When Using EPS in Incentive Plans, Take Time to Specify How It’s Calculated

Reprinted from NACD Directorship March/April 2019 Issue

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Given its strong alignment with shareholder value creation, earnings per share (EPS) is a common performance metric selected for short-term incentive and long-term incentive plans. A company’s generally accepted accounting principles (GAAP)-based EPS is equal to its after-tax net income…