What Jeremy Goldstein Wants You to Know About Knockout Options vs Stock Options

Recruiting the best talent can be a very tireless undertaking for many human resources areas in any companies today. Because of the ever-present competition between companies and corporations in the same or similar industries, type of candidates hired can make a major difference between operating a successful company and struggling to meet goals and objectives. As a result, companies are taking these areas very seriously.


Revisiting Compensation Plans


With all of this and more in mind, as many companies begin to devise their next compensation plans for the upcoming years, it is critical that they keep these and other related factors into consideration. Specifically, if these companies are intending to stay in business with large and growing profits each year. So, for any organization that may be in the midst of developing, revising and updating their compensation plans for all of their employees, each sector of the compensation package must be revised based on the merits of each. To that end, here is one of the basic elements of a company’s compensation plan, that must be revisited and taken care of with an informed decision.



Traditional Stock Options vs Knockout Option


Typically, when an employee is hired by any company, there are several different key things that they will be looking for in their new hire compensation package that they are provided with. For most people, aside from the salary amount that the company will be offering, they are usually looking for other different valuable perks like stock options. However, as things are starting to swiftly change within corporations, there is advice that is now offered that provides more details on what should be done. For instance, Jeremy Goldstein is now covering topics online that discusses how stock options are now being replaced by Knockout options.


According to Jeremy Goldstein, one of the primary reasons for the switch in option plans is to save the company money. This is because a knockout option is supposed to be a simpler plan that can be offered without the drawbacks that the traditional stock options provide. For instance, one of the main drawbacks of the traditional stock options is that the employees are becoming more hesitant about the actual value of their stock options, specifically it relates to their company’s stocks going up and down due the competition that it is now experienced in the stock market, based on Jeremy Goldstein and this teams’ findings.


Minimizing Employee Risks and Flexibility


While Jeremy Goldstein is currently pointing out the drawbacks of traditional stock options, he is also helping to identify the benefits of the knockout options. One of the most important is eliminating the risks that the employees take with the company’s stock option. Therefore, the risks itself for holding onto a certain amount of stocks each year can be minimized. It is also important to note that the traditional stock options are less flexible than the knockout options. This is because, according to Jeremy Goldstein, Knockout options will allow every employee to receive the same value of knockout options. Learn more: http://www.bizjournals.com/newyork/potmsearch/detail/submission/6423046

Michael Hagele, High-Tech Lawyer and Venture Capitalist

Most people tend to view the law as a professional steeped in tradition. However, Michael Hagele has combined his passion for the law with a love of technology. The Silicon Valley attorney and venture capitalist sat down with IdeaMensch to discuss his unique business model. Hagele, who has served as general counsel for several high-technology companies, set out to prove that a small firm could provide general counsel services of the same caliber as established firms.

After earning his undergraduate degree at the University of Iowa, Hagele went on to the UC Berkeley for law school, getting his start at Fenwick & West LLP in the Licensing and Online Commerce division. It was this experience that inspired him to bring the high-level of representation offered by major firms to a small-firm environment. He attributes his success to his belief in putting the customer first, which he argues is the single most important habit an entrepreneur can develop. Follow Michael Hagele on Twitter.

Starting a law firm is no small feat, especially when launching a new concept as Hagele did. According to the distinguished attorney, one of the best ways of dealing with the stress and meeting the challenge is engaging in regular physical activity and staying healthy. In addition, he cites social media as the main way he acquires new business.

Besides providing general counsel services for aerospace, high-tech, and biotechnology companies, Michael Hagele is also an active venture capitalist. The trend that most excites him right now is Artificial Intelligence, especially the prospect of genetic programming. Although Hagele is enjoys being at the helm of an innovative law firm and working with cutting-edge technologies, he recognizes that it is only possible because of his tenacity. During the interview, he talked about his job washing cars during the winter in Chicago, which taught him the value of hard work and perseverance.

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Jeremy Goldstein: Effective employees’ incentive methods

Stock options have had problems which make them unattractive to many corporate organizations. They are no longer recommended as an effective way of workers compensation. It has negative effects on both the worker and the company. On the side of the worker, stock options are unreliable since they can lose their value at any time. We are living at a time when the global economic changes are happening unexpectedly. It is very easy to lose something that you thought you owned. To avoid such life surprises, workers are opting to stay away from them. It is better to settle for a higher salary than to settle for something which you cannot tell its future.


On the part of the company, stock options have been a nightmare at times. When they lose value and workers cannot execute them, the burden falls on the side of the employer to account for all the stock options. At times they have resulted in option overhang which is a scenario that affects the shareholders in a company. This is usually not good news for the company since it can tarnish the good name of the company. Many companies have already started offloading the stock options methods from the list of workers compensation that they offer.




Earnings per Share (EPS) is an incentives method that is also applied to by companies as a means of business payments. It is one of the most effective methods if it is implemented in the right way. According to lawyer Jeremy Goldstein, the challenge with this method is that some businesses do not have a management that can implement it successfully.


EPS can create business growth in a very simple way. If the earnings per share go up, the stock value will also good up. Investors will be attracted to the company. However, this method is liable to misuse by rogue business executives. It is simple to fake the stock value using the EPS method.


EPS can also cause favoritism in an organization. The management sets the metrics for performance and they can use this power to favor some employees. With EPS, CEOs and other senior executives are said to wield too much power.


About Jeremy Goldstein


A prominent lawyer in New York called Jeremy Goldstein has given companies a leeway on an option they could apply, that will eradicate the problems that they face with the stock options. The alternative is called knockout stock options. This method will protect the company from a stock overhang.


Jeremey Goldstein is an experienced lawyer dealing with issues of corporate governance and workers compensation. Jeremy Goldstein has a reputation for guiding large corporation such as Verizon and AT&T in making corporate decisions by the advising the top management on the steps to take. Learn more: https://corpgov.law.harvard.edu/contributor/jeremy-goldstein/


Companies Are Starting to Stop Using Stocks As Compensation

Why are many corporations are suddenly not providing stock options for their employees? Jremy Goldstein believes that there are three reasons that employees have had their stock options taken away.


One of the reasons for the removal of stock is that the value of a stock can drop significantly and the firm can end up being charged fees for a stock that is not really worth very much. It is called option overhang and it is not something that firms like.


Another reason that this method of compensation can be risky. An option is great when the economy is doing well, but it can easily lose value if the economic hits a downturn. An option can seem as risky as playing blackjack in a casino.


A firm’s accounting department are not fans of stock options. The accountants have to keep track of the fees that they pay for options and they may find the costs of a stock option are more than it is actual worth. By eliminating the stock option, they might actually be able to pay their staff more since that money is no longer going to pay stock option fees. Learn more:https://www.slideshare.net/JeremyGoldstein14/aci-compensation-committee-presentation-2016


Who is Jeremy Goldsten? He is the partner of a boutique called Jeremy L. Goldstein & Associates LLC. It specializes in corporate financial issues. If a person or a corporation needs aboud advise about compensation committees, Chief Operating Officers, executive compensation and the governance of a corporation, this firm would be a good place to go. Before starting this firm, he was working as a partner at the legal firm of Wachtell, Lipton, Rosen & Katz,


Goldstein has played an important part in transactions that have involved major corporations like Chevron, Verizon, AT&T, Duke Energy, Bank One and Merck. He is the board member of an important journal and a non-government organization called Fountain House.