Jeremy Goldstein Explains Stock Options vs. Knockout Options

Jeremy Goldstein is a famous and sought-after attorney in New York City. He established the Jeremy L. LLC. With over ten years of experience in practicing law mitigation between employer and employee – he is one of the best legal counsel to provide advice on how employee benefits could be advantageous for the employer and the worker.



In the following paragraphs, Jeremy Goldstein provides a clear picture on how knockout options can be utilized to assist employers. For the past years many companies took a halt from granting their employees with stock options. The reasons behind this move are fundamentally because of large expenses and companies take necessary steps to conserve money. But in reality, there are three main reasons why the said corporations took the necessary step of inhibiting stock options from their employees. And the causes are:


  1. The corporation’s stock price have a natural tendency to fall, and employees will have a difficult time to put into effect their option privileges as stated in the contract. And despite the occurrence of this incident stockholders will have to wait for a certain price before they buy and sell stocks, along with the necessity on the part of the companies to account related expenses.
  2. Most employees do not trust this form of remuneration since they are aware of the fluctuations in the stock market that often devaluates stocks making them more like worthless coins instead of actual money that has a purchasing and paying ability.
  3. The provision of stock options for employees often makes bookkeeping and accounting difficult because of the expenses involved. Likewise employees prefer higher wages from employers in comparable to the benefits given by a stock option.


As per Jeremy Goldstein, stock options are better than equities, insurance coverage, or additional pay because employees can equate them to a particular value and likewise rank and file have an easier comprehension of what stock options are. However, stock options are only beneficial if the prices are high or are on the rise mandating management to exceed the quality of their normal work standards. And this means employees must go the extra mile to enhance services, entice suitable customers, and placate current clienteles.



Aside from the foregoing, stock options must also comply with particular IRS regulations that make it burdensome for employers to provide employees with option shares. Learn more:



To address the option benefits issue of employees/workers, Jeremy Goldstein suggests the utilization of knockout options that will inhibit undue expenses and lessen the occurrence of stock overhangs. Knockout options have identical requisites and time restrictions – the only difference is that if the price of the stock or share goes lower than a specified value the shares are forfeited since they are already considered insignificant.