Exequity Discusses Economic Voodoo and ISS’ Use of Economic Value Added

Institutional Shareholder Services (ISS) recently introduced Economic Value Added (EVA) as its latest approach to measuring company performance. Recent white papers from ISS, authored by Bennett Stewart (ISS Senior Advisor), who, along with former business partner Joel Stern, developed the general EVA framework roughly 40 years ago, implicitly suggest that EVA is the solution to identifying companies creating value and therefore, the superior method for assessing pay for performance. As ISS states:[1]

“EVA is an established standard in measuring, analyzing, projecting, valuing, and discounting a firm’s underlying economic profit rather than its accounting profit. With coverage of 16,500+ public Read more