The Earnings per Share (EPS) incentive-based programs in corporations has its advantages and disadvantages as many claim that the program has no long-term merit for the growth of a company. Should we use the EPS performance-based programs? is the real question at hand and is the program hurting more people than doing good? Attorney at law, Jeremy Goldstein provides insight into how companies can manage the EPS program so that those who are both for and in opposition to the program can get along. Jeremy Goldstein has worked with large corporations such as Verizon, Goldman Sachs and Bank of America. To create a sustainable economic environment for corporations is highly critical and with the help of Jeremy Goldstein, sustainability over the long-term is definitely obtainable.
About Jeremy Goldstein
Jeremy Goldstein practices out of his own law firm in New York City, “Jeremy L. Goldstein and Associates, LLC”. He obtained the highest education in the legal profession, a Juris Doctorate degree, graduating from the New York School of Law. Mr. Goldstein is a top selection for legal counsel in the Legal 500 and the Chambers USA Guide to America’s Leading Lawyers for Business and his expertises has granted him the privileges to counsel and provide his opinions by writing for law journals on various legal matters.
EPS seems to be a positive incentive program for many parties. Definitely a great way to provide employees greater pay for greater levels of performances. Studies have revealed that EPS has contributed to many successes of a company as it is a huge factor in driving shareholders to buy or sell. However, due to the competitive players in the shareholding and trading world, many disadvantaged outcomes can and do result which can drastically effect many facets of a corporation.
Many concerning parties feel as though that EPS can be a passageway to dishonest business actions. Results can be skewed quite a bit in order to allocate profits to certain individuals versus a fair distribution as pertaining to the metrics at hand. This type of dishonest act can provide the corporation advantages in share sales. Definitely illegal and has been tried before.
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In addition, EPS is considered as short-term profitability that fails to support a corporates growth in the long run. Expert, Larry Fink, claims that the EPS program really hurts everyone, it goes nowhere, just really great for the life of high performances of the company, which realistically speaking, isn’t consistent day in and day out, month in and month out, year in and year out. He claims that sticking to long-term goals can allow corporations to find ways to strengthen their share values for sheer sustainability instead of the high risk factors of fluctuation through the EPS program.
Jeremy Goldstein recommends that there is a compromise between both sides of the coin to EPS. Since EPS does serve as a positive addition to a workplace and influences high performance, he suggests that EPS stays and that corporations hold CEOs and executives responsible for their pay per performance actions. To do so, making sure that incentive pay is in line with the long-term goals of the company is the key. This way, long term growth of a company is a focus and a way to measure share growth is provided.