No matter the size, industry or the performance of public companies in today’s environment in the corporate business, shareholder activists have a great influence. These companies are thus forced to review their compensation programs ensuring that they take into account the effects of the shareholder activists’ wave of current. Jeremy Goldstein, a business lawyer provides insightful considerations in the management of companies.
Goldstein is the founder of ‘Jeremy L Goldstein and Associates, LLC.’ Corporations turn to attorney Goldstein Jeremy for legal advice concerning employee benefits. Jeremy’s reputation is due to his over fifteen-year experience as a business lawyer who has played significant roles in major transactions involving top companies such as Chevron, Duke Energy, AT &T among others. Jeremy has independently established a law firm and is now serving as a board member of Fountain House-a prestigious law journal and nonprofit firm.
To save money, most firms opt to stop providing employees with stock options. Companies are persuaded to curtail these benefits due to three major problems that include; the probability of significant drop of stock value that may hinder employees exercising options, many employees becoming wary of the compensation method, and the considerable accounting burdens. The compensation method, however, provides equivalent value to all employees, boosting individual earnings in case of the rise of the corporation’s share values.
To continue awarding employees option and at the same time get the benefits and cuts on the costs, Jeremy advice firms to adopt the right strategy and embrace a “knockout” barrier option. The “knockout” mechanism helps firms reduce the initial accounting costs if the company’s stock is comparatively volatile. Stockholders’ worries on shrinking ownership shares as well are reduced. The knockout clauses that result in compensation figures being lower, looks better for shareholders. Even though the knockout option is not providing solutions to all problems, many of the biggest hindrances associated with stock-based compensation are eliminated.
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