What exactly is “Earnings per Share,” and why has it garnered so much flak in recent days? EPS is a method of employee compensation based on a pay-per-performance model. It encourages employees to focus on company success and helps to bring up stock prices significantly. It has been proven to bring companies closer to success and is universally praised for its advantages. But in some cases, EPS can quickly become a disadvantage. Jeremy Goldstein offers insight into those cases, as well as suggestions on how to prevent them.
Can EPS be Fixed?
The advantages of EPS can’t be overstated when it’s used correctly, but sometimes, executives and CEOs can take advantage of EPS for their own benefit at the cost of the company. This possibility has earned it a lot of flak from critics. While manipulation of metrics and the misleading of shareholders is by no means commonplace, it’s still a very real possibility and has been abused before. On top of issues already present with EPS regarding stability and value fluctuation, this has made EPS increasingly unappealing. But that doesn’t mean that it can’t be salvaged, and, in many cases, it’s still of incredible benefit to the company.
So how can EPS be used without risking the company’s well-being? Jeremy Goldstein believes that the best way to do this is to hold the higher-ups accountable for abusing the system. When they can no longer safely use it to gain short-term cash for themselves, they will have to focus on long-term profitability and the continued success of the company. This encourages company growth, as well as a steady rise in the value of shares.
Based in New York at his boutique law firm, Jeremy L. Goldstein & Associates, LLC, Goldstein is an expert in compensation and business law. He has served a number of prestigious clients throughout the United States and is considered one of the country’s top lawyers by both the Legal 500 and the Chambers USA Guide to America’s Leading Lawyers for Business. His years of experience lend him the unique perspective necessary to solve the foremost problems in the world of business law.
In addition to his professional ventures, Goldstein has worked with a number of law journals such as the NYU Journal of Law and Business. His perspective on the most pressing legal issues of the modern day provides unrivaled insight into the world of business law. He has also donated significant sums to charities which are dedicated to the treatment of mental illness, foremost among them being Fountain House. Learn more: https://www.resumonk.com/Rf4O8IjkZGGkJ1jqlTIPqA