2019 Proxy Season and the Return of EVA

Dear Friend,

As we approach proxy season, Marc Hodak, partner, Farient Advisors, says boards and management may consider paying closer attention to a new development in corporate performance measurement: the return of economic value added (EVA).

As Hodak points out, EVA was a hot measure in the 1990s favored by companies, investors and analysts who sought to track how much value firms were creating from one period to the next.

Now used by fewer than 10% of companies, EVA could be poised to make a comeback due to last year’s purchase of EVA Dimensions by Institutional Shareholders Services (ISS), one of the biggest proxy firms, and ISS’ subsequent announcement last November that it will be featuring EVA in its Financial Performance methodology.

The gap between boards’ and management’s lack of awareness of EVA and its looming reemergence as an important financial measure may require a more proactive strategy for refreshing knowledge of the metric. Hodak evaluates how EVA may impact proxy evaluations and votes this season and beyond and offers three steps companies can take to prepare for what’s ahead.

To learn more about EVA and how your company should prepare for its return to relevance, download Mark Hodak’s analysis, click below.

Sincerely,
Farient Advisors LLC