Jeremy Goldstein Explains How the Concept of Option Value is Helpful to Employees

Jeremy Goldstein is an experienced business lawyer with over 15 years’ experience. He has independently opened a law firm in New York. Jeremy is a partner at the Jeremy L. Goldstein & Associates. The law firm focuses on giving legal guidance to compensation committees, management teams, and CEOs on executive compensation. Before his investment in his company, he worked as a partner in different organizations.


In his lifetime, Jeremy Goldstein has overseen significant transactions involving big business. These include Chevron, Verizon, Merck, Bank One, Duke Energy and AT&T. Jeremy Goldstein serves as a board member at a prestigious nonprofit and law journal organization known as Fountain House.


But why do investments firm need the services of a qualified attorney, like Jeremy Goldstein? Usually, such companies deal with huge transactions that involve a lot of money exchanging hands. As such, the transactions taking place are legally binding.


In the past few weeks, most corporations have resolved to stop providing stock options to their employees. Most of the firm do so to save money. However, the main reason for this decision is always complicated. These are the three top challenges that make various companies take this route.


In the course of doing business, the stock value may depreciate at a higher rate. A significant drop in value may hinder the employees from exercising their options. Furthermore, the company will still be required to report the various expenses, and stockholders are facing the risk of option overhang.


Some employees have become suspicious about the issue of options as a compensation method. These people are aware that economic fluctuations adversely affect the value of the option. Therefore, granting options as compensation may resemble an issue of casino tokens as compared to the issue of cash.


An issuance of options has a great impact on the accounting methods. The accounting cost of various options granted to different employees may eclipse the advantages that the firm stands to gain from these derivatives. Most staff employees do not consider shares as valuable compared to the higher salaries that the employer should pay if the option were eliminated.


The issue of either call or put option to the employee is a direct ticket to ensure that the firm is successful. An employee will only be able to exercise the right of the option if the business is quite successful. Therefore, such employees will work round the clock to ensure that the firm has a positive cash flow and a healthy return on equity. To achieve this, the employees will strive to satisfy the existing customers and attract new ones.


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