Companies’ use different compensation plans for their employees and some of the methods may include stock options. However, the unpredictable market plays a significant role in their decisions. Another reason behind the scraping of the plan is to save on unexpected rise of stock that may lead to excessive use of money. Scrapping out of stock options is one way of saving money while to others companies is to prevent complexity involved in the process. Stock options as a compensation method face three significant problems that include:
The stock value which may drop or rise significantly leaves the company with angry employees when the value decreases. Regardless of this, the company needs to account for the associated expenses.
Due to the various way of getting information, most of the employees have realized the cost associated with stock may be less, and they have opted to stay clear of stocks as compensation method says, Jeremy Goldstein. The Employees prefer cash than tokes of such kinds due to the ever danger of economic downturns. For the companies, the burden associated with stock options is too tiresome and may lead to derivatives of the financial gains. However, some employees have insights on stocks and may value them as their compensation method instead of equities or additional wages.
Jeremy L. Goldstein is the managing founder and partner of Jeremy L. Goldstein and Associate LLC. The firm was formed with the primary aim of acting as a boutique law firm with a particular interest in servicing Chief executive officers, advising the compensation committees of various organization and handling on the corporation matters that deal with executive compensation. Additionally, the law firm deals with corporate governance matters like issues arising from sensitive situations and others transformative corporate events. Jeremy Goldstein is a holder of two degrees one in Law and another in Business Administration. He has worked in various companies globally dealing with compensation matters.
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