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Creating Real Wealth: CEOs at the top of CE's fourth MVA ranking inspire employees, please customers, and manage to make money for shareholders even in tough times - Performance Measurement - Market Value Added

Chief Executive, The, Dec, 2001 by Gregory J. Millman

TERMS EXPLAINED: The change in a company's MVA from the start date of the CEO to September 2001 is the Delta MVA. The change in a company's MVA expressed as a percentage of the capital that a company had on the CEO'S start date is the Delta MVA/Beginning Capital. This calculation standardizes MVA according to the amount of invested capital a CEO had to work with at the beginning of his tenure, and greatly improves comparisons between companies of radically different sizes.

In effect, it is a measure of the efficiency with which a CEO has used the capital at his or her command.


 

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