Measuring Top Management Performance: NEVA: Net Economic Value Added for Evaluation. 2nd Edition

One of the major challenges in evaluating CEO performance is determining whether management follows short-term or long-term policies. As a result, it is often difficult to assess how effectively a CEO is performing. Although many firms increasingly rely on bonus-based compensation systems, there remains a need to link executive compensation more closely to actual company performance. This research begins with EVA (Economic Value Added), widely regarded as an effective measure of corporate performance. However, the study argues that company performance should not automatically be considered equivalent to CEO performance. Building upon the EVA concept, this work introduces a new approach for evaluating top management performance, referred to as NEVA (Net Economic Value Added).