Mar
29
2016

The SEC's Clawback Proposal: Our Recommendations from a Value Management Perspective

We have been following the developments in clawback policies in compensation very closely over the last several years. In this article we introduce the SEC’s latest proposal on clawbacks (Proposed Rule 10D-1) and provide recommendations to affected companies

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Mar
01
2016

Should My Firm Hedge?

In the first article of this two-part series on hedging, we discussed two best practices in hedging policy management. In this article – part two of the series – we ask a precursor question: should my firm be hedging? The answer to this question will vary by firm and will depend on the circumstances surrounding the decision to hedge.

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Dec
16
2015

Hedging Policy Management

In an economic environment with a strengthening dollar, a weakening euro and yen, and a steady anticipation of interest rate hikes in the US, the topic of currency hedges comes closer to the spotlight particularly for multinational firms with presence in the US, Europe, and/or Asia

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Sep
10
2015

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.

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Aug
25
2015

Vault Recognizes Stern Value Management as a Top 50 Consulting Firm

It’s been a busy year for Stern Value Management, and the hard work is paying off – we are recognized as a Top 50 firm in the 2016 Vault Consulting Firms ranking. We are also recognized as a Top 10 firm in key categories, which are highlighted below.

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Aug
13
2015

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...

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Mar
10
2015

Profit or Value: What Should We Share?

Ask a chief executive if value is important to him or her, and he or she will likely say yes. Ask if employees are important stakeholders in the enterprise, and the answer will almost certainly be yes.

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Feb
26
2015

Value Based Management - A Poison Pill Against Activist Investors

Activist investors have been lauded and criticized by many. The Economist magazine recently published a special report on these investors, dubbing them the saviors of capitalism.

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Feb
12
2015

Strategic Planning Done the Right Way

A common misconception is that “free market” proponents – and their most recognized advocate, Eugene Fama, Nobel Prize laureate – believe that stock markets are perfect.

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Feb
09
2015

The Problems with Traditional Planning

Most firms spend more time on negotiation than on strategy when it comes to setting targets. In these firms, planning is traditionally tied to the budgeting process, which in turn is linked to variable compensation: a unit negotiates a target with its corporate office and then its managers are paid the incentive if they meet the target.

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Jan
15
2015

Time to Cut Fuel Subsidies

Fuel subsidies are elitism dressed as populism. Thus, they are irresistible to politicians in developing countries.

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Dec
12
2014

2015 Economic Forecast

Last year my economic forecast for 2014 called for a rate of real economic growth of 4% for the U.S., much higher than the prevailing forecast at the time as well as the prevailing rate of economic growth that had existed in the years 2010-2013.

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Aug
18
2014

Indonesia in Southeast Asia: Moving Up the Value Chain

As Stern Value Management has done annually, this year we have looked at the wealth creation of the 100 largest Indonesian and 100 largest ASEAN (Association of Southeast Asian Nations) firms over the last 5 years. In order to measure wealth created by firms, we use the Wealth Added Index (WAI™)...

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Aug
16
2014

In Pursuit of Long-Term Sustainable Alpha

This article is an introduction to how companies can lay the foundation for long-term value creation. We will discuss three major steps they can take to achieve this goal.

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Jan
01
2014

2014 Economic Forecast

There are three rules in economics that need to be explained before an economic forecast can be justified.

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May
20
2013

EVA® and Operational Analysis

The objective of all corporations is to create value for shareholders. One way to achieve this is by improving a firm’s operations. Although the principle is straightforward, determining exactly what improvements should be carried out to increase or at least sustain the overall value of the firm remains a challenge for management.

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Apr
24
2013

Financial Policy: What is the Optimal Capital Structure and Why Does The Debt Level Vary Among Industries?

The objective of firm value maximization is at the heart of corporate financial theory. A company can create value through its operating, investment, and financing decisions.

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Mar
21
2013

Successful Entrepreneurs Manage Your Value

The current economic crisis that has engulfed most of the developed economies since 2008 has spurred much change around the world. It encouraged economists and management scholars to think differently about entrepreneurship.

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Feb
21
2013

Financial Performance and Leadership Change at Top Companies in G7 Countries

Over the past few years the global economy has been riding a roller coaster. The most recent financial crisis first started in the United States during the summer of 2007.

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Jan
21
2013

Performance Appraisal Versus Value-Driven Strategy: A Study of America's Oil and Gas Industry

In the oil and gas industry, performance appraisal and strategy are diametrically opposed. Key indicators highlighted in annual reports include return metrics like ROACE (return on average capital employed), or production metrics, such as cost per barrel and production barrels.

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