It’s hard to think about the corporate world without stock options, but that’s quickly the way the world’s going. Over the last few years, hundreds of corporations have stopped providing their employees with stock options for a number of reasons. Obviously, most people think it’s money-related, but that’s not exactly true.
While money does play a big role in most corporations’ decision-making process, saving money isn’t the only reason they’re getting rid of stock options. A lot of it has to do with their employees wanting higher wages or better insurance coverage instead of traditional stock options.
These days, people are more conscious about where their money is at all times. Too often, a company goes under and leaves its employees hanging, as they stock value plummets and crashes. When stock value drops too low, the stock becomes useless and cannot be exercised.
People don’t want their hard work to go to waste just because an executive or the economy does something wrong. In those cases, everything gets reported and possibly places shareholders at the risk of facing overhang, which isn’t as bad as worthless stocks but pretty close to it. In fact, that’s a major reason corporations are no longer offering stock options. Learn more: http://clsbluesky.law.columbia.edu/author/jeremy-l-goldstein/
Also, stock options come with huge tax burdens that may not make them worth the trouble. Accountants have to do a lot to ensure every employee gets what they deserve, and that takes a very long time and a lot of financial assistance; at the end of the day, stock options are too expensive.
As hard as stock options can be, experts like Jeremy Goldstein suggest they have their place in modern business. Not every corporation needs to get rid of stock options; especially if equivalency is a big deal with employees.
The last 15 years, Jeremy Goldstein has become New York’s number one executive compensation and corporate governance attorney. Everyone goes to him when it comes to advice about which compensation method to use. Jeremy Goldstein usually recommends stock options to his big-name clients.
When Goldstein isn’t working with clients like Verizon, he’s donating his time to local charities like Fountain House. Fountain House works with patients with mental illness and focuses on their full recovery.