EVA Challenge -- Implementing Economic Value Added Transformation Program

Author: (English) Stemn, translated by Zeng Rong and others
Publisher:
Publish Date: 2002-01-01
Features: Economic Value Added (EVA) – It is a measurement method for a company's true economic performance and a strategy to create shareholder wealth. It is also a method to transform the company's advantages and behaviors across the entire production line. Appropriately implemented, EVA will liberate corporate performance measurement from the whims of accounting conventions, align the interests of management with those of shareholders, and end the decades-long conflict of interest between the two. The EVA Challenge offers valuable insights not only to beginners in EVA but also to advanced practitioners. The real-world case studies illustrate how the practical application of shareholder value positioning can align the goals of various organizational levels, motivate management by linking compensation to EVA performance, and deliver additional value to shareholders. Fundamentally, an EVA program consists of three components: a measurement system, an incentive system, and a financial management system. For example, when measuring performance, the key element of EVA is to identify the cost of capital – the capital cost of the company, department, subsidiary, or product. It showcases to executives worldwide how to adapt EVA to their organizational needs and enhance the economic value they create.