Employee stock options, a traditionally popular form of compensation, have been falling out of favor in recent years. Employees fear the options becoming worthless, outside investors are concerned with the market being flooded with low-valued stock upon expiration of traditional options, and employers dislike the excessive accounting costs associated with these methods. This doesn’t have to be the case according to financial experts like Jeremy Goldstein who believe opting into knockout options could solve many of these problems.
With traditional stock options, employees are essentially stuck with their contract until the expiration no matter how low the stock drops. This leaves investors dealing with the possibility of option overhang and the shares being driven down in value even more. The knockout option removes the risk of stock option overhang by allowing the contract to expire if the price drops below a certain price point. The knockout option can also potentially benefit the corporation by lowering costs due to the possible shorter contract periods and providing a more accurate financial picture to shareholders.
Jeremy Goldstein holds a Juris Doctorate from NYU’s School of Law as well as master’s and bachelor’s degrees in art history from the University of Chicago and Cornell University, respectively. Goldstein founded his own boutique law firm, Jeremy L. Godstein & Associates LLC, which focuses on compensation matters. Jeremy Goldstein started this company after almost fifteen years of experience as partner at Wachtell, Lipton, Rosen & Katz.
During his career, Goldstein has been a part of several important transactions involving large corporations such as Duke Energy, Miller Brewing Company, AT&T Corporation, Chevron, and Sears. Both The Legal 500 and Chambers USA Guide to America’s Leading Lawyers for Business list him as a top executive compensation lawyer.
Jeremy Goldstein has a passion for helping those in need, acting as director for the Fountain House. Fountain House focuses on providing assistance for men and women with mental illness and helping them lead a successful life in their community.
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