Attorney at law Jeremy Goldstein has written about how to create sustainable compensation packages at companies. He says there is a constant battle between adequately compensating good employees and keeping long-term investor happy with good dividends and growth in their stocks. He has worked with many huge corporations on issues such as this including Bank of America, Goldman Sachs, and Verizon. His advice gets into issues such as the correct way to use Earnings per Share (EPS) as an incentive-based compensation program. He says that there are debates over using this program as a way to pay for performance, though.
Jeremy Goldstein wrote that in general paying people with EPS is pretty positive. For one, shareholders use EPS as one of the biggest reasons to buy or sell a company’s stock. Another positive for the general economy is that it encourages companies to pay more to each employee when they utilize EPS. He points to studies that show that when EPS is included as a part of an employees compensation package those companies do better financially.
Among the negatives, he wrote, is that when a company uses EPS is can create a problem if favoritism develops. It also can lead to people having a blind eye when it comes to companies chief executive officers. They also believe that using EPS can lead to far too much control is given to executives in regards to whether the metrics are being met or not for employees to benefit from EPS. Other critics say it leads to a short-term profitability mindset at companies versus looking at long-term success. Jeremy Goldstein says that there is a comprise. He said companies can continue to use EPS but also devise ways to hold executive responsible for their decisions.
Jeremy Goldstein started out his career as an attorney at law at Shearman & Sterling LLP. A year later he joined one of the biggest law firms in New York, Wachtell, Lipton, Rosen & Katz. He made partner at this law firm and stayed with it for 14 years.
In June 204 he founded Jeremy L. Goldstein & Associates, LLC. Jeremey Goldstein offers his legal advice when it comes to compensation, especially in regards to executive compensation. His advice is most often sought when one company has purchased another. This can lead to thorny issues in regards to executive compensation that only a keen legal mind can detangle.