Stock options are a great way to reward employees in times of prosperity. But these same stock options can also become a headache when the value of a company’s stock drops. In a recent blog post, a new and innovative solution by lawyer and finance expert Jeremy Goldstein was revealed. Known as knockout stock options, this strategy is a unique way to protect both the employer and employee.
First, let’s review why companies are wary of stock options. If a company’s stock drops, the options become worthless and the company still has to deal with the associated expenses. Thus, many employees become suspicious of this kind of compensation deal.
The knockout options strategy works like this – If the stock of a company falls below the option price for more than a week, then the option disappears, preventing option overhang for the stockholders. This creates an incentive for the company to keep the stock price up and make the options valuable to the employee.
The knockout option strategy creator Jeremy Goldstein is a partner at the boutique law firm of Jeremy L. Goldstein & Associates LLC. The firm works with CEOs, compensation committees, executive management and corporations in structuring executive compensation packages as well as advising on matters of corporate governance.
Jeremy Goldstein has been involved in numerous corporate transactions. Some of the largest deals worked on by Mr. Goldstein include the acquisition of Goodrich by United Technologies Corporation as well as the Duke Energy and Progress Energy merger. In all, Mr. Goldstein has been involved in hundreds of deals, including some of the biggest mergers and acquisition of the past decade.
By using Jeremy Goldstein’s knockout option strategy, companies can offer attractive compensation packages to their most valued employees while protecting stockholders from option overhang expenses. Learn more: https://www.intelius.com/people/Jeremy-Goldstein/Greenwich-CT/0CRCA91636W