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©2013 Shareholder Value Advisors, Inc

   
 
IN THE NEWS

SVA in HBR

In 'Why Executive Pay Is Failing’ in the Harvard Business Review, SVA President Steve O’Byrne and INSEAD Professor David Young show that,on average, a 1% increase in company value increases top management wealth by only 0.43%. Almost all of this incentive comes from stock and options holdings. The present value of expected future compensation, which accounts for 75% of executive wealth, provides little incentive to increase shareholder value.  The reason is ‘competitive pay’ policies that make target pay independent of shareholder return, but highly sensitive to revenue size.

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SVA in The Crystal Report

Bud Crystal writes that "Steve O'Byrne is performing important research that should get compensation committees and compensation directors 'doing pay-for-performance', instead of just talking about it in airy terms".

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SVA in Fortune

Steve O'Byrne explains how to increase pay for performance in a Fortune Magazine article...

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View Steve O'Byrne page on Social Science Research Network

Steve O'Byrne on Linkedin


Click to read a review SVA President Steve       O'Byrne co-authored the book on
practical VBM implementation..
   
 
RESEARCH/TOOLS 

Achieving Pay for Performance

In a Conference Board Director Note, Steve O’Byrne shows how to use historical pay data to measure the three basic dimensions of pay for performance: pay leverage to relative TSR, pay alignment with relative TSR and pay premium at industry average performance. He shows that the leverage and alignment of top management pay has changed little since the mid-1990's. He also shows that a simple pay plan with annual grants of performance shares will provide perfet pay for performance if two conditions are met.

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What Investors Need to Know about Executive Pay

In a Journal of Investing article on "What Investors Need to Know about Executive Pay" Steve O'Byrne and David Young show how investors can calculate comprehensive measures of top management's incentive to increase shareholder value and its incentive for value-less revenue growth. They explain the flaws of the conventional approach to executive pay and present their research on the impact of top management "wealth leverage" on company performance.

Listen to O’Byrne’s 5 minute video summary on the Journal of Investing website (click tab #2 on the lower right of the video panel in the center of the Journal’s web page).

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The Impact of Top Management Incentives on Corporate Performance

In a Journal of Applied Corporate Finance article, Steve O’Byrne and David Young explain the concept of wealth leverage, show how compensation practices affect wealth leverage and present research on the impact of wealth leverage on company performance.

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