Against the Grain

The unique story of a business heretic and his concept of Economic Value Added (EVA) In Against the Grain, Joel Stern shares for the first time, not only the story of how EVA swept the corporate world, but the story behind the story-the intellectual underpinnings of EVA, how he and his colleagues at Stern Stewart & Co. promoted the concept, won its initial acceptance by major corporations, and later turned the concept into a revolution. He has for good reason been called a one-man catalyst for change. In an engaging memoir, he has given us not only an account of his business strategy, but also provided fascinating anecdotes and vignettes of encounters with leading businessmen on four continents. Joel M. Stern (New York, NY) has been the Managing Partner of Stern Stewart & Co. since its founding in 1982 and was coauthor of The EVA Challenge (Wiley: 0-471-40555-8). A recognized authority on financial economics, corporate performance measurement, corporate valuation, and incentive compensation, he is a leading advocate of the concept of shareholder value. Irwin Ross (New York, NY) was retained to write The EVA Challenge with Joel Stern and John Shiely. He is a former roving editor of Reader's Digest and over the years has written for Fortune and a variety of other magazines.

The unique story of a business heretic and his concept ofEconomic Value Added (EVA)In Against the Grain, Joel Stern shares for thefirst time, not only the story of how EVA swept the corporateworld, but the story behind the story-the intellectualunderpinnings of EVA, how he and his colleagues at Stern Stewart& Co. promoted the concept, won its initial acceptance by majorcorporations, and later turned the concept into a revolution. Hehas for good reason been called a one-man catalyst for change. Inan engaging memoir, he has given us not only an account of hisbusiness strategy, but also provided fascinating anecdotes andvignettes of encounters with leading businessmen on fourcontinents.
Joel M. Stern (New York, NY) has been the ManagingPartner of Stern Stewart & Co. since its founding in 1982 andwas coauthor of The EVA Challenge (Wiley: 0-471-40555-8). Arecognized authority on financial economics, corporate performancemeasurement, corporate valuation, and incentive compensation, he isa leading advocate of the concept of shareholder value.
Irwin Ross (New York, NY) was retained to write The EVAChallenge with Joel Stern and John Shiely. He is a former rovingeditor of Reader's Digest and over the years has written forFortune and a variety of other magazines.

Foreword by John S. Shiely ix
Chapter 1 The Great Break 1
Chapter 2 Beginnings 9
Chapter 3 Rebel Banker 23
Chapter 4 A Letter from Oppenheimer 49
Chapter 5 On Our Own 63
Chapter 6 How We Grew 77
Chapter 7 The Key Role of Incentives 91
Chapter 8 The Missionary Way of Life 99
Chapter 9 Dispatches from the Sales Front 123
Chapter 10 As for the Future 133
Chapter 11 The Credo of a Radical Free Marketeer 143
Appendix Heresies That Have Stood the Test of Time 169
Let's Abandon Earnings per Share 171
Some Thinking to Do 178
What if Capital Markets Are "Efficient"? 181
Fewer Analysts, Please: Why People
Believe Capital Markets Are "Inefficient"! 184
Are "Technicians" an Endangered Species? 187
Are "Fundamental" Security Analysts Necessary? 192
Companies Should Avoid Sharp Swings in Dividends 197
Why Dividends Do Not Matter 201
Risk Matters 204
Acknowledgments 207
Index 211
Photographs appear after page 110.