In the recent past, most large corporations have decided not to give their employees stock options. Some do so for monetary reasons while others do so for reasons that are more complex. Three main issues have convinced companies that these benefits are not worth it:
If the stock value drops, employees will not be able to exercise their options. However, the company will still have to report any associated expenses. As a result, the stakeholders could be faced with option overhang.
Most employees do not trust this method of compensation. They are aware that the options could become worthless if there is an economic downturn. As a result, they view the benefits more as casino tokens rather than cash.
Options only serve to increase the accounting burden. As a result, the resultant costs could make any financial benefits worthless. Besides that, most employees believe they would benefit more if they were offered a higher salary instead of this option.
Stock options could still be better than better insurance cover, increased wages or equities. The reason is that it is quite simple for employees to understand them.
It allows employees to prioritize the success of the company. The reason is that personal earning only rise if the shares of the company rise in value. It leads them to become more creative and industrious at their workstations.
Some of the rules by the IRS make it quite hard for companies to give employee equities. It is especially so when the company has compensation packages in place for the top brass. It could lead to a bigger tax burden for the company if it gives shares instead of options.
All about Jeremy Goldstein
If a company requires sound legal advice concerning employee benefits, the man they call is attorney Jeremy Goldstein. With over 15 years of experience in this sector, he is amongst the best in the business. Jeremy Goldstein currently operates a law firm in New York, which he established after working as a partner for another firm for several years.
In his career, Jeremy Goldstein has played a critical role in major deals that have involved some of the leading companies in the US such as AT&T, Energy, Merck, Verizon, and Chevron. Besides his official work, Jeremy Goldstein is on the board of a renowned law journal and on the board of a nonprofit known as Fountain House.
Visit http://officialjeremygoldstein.com/ to learn more.