The financial sustainability depends upon many factors, and addressing them all is quite difficult. Attorney Jeremy Goldstein, who practices law in New York, has seen the conclusions of such situations that often become a battlefield where both business financiers and employees’ incentives do not win.
Goldstein has worked with many prominent companies like Bank of America, Goldman Sachs, and Verizon, he offers advice on how Earnings per Share or EPS should be handled, including other incentive base programs. He likewise presents insight over the discussion on the correct use of pay programs that are performance-based.
In general, EPS is positive depending on how they are managed. And as for the investors, EPS is one of the prominent influencing factors that affect the stock price. This is what motivates shareholders to sell or buy, and at the same time, it provides companies to increase the amount of incentives they give their employees. Current studies show that the inclusion of EPS in the overall pay structure within a corporation makes it more profitable.
Initially, the Earnings per Share may look to be a beneficial system that can be integrated into a business scheme. But taking into consideration the competitive characteristics of trading and shares at times permit companies to influence the EPS turning it into a biased advantage.
Those against the EPS rationalized that using the EPS within a company could lead CEOs turning blind eyes and favoritism within the organization. They pre-suppose that instead of being able to have collective control CEO’s and executives are given a lot of authority on whether the metrics are being met or not in relation to EPS that may affect results that are accurate. To expound – this could lead to executive bosses tipping the results of the metrics to inflate share sales which would affect shareholders. And this is not only misleading but likewise illegal.
Other non-EPS believers stressed that said metrics are only for short-term gains, which means that EPS does not provide justifiable revenues to reinforce the company’s growth in terms of expansion and the reinvestment of profits for the long-term. Moreover, performance-based pay packages are known to be volatile and unpredictable. Experts advise that investments must be focused on long-term and not the short term to give organizations time to reinforce the value of their shares.
Jeremy Goldstein practices law in New York City for a couple of years. He started his career by working with large firms then creating his own practice. Aside from working with several big companies or their cases, Goldstein also worked with numerous companies engaged in stocks, oil and petroleum, banks and cellular telecommunications.
Goldstein is listed for top selection in legal matters in the Chambers USA Guide to America’s Leading Lawyers and Legal 500. Learn more: https://www.slideshare.net/JeremyGoldstein14/