Given that stock values at times drop significantly such that employees cannot exercise their options, Jeremy Goldstein explains how knockout options help employers in such situations. Knockout options also come in handy when stock option benefits look more like casino tokens instead of cash, and when the said options cause considerable accounting burdens. Consequently, knockout options serve as some form of insurance cover. With knockout options, employees are free to lose these options when their share value goes beneath a certain point. They also reduce initial accounting costs and spare stockholders unnecessary worry over shrinking ownership shares. Knockout clauses also lead to a more accurate reflection of a company’s yearly proxy since they result in lower executive compensation figures on annual disclosure documents.
About Jeremy Goldstein
Jeremy Goldstein is a partner at Jeremy L. Goldstein & Associates, which specializes in executive compensation for CEOs, compensation committees, and management teams. He has in the past worked as a partner at Watchell, Lipton, Rosen & Katz, and as an associate at Shearman & Sterling LLP. He pursued his Juris Doctor in Law at the New York University School of Law, a Master of Arts in Art History at the University of Chicago and a Bachelor of Arts in Art History at Cornell University. His education background and work experience have earned him skills in corporate governance, executive pay, mergers and acquisitions, corporate law, private equity, restructuring, and employment contracts, among many others. Additionally, Jeremy Goldstein advocates for philanthropy work and has been serving as a director at Fountain House for more than nine years.
Jeremy Goldstein is a well-respected writer who gives his insights on different legal matters through several publications. He contributes regularly to the Harvard Law School Forum on
Corporate Governance and Financial Regulation and the American Conference Institute (ACI) publications, and also writes for several blogs as well. Lastly, in addition to English, he also speaks French.
Visit http://jlgassociates.com/ to learn more.