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10 ways to create shareholder value - Coggle Diagram
10 ways to create shareholder value
Do not manage earnings or provide
earnings guidance
accountant’s bottom line approximates neither a company’s
value nor its change in value over the reporting period
organizations compromise value when they invest at rates below the cost of capital
Strategic decisions
maximize expected value
expense of lowering near-term earnings
Make acquisitions
maximize expected value
expense of lowering near-term earnings
Return cash to shareholders
no credible value-creating opportunities
Reward CEOs and other senior execs
delivering superior long-term returns
Reward middle managers and frontline employees
for delivering superior performance
on the key value drivers
Reward operating-unit executives for
adding superior multiyear value
senior executives
risks of ownership
Provide investors with value-relevant
information