Managing with economic value added (EVA)‎

Abstract EN

Structuring acceptable compensation package for manager seeks to achieve the highest possible degree of concordance between shareholders and managers.

Linking compensations for managers with actual managers' performances should focus managers on actions that would result in increasing shareholder value and realization of organizational goals.

But in reality, the structure and amounts of the compensation packages often were not correlated with the level of managerial performances.

This study intended to identify why economic value added should be used as a performance management tool and incentive compensation system that can guide every decision a company makes, and that can transform a corporate culture which motivates all managers and employees to work cooperatively to achieve the very best performance possible.