With increasing pressure on firms to deliver shareholder
value, there has been a renewed emphasis on devising
measures of corporate financial performance and
incentive compensation plans that encourage managers to
increase shareholder wealth. One professedly recent
innovation in the field of internal and external
performance measurement is a trade-marked variant of
residual income known as economic value-added (EVA).
This paper attempts to provide a synoptic survey of
EVA’s conceptual underpinnings and the comparatively few
empirical analyses of value-added performance measures.
Special attention is given to the GAAPrelated accounting
adjustments involved in EVA-type calculations. pdf