Stock options have both advantages and disadvantages. There are many disadvantages that have made modern companies desist from applying them anymore as a means of compensation. The reason many corporations are quoting is that stock options have a way of affecting the savings of these corporations. As a measure to boost the savings, stock options have been reduced consistently. According to one of the best experts in matters of employees’ compensation, Jeremy Goldstein., apart from the reason about savings, there are also other reasons that have been making the stock options lose their values in such a big way.
According to Jeremy Goldstein, many corporations are left with the problem of dealing with options overhang after the stock values have dropped and it is no longer possible for employees to exercise their options. Stock options can be detrimental to the company if not well-taken care of. Overhang has a way of scaring away investors.
Workers, on the other hand, find stock options unreliable means of compensation. The stock value may gain or lose. In current times, the economic environment is very dynamic. Economic crises are a norm in many corporations. It is not possible to predict with accuracy that the stock options will be beneficial. They may lose and lead to losses.
Although there are all these disadvantages of stock options, there are a few advantages that can be realized from stock options. According to Jeremy Goldstein, the workers’ compensation program involving stock options can make employees work on their productivity of the company. No one wants the company to lose since they will also be affected.
Jeremy Goldstein apart from being an adviser on corporate compensations matters, he is an authority in matters of mergers and acquisitions. There are many organizations that he has helped both in cases of mergers and compensation.
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