasons they seem to all have in common. For once, money isn’t really the issue here. It’s more about how corporations and their employees feel about stock options. Lately, stock options seem to have more disadvantages than advantages.
First, stock values can drop like a rock. People have seen stock values be up one day and take a tremendous fall the next day. If a stock falls too low, employees lose their ability to exercise that option, potentially leaving them in option overhang. Corporations don’t want that risk anymore.
Not only do corporations not want that risk; employees don’t want to risk either. That’s the second reason more corporations are offering different types of benefits. Employees don’t want potentially worthless stocks when they can have real cash they can control. Stock benefits behave too much like casino tokens.
Also, corporations don’t want to deal with all the paperwork and accounting burdens. It’s just easier to offer things like higher salaries, equities, or more personalized insurance coverage. While those benefits all sound amazing, Jeremy Goldstein still recommends that corporations give stock options another chance. In the end, stock options might be more preferable. Learn more: https://about.me/jeremy.goldstein
Jeremy Goldstein is a highly educated business lawyer with over 15 years of experience. His experience started back in his college days. He has degrees from New York University School of Law, the University of Chicago, and Cornell University. After college, he started working at Wachtell, Lipton, Rosen, and Katz.
After perfecting his craft, he opened his own boutique law firm, Jeremy L. Goldstein and Associates LLC. Since then, he’s become most corporations’ go-to guy when it comes to compensation advice.