Stock options are one of the widely used workers’ compensation programs. It has the advantage of making the workers feel like they own the company. By given a small ownership stake in the company, stock options make workers work hard since they also stand to gain when the company does well. Workers are likely to give their all when they know that better results would result in an award. Stock options ha another advantage in that they are not taxed by the IRS. They are not counted as an asset that one owns. They take away the burden of taxation from the worker.
However, even with these advantages, stock options are still good options that companies should use as a compensation method. There are many disadvantages as well which have made them unattractive. They cause options overhang which leads to loss of the shareholding capacity of the shareholders. Such a case can easily lead to shareholders withdrawing their investments in the company. Stock options also have a lot of liability to the company. Many transactions should be fulfilled, and this adds to the accounting burden the company has to deal with. The solution to these challenges is to apply a plan that will resolve the problems we have seen with the stock options.
Compensation plans in a business organization have many advantages and not just the simple idea of benefiting the employees. The main purpose of incentive plans is to boost business growth. Different businesses apply different approaches to offer incentives to their employees. It all depends on the needs of the business organization.
The Earning per Share, EPS is a popular way of giving incentives to employees based on their performance. The high management of the business is given the role of setting the performance metrics. The Earning per Share will have an impact in attracting or pushing away investors into the business. With a good EPS, the stock value will be attractive and will likely spur growth in the business.
On the other side, EPS can be misused by the same management. It is possible to manipulate the Earning per Share since they are the same people who set it, to give a false impression of the company growth status.
Jeremy Goldstein is one reliable attorney on matters of workers compensation. Jeremy Goldstein is based in New York and has a law firm called Jeremy L. Goldstein& Associates. Through this form, he has offered legal counsel regarding worker compensation to many companies in the United States. Jeremy Goldstein has worked with companies such as Verizon and AT&T.
Jeremy Goldstein has sufficient legal education background to help corporations make the right decision regarding issues of governance and worker’s compensation. Jeremy Goldstein is recommending knockout barrier options as a solution to the worker’s compensation. Learn more: https://www.linkedin.com/in/jeremy-goldstein-26aa1b4