Giving employees the right incentives can help a company retrain the best and the brightest personnel. However, these incentives can run afoul with the stockholders who may see these incentives as overwrought expenses. Now, a compensation expert and lawyer Jeremy Goldstein offers a workable idea on employee incentives that benefits not only the company but the employees and the stockholders as well.
So what is the big problem with employee incentives? Usually, these incentives are tied to a company’s Earnings Per Share (EPS). The problem is, CEOs can sometimes manipulate the EPS on an earnings report to make the company’s performance appear better than its reality. And that can hurt shareholders who ultimately pay for the employee incentives.
The big problem here is that companies can not simply do away with employee incentives. Doing that will drain off the best employees. And keeping employee incentives tied to EPS can also lead to a drain on shareholder value. Learn more: https://nycinquirer.com/2018/01/15/nyc-lawyer-jeremy-goldstein-recommends-compromise-for-employment-incentives/
Jeremy Goldstein offers a compromise that has been shown to work better for all parties involves. His idea is to not eliminate employee incentives but to modify it. This time, instead of tying employee incentives to short-term EPS, tie the incentives to long-term goals of the company.
The long-term strategy will allow companies to hold on to their CEO and best employees for a longer period of time since their incentives are tied to long-term performance. Also, long-term performance is harder for a CEO to manipulate upward than short-term EPS. Overall, Jeremy Goldstein’s long-term strategy is a smarter choice for the companies, the employees as well as the shareholders.
Jeremy Goldstein is a lawyer as well as a compensation expert. He has been working in the New York City area for decades. After working for a string of large legal firms, Mr. Goldstein established his own boutique law firm Jeremy L. Goldstein and Associates, LLC. Mr. Goldstein’s law firm specializes in employee compensation as well as corporate governance.
Jeremy Goldstein received a Bachelors of Art in Art History from Cornell University in 1995. Afterward, Mr. Goldstein received his Masters of Arts in Art History from the University of Chicago in 1996. A year later, Mr. Goldstein entered the New York University School of Law. He then graduated in 1999 and soon started practicing law afterward. Today, Jeremy Goldstein is considered the foremost expert in employee compensation.