Category Archives: The EVAluation

Stern Value Management in Vault’s Top 50 Consulting Firms: What’s Next?

Stern Value Management in Vault’s Top 50 Consulting Firms What’s Next
Just last month, Stern Value Management was recognized by Vault as one of the Top 50 management consulting firms for 2016. Though pleased with the outcome, SVM is already looking ahead to next year’s ranking. “While we recognize that we have made great strides over the past year, we won’t rest on our laurels,” says Martin Schwarz, Executive Vice President. “We’re already working on identifying how we will move up in the rankings next year.”

To achieve this goal, SVM’s Executive Committee designated a special project team to identify the firm’s top areas of improvement, and create an action plan for improving on those areas. The special project team has been working closely with the Executive Committee. As a result of the special project, the three key areas that SVM will focus on are formal training, innovation in the industry, and philanthropy.

Why pay ratio disclosure will create more problems than it will solve

Why pay ratio disclosure will create more problems than it will solve
Why will disclosing the ratio of CEO pay to the median pay of employees is pointless, costly and has the potential to backfire:
  • The ratio does not tell us whether a CEO has been successful at his/her job. The CEO’s contribution is measured by the value the CEO has provided to its shareholder. A CEO Pay/TSR ratio will make more sense
  • It will encourage companies to let go of lower paid employees and increase capital investments (at best) or increase outsourcing, potentially to foreign firms to improve the ratio. While under certain circumstances these moves may be seen as positive, they do not serve one of the main purposes of the rule which is to reduce inequality
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