The use of stock options is one of the ways through which corporations have been compensating their workers. This method has been used for a long time by many organizations from all over the world. It has been a way of making the employees feel like they are part of the company. Once they feel that they own a stake in the company they are likely to perform well and consequently benefit the company.
Stock options have recently been losing their place in corporate compensation. It is no longer regarded as a method that could benefit the company. The dynamics have changed, and the economic environment is no longer the same as it was. Today, a business must deal with new problems which are changing almost on a daily basis. Depending also on the competition that is taking place in the business environment business organizations cannot afford to use a method that will put it behind competitors. Businesses must strive to remain innovative and come up with plans that will favor them.
Stock options have made it impossible for businesses to save adequately. The fact that stock options can affect the financial status of a company is good enough to push away business organizations.
Stock options also have another disadvantage. There is a lot of accounting transactions associated with stock options. Employees have been opting to have a higher salary than be compensated using stock options. It is easier and better to accept a bigger salary than to take a stock option that no one knows about the outcome. Learn more: https://www.americanconference.com/executive-compensation-836l17-nyc/speakers/jeremy-goldstein/
EPS as an incentive method
EPS is an effective way of offering incentives to employees according to Jeremy Goldstein. Its effectiveness, however, depends on the ability of the business organization to implement the program. A business which implements EPS effectively has more chances of being successful according to research. EPS increases the financial capability of a business to offer higher incentives to the employees. EPS attract shareholders to a company if properly implemented.
However, there are two sides to EPS as a compensation method. Those who oppose it claim that it gives too much power to the business executives to engage in acts of favoritism and other business vices. It is easier for CEOs to use illegal means to make the share value look impressive to investors so that they can buy stocks in their companies. There is, therefore, a risk that EPS can be used wrongly to create a false impression about the financial status a business.
About Jeremy Goldstein
Jeremy Goldstein is a lawyer in New York. He is also a corporate compensation adviser. He has worked with many organizations for the last 15 years trying to guide them on the best workers compensation programs they should implement.