What is Economic Value Added (EVA)? (Cont.)

• An estimator for company’s true economic value creation, unlike the traditional measures has focus on shareholder value creation
• A good basis for management compensation systems to motivate managers to create shareholder value
• A tool more useful than rate of return (ROI) in controlling and steering day-to-day operations
• A concept practically the same as Economic Profit (EP), Residual Income (RI) and Economic Value Management (EVM)
• A registered trademark owned by Stern Stewart & Co. supporting more than 250 large companies around the world