Stock options have been associated with a lot of problems. They have been associated with overhang and being an accounting burden to the accountants. As a result, there has been a push to change this situation by offering alternative compensation methods that will fill in the gaps that are created by the stock options.
According to compensation lawyer, Jeremy Goldstein of Jeremy L. Goldstein & Associates, there is an option called “Knockout Barrier” option. This is an option that solves the problems associated with the stock options. It has a time limit over which it is valid. In case the prices fall, the options may be deemed to have expired. It is still clear that the employees risk losing their options in case the process falls. However, the business will benefit from reducing the accounting burden, and the risk of stock overhang will be eliminated.
Why does the accounting burden reduce? When the option is time-bound, let say an hour, an account will not have a hard time recording the transitions involved. Knockout Options, unlike the stock options, enable the accountants to prepare a clean annual report that is easy to read and comprehend. To the workers, Knockout options offer attractive benefits.
Knockout barrier options may not have all the answers to workers compensation issues, but at least they eliminate all the problems associated with all other forms of compensation. So far it is the best method and is recommended by Jeremy Goldstein, a prominent lawyer in New York.
The above is not the only incentive methods that can be applied in a business environment. There are other methods, but all in all, the applicability of the method depend on the goals of accompany. A method that works for one company may not work for another.
Jeremy advises companies to choose the methods that best fit their business goals. In his many years of experience, he has seen some companies get into trouble financially for making decisions which do not match with their mode of operations.
Another method that is commonly used is the “Earnings per Share.” This is a payment method that is based on the performance of an employee. EPS is a method that determines the stock prices of a company. The stock price determines if people will invest in a company or not. So, how a company implements the EPS will determine the growth of the business.
About Jeremy Goldstein
Jeremy Goldstein is a compensation lawyer who has worked for big corporations in the country. Jeremy Goldstein has a huge reputation and remains one of the best performing law firms in the country. He has worked with the likes of AT&T and Verizon. Jeremy Goldstein has a law firm called Jeremy L. Goldstein & Associates. It is based in New York. Learn more: https://www.quora.com/profile/Jeremy-Goldstein-20