Companies are always looking for ways through which they can lower their wage bills while still providing their employees with ideal compensation packages. One of the strategies used by different companies is provision of stock options to employees. This approach gives the employees shares of the companies in exchange for a portion of their salaries or benefits. However, stock options have been in steady decline in the recent past. Jeremy Goldstein talks about this trend and the benefits of stock options to the companies.
Jeremy Goldstein contends that the decline in the popularity of stock options has been caused by three main factors. First, the value of the stock option has declined, thus becoming less appealing to employees. Most employees prefer being paid in cash to provide them with the freedom to invest only in investment opportunities that they consider appealing. Secondly, in the past, economic crises have been accompanied by a decline in the value of stocks. This situation has discouraged employees from taking stock options, as it exposes an individual’s income to market forces. Lastly, stock option needs complex accounting. This means that companies have to invest further in employing additional accounting personnel to make this compensation method successful.
Irrespective of the cons, stock options are still advantageous to both employees and companies compared to other compensation options such as equities, wages and insurance cover. With stock option, a company is in a position to provide all its employees with something that has an equivalent value to them all. Secondly, when employees become shareholders, they work harder to improve the company’s profitability margins, thus increasing the value of its stocks. The company benefits by enjoying enhanced productivity from the employees.
About Jeremy Goldstein
Jeremy Goldstein is a renowned American lawyer and entrepreneur. The attorney is an expert on employee benefits and management leaders’ compensations. Companies enlist for his services for purposes of ensuring that they pay their management leaders and top staff in accordance with the set laws in the United States. The legal expert is the founder of Jeremy L. Goldstein LLC, where he is also a partner. Goldstein has worked in the business law field for over 15 years, gaining extensive experience and vital skills that benefits his clients.
In addition, Jeremy is the chair of the Executive Compensation Committee of the American Bar Association Business Sections’ Mergers & Acquisition Subcommittee. Jeremy’s clients include Verizon, Duke Energy, Bank One, Chevron and AT&T. He holds an MS from the University of Chicago and a JD from New York University’s Law School. The attorney is an alumnus of Cornell University where he graduated with a BA degree.
Connect with Jeremy Goldstein on LinkedIn.