A New York-based lawyer recently highlighted the advantages and the disadvantages of earnings per share, or EPS. Jeremy Goldstein pointed out that some companies across the United States are now considering including EPS, or earnings per share, as a form of incentive given to their employees. According to the new rules and regulations for some companies, EPS will be provided to the employees, on top of their regular, monthly salaries. Companies are encouraging their employees to choose the EPS incentives because of how it will help the company as a whole. However, the companies are not emphasizing the good and the bad behind the EPS scheme. Jeremy Goldstein wrote a comprehensive article on the topic, where he explained in detail why the companies should and should not adopt the EPS platform as their incentive.
Writing for the EPS platform, Jeremy Goldstein highlighted that if the employees would accept the EPS as their incentive, it will help drive the company’s value. The company’s stock market value would rise, and more investors will start to put their money into the company because of the tremendous growth that it is experiencing. He also pointed out that EPS would make the employees more productive in their jobs, because of the reward waiting for them after performing the required tasks. He also said that employees would now become financially literate, and they would now consider saving and investing. The value of the shares that will be provided to the employees would also change over time, giving them a chance to diversify their investment and learn how to trade.
However, with all the advantages that the EPS platform has, there is also a disadvantage, according to Jeremy Goldstein. He stated that the EPS platform would only encourage favoritism inside the company. Critics of the EPS platform have also noted that the value of the shares given to the employees can also fall, giving them nothing but shares without any value.
Companies in the United States are now working together to find a permanent solution to the problems raised by the concerned groups, a solution which would be beneficial to everyone involved.
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