Shareholders Evangelist

While addressing a select gathering of corporate executives in New Delhi, Joel Stern, managing partner, Stern Stewart, started off by saying that he would speak only enough to create positive EVA. Economic Value Added is a concept his company had conceived of in the early '80s. And now that the idea has finally taken corporate worlds fancy, Stern would never pass up an opportunity to sell the concept.

Today, investors the world over are saying that they will look seriously at only those companies that have implemented the EVA concept, he argued, with impeccable logic. If India wants to attract foreign capital, it better start looking at EVA seriously. Stern had certainly not been wasting his time and destroying his EVA quotient. During his short stay in the country, one Indian corporate house has already retained his management consultancy for implementing the idea.

A graduate in finance and economics with professional experience in banking, Stern is an authority on financial economics, corporate performance measurement and corporate valuation. He has been propagating his ideas about shareholder value quite actively, speaking to executive audiences at The Financial Times Executives Institute and The Planning Forum for years.

The stockily-built Americans tenacity finally paid off in the early 1990s. Megacorps like Coca Cola and General Electric acknowledged that the concept of EVA played a crucial role in their spectacular financial performance. From then on, Stern Stewart has been on the roll, having advised more than 300 clients till date.

The secret of his success? Recently, we recruited the topper from Carnegie Mellon University, recounts Stern. When I told him that he had got a 100 in my paper, the student shot back I would have been surprised if I had got less than that. With arrogance like that, I knew he would fit in.