Earnings per Share is one of the most important aspects in the valuation of a company’s stocks. Utilizing it has been proven to move companies toward success, and encourage employees to work toward the company’s success. So why has it recently begun to garner so much flak? With such clear advantages, it’s a wonder why EPS has begun to fall out of favor. However, there are reasons for this, which Jeremy Goldstein has provided an explanation for, as well as a proposed solution.
What’s Wrong With EPS?
At first glance, EPS seems foolproof. The advantages are clear, and the effect on stock prices can be profoundly encouraging. But throwing caution to the wind is ill-advised, and this is no exception. So, what’s the big problem with EPS? The answer is manipulation. CEOs and executives sometimes manipulate EPS metrics in order to cause a spike in share valuation, sell more stocks, and make quick cash. However, this manipulation is often illegal, and in the end, only hurts the company.
But EPS isn’t unsalvagable either. While it is prone to manipulation, it can still be fixed, and Jeremy Goldstein thinks he’s found the answer. According to him, the solution is to find a way of holding these executives and CEOs responsible for manipulation. With the threat of consequences, they would be less prone to the shady tactic and would be forced to focus on long-term success and stable profits for the company. This would not only benefit the company, and provide steady growth to share values, but it would also benefit the executives and CEOs. It’s a clear win for everyone.
About Jeremy Goldstein
Jeremy Goldstein is a business lawyer working for Jeremy L. Goldstein & Associates, LLC, a boutique law firm which specializes in compensation. His list of clients is long and filled with prestigious companies such as Bank of America and Verizon. He is widely claimed to be one of the best lawyers in America, and his positions in the Chambers USA Guide to America’s Leading Lawyers for Business and the Legal 500 provide strong backing to that claim. If anyone is qualified to fix EPS, it’s Goldstein. Learn more: https://www.linkedin.com/in/jeremy-goldstein-26aa1b4
But Goldstein does more than simply work on cases and provide legal counsel, he also contributes heavily to a wide array of law journals, providing his insight into pressing legal issues. Foremost upon these journals is the NYU Journal of Law and Business. His philanthropic ventures are also widely known, including significant donations to Fountain House, an organization which aims to help those with mental illnesses.