Jeremy Goldstein presents the knockout option strategy

Jeremy Goldstein has become New York’s premiere corporate lawyer. He is the founder of Jeremy L. Goldstein & Associates LLC, where he is also partner. His firm focuses on corporate governance and executive compensation. Before starting his own firm, he previously worked at a major law firm in New York.


Companies across the country who need legal advice on issues related to compensation of employees, turn to Jeremy Goldstein. Jeremy Goldstein has 15 years experience involving business law. Goldstein has dealt with some of the top companies in the country like Chevron, Verizon, Merck and Bank One. Jeremy Goldstein serves on the board of several organizations including the nonprofit Fountain House.


Both big and small companies have begun to eliminate stock options from employee benefit packages. Some companies do it to save money and others have been persuaded because of several issues dealing with stock options.


  1. The sudden drop on in stock value makes it near impossible for employees to sell their options. Shareholders are then faced with possible “option overhang.”


  1. Company staff don’t trust this type of benefit. They are able to understand that the economy can impact the stock market, making their stock become worthless. When their stock options become worthless, it just becomes a free play type of benefit, as opposed to employees receiving cash awards. Learn more:


  1. Stock options are a major burden for employees. This kind of trading can result in the costs outweighing any financial gains made. Some employees say they would rather receive higher salaries over options.


Despite critics and complaints, there are definitely some advantages to stock options. First, employees can easily understand options. Employees are motivated to work harder because the stock value is tied to the company’s success.


While knockout options dont solve all the problems. It has been able to solve some of the major issues dealing with stock-based compensation. Jeremy Goldstein recommends companies speak with auditors about the effect of options on their staff. Some high paid executives prefer stock options because each employee receives the same value of compensation. Also, employees personal earning are only increased when the corporate shares are increased.


Companies that are considering offering knockout options to staff, may want to wait a year after the current options expire before offering replacement options. If the company decides not to wait for a certain period of time, the options can cause the company’s quarterly statement to look bad.