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Jeremy Goldstein has been a business lawyer for more than 15 years. After serving as a partner in a business law firm, he founded his own boutique law firm called Jeremy L. Goldstein and Associates LLC. The business lawyer from New York has plenty of experience advising some of the largest companies in the world on employee benefits packages. He has recently given some free advice to companies looking to keep shareholders happy.

Jeremy Goldstein’s advice is this — bet on your employees. Do this by offering stock options as a form of compensation in lieu of income or other benefits. This gets the employee invested in the company’s future and you will see a rise in employee productivity.

But Jeremy Goldstein warns against some drawbacks of this form of compensation. Shareholders do not like something called a hangover. When the value of a company drops below a specific point, employees with stock options tend to try to cash out. The company does not have enough value to pay the employees and this creates a hangover.

But there is a form of stock option compensation that can eliminate the hangover altogether while boosting employee productivity even higher. A knockout stock option knocks an employee out of his or her stock option compensation if the company’s value drops below a specific point for a specific period of time. Jeremy Goldstein recommends this period of time be one week.

Now the employee is motivated in two ways and on both sides. The employee still wants to see the company succeed so that they make the most amount of money possible. But the employee is also motivated to keep the company’s value above a certain threshold to keep the stock options as a form of compensation. This dual motivation will keep the company healthier.

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