We are Stern Value Management, the global advisory firm that introduced, developed and applied the value principles in Value-Based Management, applying them to operations, financial policy, strategy, and governance.
Stern Value Management (SVM) is a global management consulting firm and the world’s leading advisor on Value Management, Value Strategy, and Value Creation. We partner with leaders from private or family businesses, firms that are publicly traded on share markets, and government organizations to sustainably improve the value of their enterprises on their path to value maximization.
We partner with our clients to become the top value creation leaders in their industries by designing and implementing state-of-the-art Value Management practices, devising value maximizing strategies and business models, and converting our clients’ employees into successful partners in the creation of value.
Our people are our main competitive advantage and our most valuable asset. We are a broadly diverse team of trusted advisors united by a shared passion to add tangible and enduring value to our clients, their teams, and their organizations.
Our firm has worked with many of the largest corporations in a variety of industries. Founded in 1982, SVM is headquartered in New York.
Officially founded in November 1982, SVM takes its roots in the 1950’s, with the path-breaking work of Professor Merton H. Miller and Franco Modigliani on what determines value. Headquartered in New York, our firm was originally incorporated as Stern Stewart & Co. in 1982, but became Stern Value Management in 2013.
1958 and 1961 Professors Miller and Modigliani (also known as M&M) publish The Cost of Capital, Corporation Finance and the Theory of Investment in the American Economic Review. This seminal paper focuses on the determinants of value and demonstrates the conditions under which debt financing could create value and the role that dividend policy would play in maximizing a firm’s value.
1972 Joel Stern develops the Free Cash Flow (FCF) concept.
Stern Stewart & Co. (later Stern Value Management, SVM) is incorporated on November 1 with the purpose of applying major theories of modern finance to concrete business problems.
The SVM management team develops Economic Value Added (EVA®), a new model for maximizing the value created that can also be used to provide incentives at all levels of the firm. The simplicity and versatility of EVA turns the metric into an approach that can be used by chief executives to focus on value maximization at all levels of the firm.
The Coca-Cola Company implements the EVA Management System, including incentives under the guidance of its chief executive, Mr. Roberto Goizueta.
Briggs & Stratton implements the EVA Management System with a drill down to the shop floor under the guidance of its Chairman and CEO, Frederick Stratton, along with his Chief Legal Counsel, Mr. John Shiely. Mr. Shiely later co-authored the definitive book on EVA with Joel called, “The EVA Challenge,” published in 2001.
South African Breweries (now SABMiller), one of the giant firms of South Africa, implements the EVA Management System under the guidance of its chief executive, Mr. Meyer Kahn.
FORTUNE Magazine highlights SVM’s EVA and value-based principles in a cover story in the September 20 issue: “The Real Key to Creating Wealth”.
Singapore Technologies implements the EVA Management System as the first company in Asia to do so under the guidance of its chief executive, Madam Ho Ching. Later in the 1990s she became chief executive of Temasek, the sovereign fund of Singapore, and encourages the implementation of EVA in other state-owned enterprises, and other firms in the Temasek portfolio of investments, which were in countries closely neighboring Singapore.
United States Postal Service, losing $200 million a month, implements the SVM EVA Management System for performance measurement, screening capital expenditures, and providing incentives at all levels of the organization. More than 300,000 people are put onto the EVA program, and within 20 months all losses are eliminated.
Ambev implemented the EVA Management System in Brazil. This firm is now known as AB InBev, the largest beer company in the world.
The first firm in India implements the EVA Management System, Tata Consultancy Services, followed in 2002 by the Godrej Group, under the guidance of its chief executive, Mr. Adi Godrej.
The Chinese government launches its efforts to improve the governance of all of its state-owned enterprises by requiring them to measure and report EVA.
Stern Stewart & Co. becomes Stern Value Management (SVM).
Stern Value Management is nothing without its people. Our executives, consultants and administrative staff are our core asset, and we place great emphasis on hiring, nurturing, and retaining the best people. Here are short presentations of our key leaders.
Joel M. Stern
Chairman, Founder and Chief Executive Officer
Joel has been the Chairman and Chief Executive of Stern Value Management since its founding in 1982. Prior to that, Joel served as President of Chase Financial Policy, the financial advisory arm of Chase Manhattan Bank. He joined Chase after completing his graduate studies in economics and finance at the University of Chicago.
Joel has been a pioneer and leading advocate of the concept of managing for shareholder value. He has written several books including The EVA Challenge and has published more than 150 articles and papers in financial economics. Joel currently teaches at eight graduate schools of business including Columbia University, the University of Chicago, the University of Cape Town, Universidad Francisco Marroquín (UFM), and Singapore Management University.
Erik Stern is President of Stern Value Management and Vice Chairman of Stern Solutions Capital Partners. He has advised numerous organizations on their implementation of EVA. Erik co-authored the EVAluation report on cascading EVA to shop-floor employees, The Capitalist Manifesto, and has written for many publications, including the Financial Times. A global value ranking based on his pioneering metric, the Wealth Added Index™ (WAI™), was highlighted in The Economist (December 1, 2001). His book, The Value Mindset, was published in March 2004.
Erik holds an MBA from the University of Chicago and a BA Hons from Brown University.
Executive Vice President
Martin has assisted American, European, African, and Asian companies in energy, real estate, retail, manufacturing, agriculture, media, and service industries to maximize shareholder value.
Martin has provided executive training to several companies and institutions around the globe on management best practices and finance and has been invited to lecture on these topics at Singapore Management University (Singapore), Ateneo Graduate School of Business (Philippines), ESSEC University (France-Singapore), and Skolkovo Business School (Russia).
He has written and developed research reports published in Forbes magazine (USA); SWA magazine, Jakarta Globe and Globe Asia (Indonesia); Business Times and The Edge (Singapore); Business Mirror (Philippines); The Star (Malaysia); and Business Management Review (China).
Martin holds an MBA from Old Dominion University.