Including Earnings per Share as a metric in the performance parameter of companies is a long-discussed topic among the executives, compensation committees, and management. The varied benefits and some major flaws of EPS are making people doubt about the effectiveness of the metric. This is where the expert opinion on Jeremy Goldstein, a compensation structuring expert with a few decades of experience, is highly valued and welcomed. He confirmed that including EPS in the compensation structuring could be treated as a positive thing. Goldstein identified that the metric became one of the biggest influencers in the stock market in deciding the price of the stock.
It helps the shareholders to buy or sell the stocks for a better deal and provides a holistic view on the performance of it. At the same time, the employees and executives of companies also get chances of competitive pay based on EPS. A recent study confirmed that including EPS in the pay structure helped many companies to be significantly successful. However, Jeremy Goldstein also revealed some of the concerns of the critics of EPS. According to them, the competitive nature of trades and stocks gives management to make unfair advantage using EPS as a metric. It has the capacity to cause favoritism and blind following behind the CEOs of firms.
Importantly, the metric gives significant powers to the executives rather than a collective control. These additional powers help the executives to skew results for the benefits of themselves, which is purely detrimental to the interests of shareholders. Goldstein said that it would create the downfall of share value and lead to regulatory issues in extreme cases. Another set of people think that it is not focusing on the long-term growth of the firm and focuses only on short-term profitability. Jeremy Goldstein took a compromised stand on EPS and asked the compensation committees to include EPS as a metric. Further, the executives should be held responsible for their executive actions, and the pay per performance options should be targeting long-term goals of the business. Learn more: http://clsbluesky.law.columbia.edu/author/jeremy-l-goldstein/
Jeremy Goldstein is also an attorney based in New York City with excellent exposure to compensation and corporate matters. He is the founder of Jeremy L. Goldstein and Associates, a law firm focusing on solutions including compensation, corporate affairs, compliance issues, and more. Goldstein collaborated with numerous companies from different sectors including oil companies, banking firms, cellular service providers, stockholder companies, and more.
Jeremy Goldstein is also associated with many major corporate mergers and acquisitions. Some of his clients include United Technologies, Sanofi-Aventis, Duke Energy, Goldman Sachs, The Dow Chemical Company, Verizon Wireless, SBC Communications Inc., Bank of America Corporation, and more. Goldstein earned his graduation in Law from School of Law – New York University.