00:00    |    
Initial credits
00:07    |    
How did the economic meltdown and the financial banking crisis happen?
Quotes  Fault Lines: How Hidden Fractures Still Threaten the World Economy, 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



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Economic Value Added (EVA)

18 de octubre de 2011   | Vistas: 37 |   Banking Crisis Economic Value Added (eva) Economy

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.




Joel M. Stern is the creator and developer of Economic Value Added (EVA), Chairman and CEO of Stern Stewart &…

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