Jeremy Goldstein is a widely known compensation lawyer that runs Jeremy L. Goldstein And Associates LLC in New York. Today, he has been going through the knockout options for employees and has published articles on the web to help employees as well as corporations understand what this will mean in terms of profit and long-term growth. For the majority of history, corporations have been offering company stock to their employees as incentives for their hard work and productivity. This has become increasingly difficult in recent years because of the constant fluctuations in the market and the strain it puts on small companies to compensate their employees. At the end of the day, incentives are a way for companies to hire the best talent available on the market.
Knockout options are being offered as an alternative for companies to provide incentives, which is essentially stocks but with executive control. One of the issues with this is that executives control the power and therefore they are able to manipulate stocks and gold incentives, which would be a negative thing. That being said, this is not legal and therefore not likely to happen, according to Jeremy Goldstein anyway. Throughout his career, which spans decades, he has not seen this as an issue all that often dealing with compensation law. Also, there were recent studies published in the past couple of years that showed evidence of the impact knockout options has on companies long-term growth, which is increased by a significant amount after several years. Learn more: https://www.quora.com/profile/Jeremy-Goldstein-20
Regardless of the potential good or bad that comes with the knockout clause available to corporations, a compromise will be needed in the end for employees and companies to find what works best for them based on their incentive choices. Should a corporation wish to stick to traditional stock options, they must be aware of the potential issues that could lie ahead.