Jeremy Goldstein Explains Stock Options & Knock-out Plans

Jeremy Goldstein is a business lawyer at Jeremy L. Goldstein and Associates in New York. He advises clients like corporate executives, management teams, and compensation committees. Goldestein’s advice consists of topics such as sensitive situations, executive compensation and corporate hierarchy.


Jeremy Goldstein has worked with other big law firms in New York prior to founding his own firm. Goldstein is an expert on mergers & acquisition and this has resulted in him working on some of the biggest mergers in recent history. Goldstein assisted in the Duke Energy and Progress Energy merger, he helped United Technologies purchase Goodrich, and he worked on the Goldman Sachs and ALLTEL corporation deal. When he isn’t working as a business lawyer, bringing companies together with his expertise, he is sharing his knowledge in self-written informative articles.


Jeremy Goldstein shared his thoughts on stock options and the cause and effect of companies ceasing their stock option offerings. Goldstein has discovered that there are only a few different reasons why companies are ending stock options.


Companies are afraid that their employees will get upset if stock prices drop, even a little bit. They are afraid that employees will be less motivated and experience low morale if stocks plummet. Another reason that employees have became so wary of using stock options as a bonus compensation method is because economic tragedy can make a stock option worthless. One final reason as to why companies are ending stock option plans is employee account burdens. An employee may actually lose money when he hires an accountant to handle his stocks.


Goldstein made a good argument in favor of stock options though. To contract a disadvantage of stock options, if your stock is doing good, employee morale will skyrocket. An employee who is invested into the company is more than a simple employee, they have personal relationship with the company. They want to see the company to better, so they will work hard and devote more of themselves to the well-being of the company.

There are a variety of tax breaks available for both the company and the employee when stock options are used as a bonus plan. If a company offer an employee a bonus, they would have to pay taxes on this bonus; when an employee is payed with stock options, these taxes are erased.


Goldstein explained that another option for stock options is a new plan called knock-outs. A knock-out is limited stock option plan that creates a ceiling for the earnings of a particular stock. For example, if an employee pays 10 dollars for a stock, when that stock reaches 20 dollars, they must sell. This ceiling creates a clear plan for the employee and simplifies the system. An employee knows exactly when they must sell to make the most profit. Learn more: