Harvard Business Review

APRIL 5, 2017

If a company has beat or missed its EPS targets by less than two cents , that means the company has nipped and tucked its quarterly results just enough to meet the target EPS number it committed to analysts. Of these, the last indicator is perhaps the most likely to accurately capture a company’s short-termism.

EPS 8

EPS Metrics Depreciation Short-term 8

Harvard Business Review

MAY 6, 2016

The board chose earnings per share (among other financial metrics) to measure and reward executives for long-term performance. One milestone might include completion of prototype-level next-generation digital products. A subsequent milestone might be delivering $10 billion in sales of the new product or service.

Long-term 8

Long-term Incentives Short-term Management 8

Harvard Business Review

FEBRUARY 7, 2017

After all, “short-termism” does not correspond to any single quantifiable metric. Earnings-per-share (EPS) growth: Difference between EPS growth and true earnings growth. Quarterly targeting: Incidence of beating or missing EPS targets by less than two cents.

Long-term 8

Long-term EPS Short-term Management 8

Harvard Business Review

FEBRUARY 24, 2017

Great stories are credible, simple, consistent, and use both financial and nonfinancial metrics to link a long-term vision and firm values with a distinctive business strategy and focused operational priorities. Bertolini observed that many of his peers had been promising 15% earnings per share (EPS), even during the financial crisis of 2009.

CEO 9

CEO Short-term Long-term EPS 9

Harvard Business Review

MARCH 17, 2011

Then I'd spend the day putting together a fix plan for fixing an issue with a product shipment or the General Motors account. Words like "productivity," "efficiency," and "innovation" are defined by goal posts of our own creation: number of units shipped, revenue and profit, EPS and shareholder return. Apple is now about desire.

EPS 15

EPS Strategy Reference Execution 15