Transcript
  • 00:00    |    
    Initial credits
  • 00:07    |    
    How did the economic meltdown and the financial banking crisis happen?
  • Quotes n , Raghuram G. Rajam
  • 02:25    |    
    Appreciation of how markets work
  • 04:42    |    
    Design of incentive compensation
  • 05:35    |    
    Community Reinvestment Act
  • 06:47    |    
    Income inequality
  • 08:08    |    
    Bank loans
  • 09:03    |    
    How banks designed their incentives
  • Incentives done wrong
  • 09:56    |    
    First diagram
    • Risk, rewards, and government stock
    • High fixed cost companies
    • Cost of equity capital
  • 14:06    |    
    Second diagram
    • Political and other issues existing at the same time
    • Investment and return on investment
    • Category number one
    • Category number two
    • Category number three
  • 18:37    |    
    What is the firm's objective function? What should management try to do?
    • Exhausting category one projects
    • Cash flow leftover
  • 25:35    |    
    Investing in category one projects
  • 26:44    |    
    Why do share prices go up?
    • Priced securities and riskiness of shares
    • New investors into the marketplace
    • Borrowing rate
  • 30:52    |    
    Calculation of bottom line profit
  • Quotes Richard Fault
  • 33:15    |    
    Questionable government policies
  • 33:38    |    
    Non-recourse lending loans
  • 35:15    |    
    What can banks do to keep their earnings growing?
  • Increase debt-to-equity ratio
  • 38:45    |    
    Positive economic value added (EVA)
  • 39:25    |    
    Behaviours resulting of EVA
    • Grow the business and category one
    • Increase EVA by improving Reserve Officer's Training Corps (ROTC)
    • Harvest losses
  • 42:39    |    
    Maximizing the value of the firm
  • 43:39    |    
    Case illustration
    • Implementing EVA in South Africa
    • Training people on EVA
    • Why is the competition winning?
    • Solution
    • Nobody is unimportant
    • Courage
  • 57:04    |    
    Experience at Chase Manhattan Bank
    • Offering advice on incentives
    • Budget and bonus
    • Deferring income
  • 01:02:40    |    
    EVA program
    • Four properties
      • Simple
      • Significant payments
      • Definitive
    • Implementing the program at Clicks
    • Being part of the EVA program
    • EVA culture
    • Does the EVA program always tend to produce?
    • As an entrepreneur, how do you apply EVA?
    • How does EVA help you decide what the distribution should look like between fix and variable?
    • Proposal to UFM
    • Objectivity
    • Four conditions
      • Improvements in EVA
      • No caps
      • Bonus bank
      • Collaboration
  • 01:23:41    |    
    Theory and policy of modern finance
    • Agency theory
    • How will management will stop doing bad?
  • 01:27:03    |    
    Question and answer period
    • Did you read the incentive plans that worked for Ben Stewart?
    • How can we put EVA in today's money so the management can encourage future spend?
    • How do you calculate the economic value of investments you make today that may or may not pay off for a long time to come?
    • Big determinant of future EVA
    • Do interest rates go down when commodity prices go up?
    • Do you think that prices will change if the gold situation bursts?
    • HSBC Bank
    • Citibank
  • 01:38:49    |    
    Final words
  • 01:39:08    |    
    Final credits


Economic Value Added (EVA)

New Media  | 18 de octubre de 2011  | Vistas: 98

Joel M. Stern elaborates on the causes of the economic meltdown and financial banking crisis, occurring nowadays. He shows, through different diagrams, how banks have designed their incentives and why most of them have failed. Stern explains what the economic value added program, EVA, is and encourages its implementation in all kinds of companies, in order to successfully maximize their value, as he describes the possible behaviors resulting from its application by using several cases to illustrate it. He answers many inquiries on the subject and details the properties and conditions needed to apply EVA, such as simplicity, significance, definitiveness, objectivity, among others.




Conferencista

Joel M. Stern is the creator and developer of Economic Value…

IDEAS DE LA LIBERTAD

Nuestra misión es la enseñanza y difusión de los principios éticos, jurídicos y económicos de una sociedad de personas libres y responsables.

Universidad Francisco Marroquín