Knockout Stock Options Offer Employers The Opportunity To Provide Equity

The decision to stop providing stock options is an unfortunate reality of life at many companies according to lawyer Jeremy Goldstein. The big drawback that many employers consider is that stock options can drop in value, so it would be tough for an employee to exercise those stock options if that is the case. With a need to report stock options and associated expenses, businesses have the additional challenge of a potential option overhang if too many employees try to dilute their options at once.


Economic downturns can also hurt the value of the stock options as their value will become worth less over time. But, stock options still provide an incentive to staff so that they will be willing to work hard. Knockout options are a solution because they are gone if the value of the company’s shares goes below a certain point. With a knockout option, the options expire when the value of the shares hit below $75. Employers are also able to specify the time frame that allows the stock value to drop before the options are cancelled, such as a week. This can also help to allow for a more accurate representation of compensation for executives and others.


Jeremy Goldstein is a partner at Jeremy L. Goldstein & Associates, LLC. This law firm advises CEOs and executive compensation committees. When issues of compensation arise which lead to questions surrounding a company’s profitability, Jeremy L. Goldstein is able to step in with legal expertise. Learn more:


Formerly. Jeremy Goldstein was involved as a partner at Wachtell, Lipten, Rosen & Katz. He has participated in a huge number of large transactions: United Technologies & Goodrich, Duke Energy & Progress Energy are among a huge list of other acquisitions which he has participated in. Jeremy Goldstein also serves in the M&A subcommittee of the American Bar Association Business Association.


Additionally, Jeremy Goldstein is a reputed speaker and works as a leading compensation lawyer. He serves as a member of the board of the Make A Wish Foundation of New York. He is also on the board of the recovery house, which is an organization that is designed to promote recovery of individuals addicted to substances.

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