Nearly every employee knows that there’s more than one way to be compensated for doing a job than collecting a gainful and worthwhile paycheck. There are benefits such as health insurance, 401k and other goodies that make going to work more than something a person has to do and something more like what they want to do. For those who are serious about their marketable job skills and the potential opportunities they can benefit from working with an a stable operation, there’s always been the stock option. Jeremy Goldstein has some advice on why this a good idea.
In recent times many companies have opted not to give stock options as a part of a compensation package because they can present certain accounting and bookkeeping complications. When these are combined with a less-than-stellar economy, owning stock in a company sometimes feels like a burden than a blessing. From being on the ground floor of a law firm, Jeremy Goldstein knows how this feels.
However, there are ways for employers and employees to meet halfway when it comes to getting more than paycheck from their relationship. This comes in the form of the knockout option which is not exactly an equity or the traditional way of owning stock in a company. There are few tricks and benefits to it.
Basically, the difference between knockout options and other stock options is that if their value falls under a predetermined level employees lose them. In other ways, they have the same time constraints and requirements as other options. The way the knockout option functions is simple. Between a certain amount of time, employees have the option to buy stock within the company.
However, if the stock value drops below a certain amount they lose that option. This allows a company to handle certain financial crisis, without having to worry about having the employed by the company in the same time. It’s basically an incentive that helps employees see the value of the company, and in theory, it ensures they work hard to make sure the business does well. This is the kind of advice Jeremy Goldstein gives out all of the time, due to his personal experience and professional expertise.