When it comes to management and CEO compensation programs, most companies are confused to include EPS as a metric in deciding the performance of their executives and pay structure. Though it is generally accepted EPS as a useful and effective system in deciding the pay structure, there are some factors make it an unfair advantage for the executives. That is none other than the trading nature and competitive character of shares. While people are skeptical about including the metric, Jeremy Goldstein, a prominent executive compensation expert, provides further information about EPS.
He says that many critics think the option can lead to blind eyes towards CEOs and create a high level of favoritism. The people also think that it offers significant power to CEOs and company executives and even helping them to alter the results. Jeremy Goldstein confirms that such moves are detrimental to the shareholder’s interests and cause misleading, sometimes it becomes illegal as well. Other critics of EPS option say that such types of metrics can only produce short-term profitability and not benefit the company in sustainable growth and long run. Some people even dare to say that such types of compensation structuring could hurt everyone from executives to companies.
This is where Jeremy Goldstein advises a neutralized stand between people who are opposing and supporting EPS. He says that instead of taking away the pay per performance, it should be redesigned to make the executives and CEOs more responsible for their steps and strategies. Goldstein adds that these pay per performance should be focusing on the long-term goals and visions of the company. If such a strategy adopted, it can ensure sustainable and consistent growth in the long-run for the company which can also create scalable, repeatable, and more accurate share growth.
Jeremy Goldstein is a New York-based expert with more than two decades of exposure in handling complex compensation issues pertaining to company leadership and management. He worked on the compensation committees of numerous companies, including Verizon, Goldman Sachs, Bank of America, and more.
In order to offer expert compensation structuring services, he established Jeremy L. Goldstein & Associates in the year 2014. It is a boutique law firm with services in expert compensation committee advisory, pay structure, and more. The company under the leadership of Jeremy Goldstein also offers advises and assistance on corporate governance matters that are pertaining to various situations with respect to sensitive matters and transformative corporate events.
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