It had been a welcome option for most large corporation employees. The decision to allow employees to access company stocks was a reprieve for both employers and employees. However, it looks like employees have begun to feel the effect of their short-term sacrifices for long-term benefits. The decision to allow employees to own stocks in the company was informed by the need to save money. However, lately, most companies that had embraced the practice frown and it and have reneged. Learn more: https://bestlawfirms.usnews.com/profile/jeremy-l-goldstein-associates-llc/overview/70073
The Genesis of the Complication
According to Jeremy Goldstein, a seasoned consultant in employee compensation, there are three main reasons why employers do not think that the practice of allowing employees to own stocks in exchange for reduced immediate material compensation is a good idea. One of the core elements behind the decision is that the value of the stocks of a company may decline so drastically that it does not offer employees sufficient compensation. Secondly, informed employees, and they are many, have decided that stocks may not compensate them sufficiently or even at all because they know that economic situations change even overnight, a company’s stocks may be rendered worthless in the stroke of an event. In other words, employees no longer think that stocks are a viable compensation option. Thirdly and finally, according to Jeremy Goldstein, the ensuing cost of computation of employee compensation and the eventual financial gain from the arrangement can be counterproductive. It is a complex accounting process. The costs of accounting can exceed the benefits of offering stocks as compensation.
The Way Forward
According to Jeremy Goldstein, compensation through stocks to employees is still a viable option. This option is especially workable with regard to compensation issues relating to insurance, extra wages, and equities. It is easy for employees to understand that there are an equivalent offer and an alternative to what they want. Additionally, since stock options present an avenue for gaining at a personal level, employees will be encouraged to work for the success of the company so as to make it more valuable and earn more in return.
About Jeremy Goldstein
Mr. Jeremy Goldstein is a law graduate from New York University. He has also pursued a Masters in the legal discipline and topped it up with a BA where he graduated with a distinction in all the subjects he studied. He is an authority when it comes to employment issues, and the dynamics revolving around striking a balance between incentives for employees and the final outcome of companies. Jeremy Goldstein is the CEO of Jeremy Goldstein &Associates LLC. His firm is focused on advising compensation committees in firms, management groups, CEOs, and corporations regarding the legal options they have in compensating employees.