Knockout Options May Resolve Accounting Burdens According to Jeremy Goldstein

Today, the majority of the top companies across the United States have shied away from offering stock options to their employees. The reason for this drastic change amongst corporations generally revolves around a company’s ability to save money, although there is often a multitude of additional causes. There are three major reasons that companies have reduced the opportunity for stock options, including the level of volatility associated with a stock drop, additional accounting issues, and the fact that an economic downturn may completely diminish the value of the option. Employees today also generally prefer an increased salary or bonus as an incentive over garnering stock options. While there are also many benefits for a company, as well as their employees to take advantage of stock options, including the fact that it may drive employee morale, offering an option that includes a knockout clause may be the best solution. What separates a knockout stock option from a more traditional stock option is the fact that the company can create a number that, once the stock price reaches, will cause the options to cancel for the employee. Including this knockout clause can help to significantly decrease the volatile accounting costs normally associated with traditional stock options.


Jeremy L. Goldstein and Associates, LLC, was founded by Jeremy L. Goldstein after he spent time with Wachtell, Lipton, Rosen, and Katz as a partner. He attended college at Cornell University, where he received his B.A., and later attended New York University School of Law and Chicago University to further his education. Many of the most lucrative corporate transactions were completed with the help of Jeremy Goldstein, including the partnership between South African Breweries PLC and Miller Brewing Company, as well as United Technologies Corporation’s acquisition of Goodrich. Jeremy Goldstein is also a very active writer and speaker, where he generally focuses on his expertise; executive compensation and corporate governance. He was recently named one of the best compensation lawyers in the United States by Chambers US Guide to America’s Leading Lawyers for Business and also in the Legal 500. Jeremy Goldstein also works with the NYU Journal of Law and Business, where he is a member of the Professional Advisory Board, and is also active regarding charity, as he is a member of the New Leadership Council of Make-A-Wish Foundation.


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