Corporations have been leaning away from giving employees stock options. Jeremy Goldstein recaps three reasons why most firms are giving up on the employee stock options.
The first reason is if the value of the stock drops, then employees cannot utilize the full value of it. Secondly, many corporations realize that during economic decline it can be disappointing to employees who worked hard for these stock options to be rendered with less value.
It takes the cash value out of the hard earned stock options and makes them seem like nothing more than token coins.
Third, stock options equate to accounting burdens Sometimes the amount of accounting work that needs to be invested into proper management of stock options outweighs the actual value of the stock options. Learn more about Jeremy Goldstein: http://files.ali-aba.org/pdf/Goldstein%20new%20BIO.pdf
While there are three key disadvantages to employee granted stock options, Jeremy Goldstein does detail some positive advantages towards corporations giving them to employees.
First, it can be rather simple for employees to understand stock options. Employees appreciate that something of equivalent value has been given to them.
Second, the staff of a corporation may work harder and take more pride in their work. If they work harder and have happier customers then the stock value in the corporation will rise which will then raise the value of their own private stock options. They can instantly see the value of their hard work.
Jeremy Goldstein is a partner at Jeremy L. Goldstein & Associates, LLC. He graduated from New York University School of law and prior to opening his own law firm he worked at Wachtell, Lipton, Rosen & Katz, Shearman & Sterling LLP.
While employed here he was very active in the firms compensation practice. Jeremy Goldstein has also been an active member for the Fountain House for the past 9 years.