The economic environment of a business has a significant effect on its success or failure. There are different measures that companies can take to create a sustainable economic environment. These measures constitute a variety of factors that need to be implemented. Coming up with a perfect incentives for employees is not easy. Jeremy Goldstein, an attorney-at law in New York City, has had real-life expertise dealing with creating a sustainable economic environment within an organization. Goldstein has worked with large organizations such as the Bank of America, Goldman Sachs, and Verizon where his input was on acquisitions, compensation, governance, management and sensitive issues. Learn more: http://officialjeremygoldstein.com/philanthropy/
Earnings Per Share is a determinant of the stock prices of a corporation. As it determines the stock prices, shareholders can buy more stocks or sell based on EPS. Employees’ incentives can also be calculated using EPS. Research studies conducted within corporations show that including EPS in the compensation scheme has increased success in most companies. When used as a determinant of stock prices, companies can use EPS to have an unfair advantage over other companies in the same industry.
Professionals against the use of EPS are concerned that it can lead to misuse of power within an organization to determine the price of stock prices. Executives can skew results to increase the confidence of shareholders and investors to drive share sales. Such acts are misleading and can lead to companies being sued. A group of professionals also argue that the results of EPS have no real long-term value in the company. They can increase short-term profitability within the company but not long-term gain. According to Larry Fink, short-term results such as EPS could have long-term adverse effects on a company. The company can, however, choose to focus on long-term financial goals to strengthen the prices of shares.
Jeremy Goldstein advises that companies should reach a compromise between both EPS and other long-term goals. Pay per performance is a great motivator for employees. It is then unadvisable to get rid of such a scheme. Goldstein recommends that companies should hold executives responsible for results released on share prices.
Jeremy Goldstein is an attorney based in New York City. He is a graduate of New York University School of Law where after he worked for large corporations but moved on to create his practice, Jeremy L. Goldstein and Associates LLC. He is among the top attorneys listed in the Chambers USA Guide to America’s Leading Lawyers for Business and Legal 500. He is the chairman of the Mergers and Acquisitions Committee of the Executive Compensation Committee and a member of the American Bar Association Business Section. He is also a contributor to the New York University Journal of Law and Business. Jeremy Goldstein is among the directors at Fountain House which is a company that is focused on helping mentally ill individuals.