The business world is changing every day. Usually, that’s a necessity for survival, but lately, corporations started changing employee benefits. For decades, every major corporation offered stock options as the only employee benefit. Recently, many of them started looking for other options, no longer providing stock options.
Of the many reasons a corporation might discontinue offering stock options: money is the least likely cause. While some are dropping stock options just to save money, most have more complicated reasons. For most, those reasons involve the opinions of their employees as well as some advice from their accountants.
The first reason they’ve stopped offering stock options has to do with stock values. It’s risky placing their employees’ futures in a stock that can drop at any time. It’s not always within the corporation’s control to stop a stock value from dropping. Even if the stock is somehow salvageable, stockholders may still face option overhang.
Secondly, people just don’t trust the markets like they used to. It’s used to be so common to provide stock options that everyone understood the ups and downs of stock values. Now, people are wary of economic downturns which can make any stock worthless in the blink of an eye. Learn more: https://corpgov.law.harvard.edu/contributor/jeremy-goldstein/
The last major reason deals with the number of accounting burdens stock options come with. A lot of corporations now look at how man-hours affect their bottom line. By the end, stock options may cost more than just offering employees higher salaries.
Despite the common fears about stock options, lawyers like Jeremy Goldstein advice corporations don’t stop offering them. There can be a lot of benefits to providing employees with this kind of compensation. Stock options make every employee personally connected to the success of the company.
Jeremy Goldstein has been a corporate attorney for more than 15 years. He has more experience with executive compensation and corporate governance than almost anyone else in the nation. He’s given dozens of speeches and written numerous articles on both of those matters.
His law firm, Jeremy L. Goldstein and Associates is dedicated to advising all of their clients on a number of issues. Some of those issues also involved transformative corporate events and sensitive situations. As for Jeremy Goldstein, he’s been involved in dozens of major transactions with countless big-name clients and corporations.