EPS or employee per share has come in as a new system that corporates are beginning to implement as part of their incentive schemes. Companies all over the world are in a constant battle between their employees because of the demands that employees have, and the inability for a company to perform these demands.
It is but natural for an employee to want certain incentives for the effort that they have put into the company, especially, if they have been working there for a considerable amount of time. Employees want to feel like they are an important part of the company, and most corporates choose to take the route of providing incentives to them as a way to reward them for their efforts. But sometimes, the incentives that are being provided may not seem enough to the employee. Before EPS, companies had no definitive way to be able to determine the amount that would be regarded as appropriate for privileges to the employees, which is why it is now being implemented on such a large scale.
Jeremy Goldstein, a well known corporate lawyer from New York recently wrote an article about ESP and the effect that it can have on the company. He laid out the pros and cons that both the company and its employees would face upon the implementation of something like EPS and laid out the resolution that both parties can implement. Goldstein runs his own law firm called Jeremy Goldstein and Associates, which provides corporate legal solutions to companies all over the country.
In the article, he stated that coming to a compromise between the two parties is the only way for both sides to remain happy and get what they need. Often, the problem that companies face is when employees ask for incentives that are beyond what the company can give. This especially applies to companies that are new or smaller in size. EPS means that a company can give their employees the incentives that they want based on the number of shares owned by the public. The employees can also get a better idea of what to expect from the place that they are working in. The entire structure is better outlined and thought of, which is what has made this system so implementable.
However, Goldstein pointed out the flaw in the plan, which usually arises out of favoritism or resentment for the employees in the office. The people holding the power to hand out these incentives can do so for an employee that they favor, and hold back if they oppose them. There is no definitive time when an employee can receive an incentive, or what grounds they can ask for it on, which makes giving out these incentives completely left to the person in charge.