When considering employee incentives, Earnings per Share often comes up. Generally, EPS has a positive effect on companies, influencing stock price greatly, and providing strong incentives to focus on employee benefits and pay-per-performance. However, the model isn’t without its downsides, and critics of EPS can be quick to disparage it. Jeremy Goldstein offers his unique perspective on EPS, as well as his solutions for commonly presented issues with EPS and earnings-per-share.
EPS Isn’t Without its Disadvantages
Those critical of EPS are often quick to point out its disadvantages. They often cite the fact that, while nominally, EPS would provide collective control, in reality, it gives the CEO and executives of a company a significant amount of control over metrics and their results, allowing them to skew those results to their own advantage. This allows those executives to use those metrics to mislead shareholders and drive short-term share sales. This provides an unsustainable method of gaining short-term profits, as well as compounding with the inherent instability and unreliability of EPS.
Fortunately, these issues aren’t without solutions, and Jeremy Goldstein has formulated a solution that allows companies to keep pay-per-performance, as well as maintaining stability, and focusing on the company’s long-term success. His proposal is to hold the higher-ups of a company, the CEOs and executives, responsible for destructive or manipulative actions. This would ensure that pay-per-performance metrics are aligned with the long-term goals of the company, and would provide the opportunity for sustained growth of both the company itself, as well as shares.
Who is Jeremy Goldstein?
Jeremy Goldstein is an exceptionally experienced business lawyer based in New York. He began his career with a large law firm, but, eventually, he founded his own practice. He is highly esteemed within the field of business law and finance. His rankings in the Chambers USA Guide to America’s Leading Lawyers for Business and the Legal 500 place him among the nation’s top lawyers.
On top of his work in law, he has also contributed heavily to numerous law journals. He provides his unique insights and provides comprehensive advice on modern legal issues. Among the journals he has contributed to is the prestigious NYU Journal of Law and Business. Moreover, he is part of the Business Section of the American Bar Association. In addition to his business ventures, Goldstein often contributes to Fountain House, a charitable organization dedicated to aiding those with mental illnesses.
Learn more: https://www.crunchbase.com/person/jeremy-goldstein#/entity