In recent times, there have been changes in the manner in which business corporations consider stock options. These changes have been necessitated by the complex issues surrounding the issue of giving out stock options to employees. Stock options have been a nightmare for many corporations in managing their financial stability. The question then arises on, what is the cause of the change in perspective towards stock options in the corporate business environment? Three reasons stand out according to compensation lawyer Jeremy Goldstein. Learn more: http://jlgassociates.com/
First, the stock options are considered a gamble by the employees. Due to the changing economic times, it is almost impossible to predict the future of a business. The stock options prices keep on fluctuating and can be rendered worthless by hard-hitting economic depressions.
Secondly, stock options have proven to be an accounting burden to businesses. Businesses must incur the extra cost of managing the stock options books of account on top of recording other business transactions.
Thirdly, a drop in stock value normally affects the business organization negatively. Employees are in such situations unable to exercise their stock options. The business feels the heat since it has to incur all the expenses related to the stock options. The common outcome of such a situation is option overhang which affects the shareholders of the business organization. Businesses need to save face, especially for their shareholders and therefore stock options that affect their ability to impress the shareholders are becoming less attractive to the business environment. A business must maintain a good reputation at all times.
About Jeremy Goldstein
Jeremy L. Goldstein is a lawyer in New York. He is the founder of a law firm known as Jeremy L. Goldstein & Associates, LLC. He holds a Juris Doctor from the NY University School of Law.
Jeremy Goldstein is today among the top corporate compensation lawyers in New York. Jeremy Goldstein offers advice to businesses on viable methods of employees’ compensation.