As a result of the economic recession and continued shaky economy, companies across the country have begun no longer offering employees stock options as incentives in their benefits packages. A few companies have said they quit offering them to save money. There are three main concerns that have convinced employers to ditch stock options.
- Should the stock value plummet for any reason, employees will not be able to sell their options. Corporate bookkeepers have to file all related expenses while opening up shareholders to the possibility of “option overhang.”
- Employees have begun to be uncomfortable with an unstable type of compensation, which are as a reward for the employees work. Employees now realize that the economy can affect stock value, causing their options to become worthless at any time. Employees have compared the stock options to the casino tokens as opposed to real cash rewards. Learn more here: http://officialjeremygoldstein.com/
- Stock options require accountants to keep track of them. The costs may outweigh any potential benefits. Employees prefer increased salaries instead of options. By eliminating options they can afford to give pay raises.
Other employees still would prefer stock options over increased pay, for those employees that have an interest in insurance coverage for their families. Those who prefer stock options are ones who have a grasp on how stock option benefits work. With stock options, each employee has the same type of compensation.
Jeremy Goldstein is a business attorney with more than 15 years of experience. He specializes in corporate governance and executive compensation. He co-founded Jeremy L. Goldstein and Associates LLC, which is a law firm based in New York. Jeremy Goldstein has been a part of several financial transactions involving several major companies including AT&T, Verizon, Bank of America and Chevron. Jeremy Goldstein has been featured in several business journals.