Explorez tous les épisodes du podcast Create More Value

Most incentive plans fail to drive true value creation—they reward mediocrity, encourage short-term thinking, and reward sandbagging and gaming of the system. In the fourth instalment of a LinkedIn Live series, Fortuna partners Greg Milano and Marwan Karame share a better incentive compensation design using a modern take on economic profit: Residual Cash Earnings. We cover why traditional bonus plans fall short, the key traits of an ownership culture, and how true value-based incentives align management’s interests with those of long-term investors. We also feature real-world examples and simulations that demonstrate why this approach is so effective at creating an ownership culture at large public companies.

Consider a hypothetical company in 2012 with two business units—Amazon and Walmart. Our latest episode considers the question: which business would you rather own and prioritize reinvestment in? Traditional financial metrics would have made Walmart look like the obvious winner—profitable, disciplined, and cash-rich. But what happens if you use a modern economic-profit lens to value these disparate business models? This thought experiment explains why so many high-growth, high-potential businesses get starved of capital at large, public companies that rely on outdated metrics to allocate resources. How you measure matters.

This podcast features the third installment of our LinkedIn Live series on how economic profit drives long-term value creation. Fortuna partners Greg Milano and Marwaan Karame discuss strategic resource allocation: how companies can better allocate capital and other resources to unlock more shareholder value. They explore common pitfalls like erroneous objectives, lack of focus, and decision paralysis that lead firms to invest in value-destroying projects while underinvesting in their best growth opportunities. Through real client case studies, they explain how residual cash earnings, a modern, cash-based economic profit measure helps leaders identify where value is truly created across business units, segments, and products—even down to the SKU level. The episode emphasizes the importance of a fact-based, focused approach to investment decision-making. 

Dan Sansone, former CFO of Vulcan Materials Company, joins the podcast to share how EVA focused forecasting, planning, and incentives on a singular goal of value creation. Drawing on nearly three decades at Vulcan and as a board member, the conversation covers why traditional lookbacks often stifle investment, why rolling targets and economic profit improve accountability, and the importance of designing consistent, transparent incentives that foster an ownership mindset. This episode can help corporate leaders seeking to embed a value framework into everyday business decisions.

This podcast features the second installment of our LinkedIn Live series on how economic profit drives long-term value creation. Fortuna partners Greg Milano and Marwaan Karame discuss how Residual Cash Earnings (RCE) improves upon earlier economic profit models—most notably EVA. Greg shares how his experience with EVA, and later with Credit Suisse’s HOLT framework, led him to identify a key flaw: depreciation was distorting performance, encouraging companies to “sweat assets” and underinvest. RCE treats depreciation differently, restoring the incentive to invest appropriately. Importantly, RCE is also simpler to use and implement, requiring far fewer adjustments than EVA. Research shows that these improvements lead to RCE tracking better with shareholder returns, which means a stronger alignment between the interests of management and long-term investors.

Valuation virtuoso, Michael Mauboussin, joins us to explore the core drivers of long-term value creation. We explore how valuation multiples are often misleading, why the rise of intangible assets requires new valuation frameworks, and how investors and corporate managers alike can better evaluate strategy and competitive advantage. We cover practical frameworks on capital allocation, sustainable competitive advantage, and why truly understanding economic fundamentals is key to avoiding “value traps.” This episode is a must-listen for finance professionals, executives, and serious investors. Michael is Head of Consilient Research at Counterpoint Global, a Morgan Stanley Investment Management fund and a finance professor at Columbia Business School.

Joe Milam, founder of AngelSpan and The Legacy Funds, joins the podcast to discuss how behavioral finance principles improve decision-making for corporate managers and investors alike. Milam critiques the current chaotic, informal funding environment for startups and introduces his Venture TAMP platform, which applies disciplined public-market strategies—like the Kelly Criterion and standardized reporting—to early-stage investing. He emphasizes reducing bias, improving transparency, and optimizing capital allocation to support innovation. The conversation spans topics like barriers to corporate innovation, portfolio theory, and how data-driven decision-making often outperforms human intuition in venture and public markets alike.

Fortuna partners Greg Milano and Marwaan Karame highlight how economic profit (EP) drives superior decision-making, cultural alignment, and, ultimately, value creation. Unlike traditional metrics like ROIC or EBITDA margin, EP reflects the true value a company creates—profit earned above the cost of capital. Their research shows that companies embedding EP into planning, decision-making, and incentives outperform the market by 7% annually. Real-world examples, such as Kimball Electronics and Varian Medical Systems, illustrate how adopting EP can trigger profitable growth, foster an ownership mindset, and lead to better capital allocation and portfolio optimization decisions. EP encourages better behaviors like smart spending and risk-taking, focused prioritization, and long-term thinking. 

“From the shop floor to the top floor,” Kimball Electronics employees are laser-focused on economic profit.  Kimball CFO, Jana Croom, discusses the transformative impact of the measure on business performance and how it aligns the team on a shared goal of value creation. Jana explains how economic profit provides a comprehensive view of financial health and aligns decision-making and strategy across all levels of the organization. We cover Kimball’s use of EVA in planning, compensation, and operational execution, including practical examples like inventory management and capital investment. Jana also shares insights on navigating market volatility, balancing capital efficiency, and why it’s important for CFOs to lead well beyond the finance department. This episode offers valuable takeaways for finance leaders and executives seeking to sharpen their team’s strategic focus and embrace a value-oriented ownership culture.

CEO, Ryan Barker, and Chief Strategy Officer, Ken Favaro, of BERA Brand Management explore how brand management strategies intersect with activist investor pressures. They discuss how Bera’s AI-powered platform equips businesses with real-time, predictive brand data that connects brand equity directly to financial outcomes. Using examples like Heinz and Barbie, the conversation highlights how companies can defend and optimize brand investments—especially under activist scrutiny. The takeaway? Treat brand as an asset, measure it with financial rigor, and use data to drive ROI, relevance, and pricing power in a competitive landscape.

AnnaMaria shares insights from her leadership roles in some of the most significant mergers and transformations in recent history—including Pfizer-Wyeth and DowDuPont, and XPO Logistics. She discusses how strong leadership, clear communication, and a robust value creation thesis are critical for successful mergers. The conversation also explores the evolving role of communications in driving growth, managing risk, and building reputation as a core business asset. AnnaMaria DeSalva is also a seasoned leader in strategic communications and corporate transformation. From 2017 – 2024, DeSalva served on the board of XPO Logistics, becoming Vice Chairman in 2019, and played a key role in board engagement, strategy, CEO succession, and governance during XPO’s transformation. Currently, AnnaMaria is Global Chairman of the Burson Group, a leading communications firm focused on creating value through reputation. From 2019 to 2024, she was Global Chairman and CEO of Hill & Knowlton Strategies. Previously, she was Chief Communications Officer at DuPont and a senior advisor to DowDuPont CEO Ed Breen during the company’s historic split into independent public companies. Earlier in her career, she also held leadership roles at Pfizer, Bristol Myers Squibb, and GCI Group.

Greg Milano discusses how annual incentives can drive better corporate behavior. He highlights common flaws in traditional incentive plans, such as incomplete metrics, the time-consuming and counterproductive negotiation and gaming of targets, and ineffective payout structures. Milano advocates for a value-management approach using a cash-based measure of economic profit that reliably reflects shareholder value creation. Milano’s preferred economic profit measure, Residual Cash Earnings (RCE), was developed to encourage profitable investment, reduce financial manipulation, and simplify incentive structures by measuring against the prior year rather than the plan. Complete measures like RCE not only restore sanity to planning and target-setting—they unite the team on a shared goal of value creation by helping management pinpoint its most promising strategy, capital allocation, and portfolio optimization opportunities, even across complex businesses. Indeed, research shows companies that use economic profit measures like RCE outperform the market by 7% annually, as they are able to target and sustain TSR improvement.  

Dave Peacock, CEO of Advantage Solutions, discusses the bold transformation he is leading to create more value at Advantage—turning a fragmented business into a focused provider of solutions that improve the velocity of commerce, helping brands get the right products on the right shelves and helping retailers more efficiently convert shoppers to buyers. Facing structural changes and secular challenges, we discuss lessons learned in his three decades of experience, including his tenure as President of Anheuser-Busch during its acquisition by InBev and working with 3G Capital to drive efficiency while preserving top-line results with brand investment and pricing power. He also shares how his early education in journalism and economics helped shape his perspective as a leader in evaluating and communicating the commercial opportunity ahead.

Dr. Alise Cortez, organizational psychologist and founder of Gusto Now!, explores how companies can instill meaning and purpose in their cultures to drive engagement, innovation, and profitability. Dr. Cortez shares practical strategies for measuring purpose, fostering a “culture of gusto,” and transforming businesses into “destination workplaces” that attract and retain top talent. Alise and our host Greg Milano highlight research showing the returns on purpose along with case studies on companies successfully embedding purpose into their operations. They also consider how generational shifts are making workplace purpose increasingly essential.

Dennis Kubaile, co-founder of Granulytix, joins Greg to discuss how their groundbreaking platform enables granular economic profit analysis across complex portfolios on an ongoing basis. From segments to customers, geographies, channels and SKUs, Granulytix has proven to be immensely useful to understand where value is being created—and to pinpoint the best investment and improvement opportunities in real time, which enables an agile approach to strategy and resource allocation. Dennis shares real-world examples of businesses that drove profit growth by leveraging granular profit to uncover hidden inefficiencies, reallocate resources, and change the underlying business model. Greg and Dennis also explore the growing role of AI and Granulytix’s new agentic AI-powered solution for financial and strategic analysis, GranulytixIQ, and the impact this will have on both consultants and companies making data-driven investment decisions. Prior to founding Granulytix, Dennis spent over 20 years in strategy consulting developing value-based strategies for clients like Caterpillar, Abbott, and Boeing.

Caterpillar Inc., the world’s leading construction equipment manufacturer, delivered over 2.5x the cumulative total shareholder return of the S&P 500 over the last eight years. In this episode, Caterpillar CFO Andrew Bonfield discusses how value-based management enables their dominant financial performance. At the heart of Caterpillar’s strategy is a focus on “profitable growth,” guided by a measure they call operating profit after capital charge (OPACC). OPACC is an economic profit measure that allows Caterpillar to target operating improvements and strategically allocate resources across its complex portfolio, focusing on high-return opportunities while restructuring or exiting underperforming areas. For Caterpillar, growth and innovation are essential; a disciplined, fact-based approach helps them identify their very best investment and improvement prospects.

Our conversation with David Berkowitz, founder and CIO of Value Aligned Partners, covers investment strategies that focus on long-term value creators. Greg and David discuss the inefficiencies of the “earnings game,” aligning management incentives with shareholder interests, and how to identify high-quality companies with sustainable competitive advantages. Berkowitz outlines three investment strategies: ownership companies with strong incentive structures, “cannibal” companies with high share buybacks, and dominant monopolistic or oligopolistic firms. He also compares public and private equity investment approaches, emphasizing behavioral economics and value-focused operating systems. In addition to being an investor, David conducts corporate finance education and value-based management training for corporate professionals and board members.

Garrett Delph, founder and CEO of Clarity Ops LLC, shares his journey from leaving corporate America to scaling multiple companies to over $50M in revenue. He introduces his operational strategies, including the FAST solution system, the Quad Core Management Framework, and P3 (People, Process, and Performance). Garrett explains how these frameworks optimize business operations by addressing inefficiencies, emphasizing leadership load balancing, and improving processes to enhance organizational culture and performance. He also discusses the unique perspective an outside advisor can bring and the value of external insights in overcoming business challenges.

James Pappas discusses his journey from the family restaurant business to consumer and retail finance roles at Goldman Sachs and Bank of America to founding an activist investor firm. However, his firm, JCP Investment Management, differs from most activists in a few ways. He differentiates his approach as “growth activism,” which focuses on sustainable growth opportunities over more typical activist approaches like cost-cutting or corporate break-ups. Crucially, Pappas stresses the importance of customer-centric strategy, clarity on objectives, and optimizing capital structures. He embraces a collaborative approach aimed at long-term guidance and getting the right people in place to foster long-term success. James has sat on nine public company boards, including Jamba Juice, United Natural Foods, US Geothermal and The Pantry, by way of example. Pappas explains how his entrepreneurial background in finance and in the family restaurant business shaped his expertise in operations and capital management. 

Former Univar CFO and veteran of the chemical industry, Carl Lukach, discusses CFO strategy and financial leadership best practices. Carl emphasizes the importance of a “playbook to win”—a structured approach to strategy inspired by Roger Martin's Playing to Win. He also covers the CFO’s role in competitive strategy, highlights the importance of building a high-performance team, and advocates for collaboration and breaking down silos within finance functions. Carl is currently an advisory director at CVC Capital Partners, a senior advisor at TorQuest Partners, and a board member at Xypex Chemical Corporation. He was formerly CFO of Univar solutions and a 30-year veteran of Dupont in various finance and commercial leadership roles. In 2019 he was FEI Chicago’s public company CFO of the year.

Brian Tomlinson of EY argues that sustainability is a long-run driver of shareholder value. Brian and our host, Greg Milano, explore how boards and managements can measure, reward, and communicate their sustainable business practices. While noting that contemporary ESG metrics can pose certain challenges, the discussion underscores the growing importance of these financial disclosures in attracting committed long-term shareholders. Brian also covers global ESG reporting developments, including the EU’s Green Deal and strict regulatory standards—and contrasts this unified approach with the U.S.’s fragmented regulatory landscape. Brian is Managing Director of ESG at EY and was formerly Director of Research for Chief Executive for Corporate Purpose’s CEO Investor Forum.

Ken Fisher, CFO of Champion X, discusses his extensive career in finance and leadership roles across industries, including his time at Noble Energy, Shell, and GE. Ken shares lessons on strategy development, execution, and working capital management that are vital for new and aspiring CFOs. His insights highlight the value of diverse experiences, such as handling growth and restructuring in various sectors like industrials and energy. He emphasizes the importance of focusing on both the income statement and balance sheet to improve cash flow and business efficiency. The episode also touches on Ken's experiences in M&A, investor relations, and the challenges facing a public company CFO.

Professor Shiva Rajgopal addresses common shortcomings in financial reporting frameworks, highlighting a lack of transparency on key metrics, costs, and disclosures, which can frustrate investors. Rajgopal suggests companies should take their reporting a step further and improve how they communicate their value drivers, competitive advantages, and segment performance to attract sophisticated, long-term shareholders. He also calls for reforms by regulatory bodies and greater accountability from boards and management to yield better insights into how companies leverage tangible and intangible assets to create value. Shiva is Professor of Accounting and Auditing at Columbia Business School and is an expert in financial reporting, executive compensation and corporate culture. His research is frequently cited in many publications, including The Wall Street Journal, Bloomberg, Fortune, Forbes, Financial Times, Business Week, and the Economist.

Michael Levin, experienced investor, consultant, and creator of The Activist Investor website and newsletter, explains how activists determine targets, honing in on governance issues, capital allocation, and executive compensation. Michael also covers how activists advance their agenda to unlock more value.

Fortuna’s Greg Milano talks capital and resource allocation best practices and highlights pitfalls, such as overinvesting in underperforming businesses and relying on misleading metrics. An objective, value-oriented approach is an underappreciated source of competitive advantage for corporate teams—and a proven driver of sustained returns for shareholders.

Bennett Stewart, the “father of EVA” was co-founder of Stern Stewart and a leader in the shareholder value movement. He explains how EVA revolutionized performance measurement corporate governance and empowered better value management. He discusses the measure’s application in major companies like Coca-Cola and General Motors and how it helped them drive a focus on true value creation.

Donald Chew, author and editor-in-chief of the Journal of Applied Corporate Finance, discusses the life and legacy of the late Professor Michael Jensen, a pioneering figure in financial economics. We explore Jensen's work on agency costs, corporate governance, and executive compensation, as well as his later focus on corporate culture. The conversation highlights Jensen's profound impact on how US corporations and capitalism create value today.

Steve O’Byrne is among the most knowledgeable experts on executive pay practices, hands down. He shares his insights on the evolution of performance measurement and executive pay, from the fixed profit-sharing models of the 1920s to today’s market-based compensation packages. We explore the use of option grants, EVA, private-equity models, and even Steve’s most recent innovation, Employee Value Added. Steve is president of Shareholder Value Advisors with over 30 years’ consulting experience in compensation, performance measurement, and valuation.

Our discussion with Dr. Anastassia Lauterbach explores the transformative power of AI, discussing its potential across industries, the impact of the European AI Act on innovation, and its implications for corporate executives and boards. She said, “Around 2012-2013, digital assets made up about 12-14% of the valuation of large businesses. After COVID, that number jumped to 90%...  What does it mean for the competitiveness of your company?”  For those interested in creating more value at their companies, Dr. Lauterbach is someone to listen to.

Value management means applying objective valuation principles to strategy, resource allocation, and performance measurement processes to deliver sustained returns for shareholders and other stakeholders. In this episode, Fortuna Advisors' CEO Greg Milano discusses the very innovative approach Fortuna Advisors takes to value-based management, focusing on the key tenets of creating an “ownership culture” within companies.

Dr. Mark Frigo, professor and founding director of the Center for Strategy Execution and Valuation at DePaul University, discusses the importance of long-term value creation and the application of strategic life-cycle analysis, which characterizes businesses into one of four categories: high innovation, competitive fade, mature and failing. He highlights his collaboration with CFOs and executive teams to integrate strategy with performance measures, ensuring sustainable value creation. Dr. Frigo also covers brand valuation, the challenges of aligning finance and marketing, and the need for strategic leadership at the CFO level.

Kimberly Casiano, board member of Ford Motor Company, Mutual of America Financial Group, and the Federal Home Loan Bank of Atlanta, shares her story, from her early life in the South Bronx to becoming the first Latina on a top-five Fortune 100 board. Kimberly emphasizes the value of continuous learning, the power of honesty, the importance of nurturing genuine relationships, and the distinction between resume virtues and eulogy virtues.

Ramesh Karnani explains the importance of approaching strategy from a shareholder value perspective and considers some of the problems that can result when strategy is not supported by insightful financial analysis. He also explains how return on investment derives from a combination of industry economics and competitive position.  Ramesh’s insights draw from his decades of experience helping build the strategy consulting firm Marakon, as the leader of a strategic finance group in Credit Suisse’s investment banking unit, and as a Managing Director and Partner at the Boston Consulting Group. 

World-renowned Professor Anup Srivastava discusses the challenges of valuing, investing in, and developing intangible assets in today's corporate world. From the valuation of tech giants like Google and Facebook to the critical need for updated accounting frameworks, Professor Srivastava explains how “soft assets” like knowledge, algorithms, technology, and brand equity influence strategy, drive financial performance, and require rethinking traditional corporate governance practices.

Fortuna Advisors CEO Greg Milano discusses flaws in corporate incentive plans that encourage bad behaviors, from financial manipulation to more subtle agency costs that impact companies’ long-term performance. As the late Michael Jensen said, “It's not how much you pay that matters. It's how you pay." The conversation hones in on the use of Relative Total Shareholder Return (TSR), a measure whose volatility leads to poor linkage to actual performance and undermines executives’ confidence in their long-term incentive plans (LTIPs).  Want more insights from Executive Rewards experts at WorldatWork’s Total Rewards conferences? Purchase the Total Rewards’24 On-Demand Highlights package available through Sept 30, 2024 here, or lock-in your savings today and register to join WorldatWork in Orlando for Total Rewards ’25!

Sean Pelkey, CFO of CSX Corporation, discusses the railroad company’s stunning transformation in the face of stark headwinds and a devastating loss of business as the coal industry collapsed in the early 2010s. Starting in 2017, CSX effectively tripled its share price over five years. Now, the company is shifting from efficiency to a profitable growth mindset. In Q1 2024, their share price hit an all-time high, reflecting this strategy's early success. Behind this cultural shift towards growth was a renewed focus on differentiated service offerings and a shared goal of value creation. Sean and Greg’s discussion highlights leading through change, balancing competing metrics, and strategic capital allocation, while showcasing how determined leadership can thrive, even in tough circumstances.

Jeff Greene explains why capital allocation is so important, what companies typically do wrong, and his view on the main tenets of good capital allocation. As Jeff says, “Clearly, allocating capital is one of the CEO’s and CFO's most important jobs,” and, “Very few companies do all aspects of capital allocation well.” Jeff joined Fortuna in 2020, after 26 years as a partner in the Strategy & Transactions practice at EY (Ernst & Young), and he also spent eight years at investment bank Houlihan Lokey. 

Steve Chopp, currently CFO and EVP of Strategy for Lief Labs, describes his experiences implementing value-based management at smaller private companies. These companies tend to be less complex and the implementation process can be easier and faster, but it is still change management so there needs to be communication, training, etc., to help people see what is changing, how it affects them, and what they need to do differently. And since smaller companies tend to have tighter budgets for such things, they need to be resourceful, using, for example, train-the-trainer approaches.

Ryan Barker explains how critical brand love is in driving total shareholder return.  He is the CEO and founder of BERA Brand Management and has been revolutionizing the measurement of true brand differentiation using predictive AI technology. He talks about the shortcomings of media mix models, the use of brand metrics as an executive KPI, and the ways in which companies can improve how they manage by using brand love to develop plans, allocate resources, and drive more short- and long-term profitable growth.  Our host, Greg Milano, also describes Fortuna Advisors' research showing how BERA brand metrics relate well to valuation multiples.

With Anna Catalano’s extensive experience as a board director across many industries and as a former executive in energy, she shares insights that are useful to anyone in a business leadership role. Her thoughts on how companies can avoid being disrupted, and the board’s important role in this, are very helpful. She also covers risk management, innovation, and career advice for women, and throughout, she fills the discussion with well thought out advice to all.

Scott Morrison recently stepped down from being CFO of Ball Corporation, the longest running user of EVA, which is economic value added. Over his tenure, Ball has delivered about eight times the total shareholder return of the market, a very impressive result. Scott explains how EVA has helped management and employees deliver such outstanding results, with commentary on planning, capital allocation, investment decisions and corporate culture. 

Pamela Savino, CEO and founder of Live Authentically, says “There's nothing more magnetic than a leader who's in touch with who they truly are,” but she concedes that, “inauthentic behaviors are pretty prevalent, mainly because our society isn't set up to promote authenticity.” She blends her corporate experience with the concept of authenticity and shows executives how they can attract more in all areas of life and business. Organizations who invest in authentic leadership will create more value.  

Gary Bischoping, a partner at private equity firm Hellman & Friedman and former CFO of Finastra and Varian Medical Systems, explains how “operationalizing value creation” can be a “superpower.” Indeed, at Varian, Gary championed a focus on explicit value management, both at corporate and in operations, that redirected their capital allocation priorities, reignited profitable growth, and dramatically increased the share price. Gary refers to himself as a “corporate finance junky,” and he explains the “art” of strategic finance in terms of alignment, rhythm, and truth.

Investing in small and mid-cap public companies can be tricky, but Glenn Welling, founder and chief investment officer of Engaged Capital, has made a name for himself in the industry. About being an activist, he said, “When we arrive, nobody ever wants us there… [but] once we’ve been there for 90 days, nobody wants us to leave.”. With a background in investment banking and strategy consulting, Glenn brings valuable skills to each company he invests in. Glenn shared what Engaged Capital looks for when identifying companies to invest in and what companies can do to keep activists away. He also shared some of the more interesting situations his firm has faced, including an investment where the board included a priest and a nun as directors. 

Paul Clancy successfully engaged with activist investors for more than a decade as CFO of Biogen, then Alexion. A stalwart believer in value-based management, Paul was recognized in the top three biotech CFOs by Institutional Investor from 2011-2020. He was awarded the number five Top CFO by the Wall Street Journal, across all industries. Now he sits on four biotech boards, teaches at Cornell’s business school, and is an executive in residence at Harvard Business School. We discuss the unique challenges of allocating capital, innovation, and marketing resources with very long product development cycles. Paul is also clear that once “you get a medicine to market, you actually can narrow the range of outcomes” and all the “sound principles of corporate finance” apply.