Economic value-added is forcing managers to focus on improving shareholder value (if they want to bring home the big bucks).
Last year Ford's shareholder value improved 57%. GM's stock hit its highest price in history. Lucky break thanks to a surging stock market? Not according to those who are forcing executives to earn their cost of capital. "Management is becoming more responsive to shareholders," says J. Michael Losh, GM executive vice president and chief financial officer.
The U.S. Big Three and some suppliers are adopting a variation of economic value-added, better known as EVA. Created by Stern Stewart, the accounting firm, EVA is simply after-tax profits minus the …
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