Jeremy Goldstein, partner at Jeremy L. Goldstein & Associates, has been around the corporate scene for years now. He has worked with established companies such as Bank of America, Verizon and Goldman Sachs to know how most company strategies play out. Recently, many companies have turned to Earn per share as an incentive based program to increase their company production. From his years of experience representing companies in legal action, Jeremy Goldstein gives his opinion and says that this may not be the best way to go. He says that Earn Per Share, EPS, mostly end up in a battle in which employee incentives and long term investment for the corporation stand to lose.
EPS is an incentive based program where a portion of a company’s profit is set aside to be given to each outstanding share. This makes this method be very attractive in the stock market because the higher the EPS, the more an investor stands to gain. This is what makes investors either buy stock or sell. Most companies try as much as possible to make their EPS attractive to stock buyers in hopes to raise more money. For the employees, it means more money given to them in terms of incentives. At first glance, the attorney says, it’s all so good. However, there are down sides to EPS.
The first disadvantage that comes with EPS is that it does not have the element of collective control of the company. As a result, the executive and the board of directors get excessive power. This can be harmful to the investors. Secondly, this investment program is focused on the short term goals of the company which is to make profit. This is done at the expense of the long term goals of the company. As a result, it does not offer a sustainable economic environment for the company.
Jeremy Goldstein advises that since EPS is a good program, despite its down sides, it is important to exercise it in moderation. Keep the executives in check and make sure the long term goals are still taken care of. This will see the company culture a stable economic environment for itself.
Jeremy Goldstein is a lawyer practicing in New York. He started out his career in one of New York’s largest firms, Wachtell, Lipton, Rosen & Katz. Through hard work and a desire to better what he is good at, he quickly became a partner at this same firm. After making a name for himself, he branched out to create his own firm, Jeremy L. Goldstein & Associates. Jeremy has been part of transactions like Duke Energy/Progress Energy, and Merck/Schering Plough Corporation. His success in this field has granted him respect among his peers.
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