Compensation systems centered around pay per performance methods have recently begun to fall out of favor due to concerns about stability, and fears of metric manipulation. The merit of Earnings Per Share has also come under fire. However, Jeremy Goldstein believes that there is a solution. His unique perspective offers insight into the world of business finances and proposes a deceptively simple solution to stabilize EPS-based compensation and raise stock prices.
Can EPS Be Saved?
Critics of EPS have cited a number of concerns, including instability and an almost complete lack of reliability. While the system is excellent when used effectively, driving up stock prices and making employees more productive, there are loopholes which allow greedy executives to capitalize on the system, making short-term gains, and harming the company in the process. These gains are achieved via metric manipulation that leaves the company cleaning up the mess after share prices have been driven up by false data. The benefits of EPS are also significant, and the system is proven to bring success to a business and bring up stock prices naturally. But the stigma associated with the possible exploitation has left a sour taste in many mouths.
Is there a way to make EPS work? Jeremy Goldstein seems to think so, and he’s offered a solution. His solution is quite simple, although likely hard to implement if the CEO and executives aren’t willing to make compromises. The solution involves holding the executives and CEO responsible for metric manipulation and other destructive actions, which would encourage them to, instead of looking for short-term cash grabs, look for long-term solutions to benefit the company as well as themselves. The solution would encourage corporate growth, while still providing stability and the other benefits of EPS.
Jeremy Goldstein, J.D.
One of the top business lawyers in the country, Jeremy Goldstein is incredibly accomplished and has had a long and successful career working with giants such as Goldman Sachs, Bank of America, and Verizon. He earned his J.D. in New York, at the School of Law under New York University. He currently works as a partner at Jeremy L. Goldstein and Associates, LLC.
In addition to direct legal work, he provides counsel to a number of aspiring lawyers and businessmen via the NYU Journal of Law, where he is a member of their professional advisory board, as well as a contributor. Additionally, he contributes large sums to Fountain House, which is dedicated to aiding people in their struggles against mental illness.
To learn more, visit http://jlgassociates.com/.