The use of stock options is a corporate compensation method. It has been applied for many years but is slowly coming down. It is no longer the method of compensation that it was. It is becoming riskier for businesses to apply it. Companies claim to be improving their capacity to save more money. It is one of the reasons that it has been coming down, but it is not the only reason. There are other reasons why this happening. Jeremy Goldstein is a lawyer who has been helping business corporations to deal with the issue of workers’ compensation. He has given more information about stock options.
First of all, let us look at the disadvantages of the stocks options. Stock options are not good for any business or its employees. Many issues have been associated with them which qualify them as one of the compensation methods that are outdated. Stock options are dependent on the performance of the company. If a company fails, stock options also fail. This means that employees lose their stock options. With economic depressions at an all-time high, employees are never sure if they will reap the benefits of stock options. It is very easy for one to lose them when a company fails.
Another reason is that stock options have far-reaching effects if they fail. They will affect even the shareholders of a company in a scenario known as options overhang. It is possible for a company to lose even its shareholders.
The use of EPS
Good alternative to the stock options is the Earning per Share (EPS). EPS is a performance-based system of workers’ compensation. It is a strategy that can ensure the company applies an effective system of giving out incentives to its workers. EPS, according to NY lawyer Jeremy Goldstein can help businesses run successfully. When the productivity of the workers determines the incentive, there will be equity, and the workers will be motivated to put more effort in their work as a way of getting higher pay.
Jeremy Goldstein adds that although the method is effective, there are those who oppose it since they regard it as a method that creates loopholes in the corporate sector for CEO to carry out favoritism and also dupe shareholders by creating a wrong impression about the stock value. EPS are therefore vulnerable to misuse by rogue business executives. Learn more: https://twitter.com/jeremy_gold1
About Jeremy Goldstein
Jeremy Goldstein is an experienced and reputable lawyer who offers business advice on workers compensation. Jeremy Goldstein has helped companies such as Verizon and the Bank of America structure an effective compensation program. He is ready to help even more businesses if need be. Jeremy Goldstein has a law firm in New York. It is called Jeremy L. Goldstein & associates.