Many companies around the globe are confused whether they wanted to include EPS as a parameter in the employee incentives. A number of positives and negatives are causing widespread confusion in executives as well as shareholders whether to choose the option or not. Even compensation experts are divided to make a final judgment about including EPS metrics in employee incentives. This is where, Jeremy Goldstein, a New York-based compensation expert to CEOs and executives, provides various thoughts about EPS and his conclusion on choosing it is a performance parameter. He thinks that employee incentives based on EPS are a positive thing, in general.
While EPS is a major influencer in the stock market, it is also helpful for companies to give better pay hike to the employees. Jeremy Goldstein says that including EPS as part of the pay structure has helped many companies to be more efficient and successful. While including EPS in successful business strategy, the competitive nature of stocks and trading create some unfair advantages for entities. Jeremy Goldstein says that the critics of EPS generally point out the fact that it could create favoritism as well as blind eyes towards CEOs of various entities.
Also, the metrics allow the executives to manipulate it for their advantage, including skewing results. Such moves can mislead and even create noncompliance issues at the end. Some others say that such metrics are only ensuring short-term profitability and not creating any value in the long run. In this situation, Jeremy Goldstein advises company managements to consider a compromised approach towards EPS. He thinks EPS should be allowed by making executives and CEOs responsible for their strategies and actions. The pay per performance should be calculated against the long-term strategies and goals of the company. Such a system would ensure sustainable growth for the company with measured and continued share growth.
Jeremy Goldstein has nearly two decades of expertise in handling various compensation issues and served on the compensations committees of many company leaderships. He associated with a number of reputed companies including Bank of America, Goldman Sachs, and Verizon. Goldstein lectured and wrote extensively about executive pay, its structuring, and other important regulations.
Jeremy Goldstein began his career after completing his J.D. from the reputed New York University School of Law. His initial year was with Shearman & Sterling LLP and was practicing Law as an Associate. In 2001, he began collaborating with Wachtell, Lipton, Rosen & Katz as a Partner and handled executive compensation issues. In 2014, Goldstein established a boutique law form working on compensation issues named Jeremy L. Goldstein & Associates.
To learn more, visit http://jlgassociates.com/.