Fortuna Advisors LLC

“Accounting seen from the lens of value creation and integration with strategy is a highly under-marketed set of skills…. There's a lot of value to be released in accounting.” Professor Shiva Rajgopal explains how to increase the impact of your investor relations and financial reporting on the latest episode of #CreateMoreValue. Shiva is Professor of Accounting and Auditing at Columbia Business School and an expert on financial reporting, executive compensation, and corporate culture. Takeaways: ?? Articulate Your Advantage: Companies should view reporting not just as a compliance activity, but as a means to communicate their unique value propositions. Clarity on competitive advantages attracts long-term investors. ?? Drill Down on Performance: Rajgopal emphasized the frustration investors face in obtaining straightforward answers to key questions on costs, disclosures, and other metrics, particularly when assessing segment performance. Clarity on granular performance drives transparency and investor confidence. ?? Accounting Reform: From a regulatory viewpoint, there is a pressing need to revisit accounting standards. Rajgopal advocates for more focus on how value is created through investment in technology and other intangible assets to better reflect how modern companies create value. ?? All Aboard: While updated standards may be a ways off, boards and management can proactively foster accountability by advocating for a value framework that yields better insights on how, and where, the portfolio creates value. ?? Podcast: https://lnkd.in/euPhwP_Z ?? Full video: https://lnkd.in/eYRTzEyZ ??? Reel: https://lnkd.in/eEpeseXE #FinancialReporting #Accounting #GAAP #IntangibleAsstes #CorporateFinance #InvestorRelations #ShareholderValue #FortunaAdvisors #Podcast #CreatMoreValue #topquartiletsr #CuringCorporateShortTermism?

“Activist investors are essentially value investors—deep value investors.” Michael Levin sits down with our CEO Greg Milano to explain what activists look for in targets, honing in on governance issues, capital allocation, and executive compensation, on the latest episode of #CreateMoreValue. Michael is an experienced investor, consultant, and creator of The Activist Investor website and newsletter. Takeaways: ?? How you pay matters: “There's this old adage, it's not how much you pay, but how—investors take that to heart.” ?? Board alignment with shareholders: Are the board and the comp committee setting the right goal(s) for the executive team? Is there a disconnect between the board and shareholders on how they’re allocating capital? ?? An antidote to activists: “The very best IR strategy is a steadily rising share price." ?? Podcast: https://lnkd.in/exnS2ivY ?? Full video: https://lnkd.in/e9dsyv5x ??? Reel: https://lnkd.in/eMbzyY9R #TheActivistInvestor #ActivistInvestors #CorporateGovernance #CorporateFinance #ExecutiveCompensation #BoardofDirectors #Boards #ShareholderValue #FortunaAdvisors #Podcast #CreatMoreValue #CuringCorporateShortTermism

"Without understanding where you’re creating value, the rest of the process is meaningless. You need to anchor on value creation—not accounting metrics, value creation metrics." Fortuna CEO Greg Milano talks capital and resource allocation best practices in the latest episode of #CreateMoreValue. Takeaways: ?? Map your portfolio: making the best of your opportunities requires an objective and nuanced view on where you create value across segments, products, geographies and customers. ?? Focus on a value creation: accurately assessing your prospects requires a complete measure—EBITDA, revenue, FCF and other common metrics can lead you astray. ?? Stay on your toes: maintaining previous allocations is a predictor of underperformance. Research shows that active allocators return, on average, 30 percent higher total return to shareholders versus passive allocators. ?? Diversification is overrated: don’t hesitate to concentrate investment in your winners and harvest capital from the clear losers. Bill Gates' original 49% stake in Microsoft would be worth approximately $1.47 trillion versus his current net worth of $154 billion. An objective, value-oriented approach to resource allocation is an underappreciated source of competitive advantage for corporate teams—and a proven driver of sustained returns for shareholders. ?? Podcast: https://lnkd.in/e98iVAPN ?? Full video: https://lnkd.in/e9zwwN5D ??? Reel: https://lnkd.in/e4BUFacy #CapitalAllocation #CapitalDeployment #StrategicResourceAllocation #EconomicProfit #TopQuartileTSR #CorporateFinance #ShareholderValue #FortunaAdvisors #Podcast #CreatMoreValue #CuringCorporateShortTermism #Allocation

“They're spending their own money now. That's the real bottom line of corporate governance.” Our host, Greg Milano, had the pleasure of speaking with the “father of EVA,” Bennett Stewart, on the latest episode of #CreateMoreValue. Bennett's pioneering work to develop and popularize EVA, or economic value added, shaped the way modern corporations measure and drive financial performance. Highlights of the discussion include: ?? EVA’s linkage to shareholder value made it the “E=MC squared” of corporate finance. ?? How economic profit measures like EVA help companies loosen capital controls and empower decentralized decision-making by making capital freely available, but with a cost to cover. ?? Examples of major corporations like Coca-Cola that used EVA to overcome an unhealthy focus on high returns and instead invest more in profitable growth. Bennett was co-founder of Stern-Stewart, which went on to be known as the EVA Company. His 1991 book, The Quest for Value, was a key driver of the shareholder value revolution. More recently, Bennett founded EVA Dimensions, which ISS | Institutional Shareholder Services acquired in 2018 to help its clients adopt economic-profit-based performance measurement. ?? Podcast: https://lnkd.in/dN-9dBch ?? Full video: https://lnkd.in/dsQAgXf8 ??? Reel: https://lnkd.in/dunBghST #EVA #EconomicValueAdded #EconomicProfit #CorporateFinance #ShareholderValue #Leadership #ExecutiveCompensation #FortunaAdvisors #IncentivePlans #CorporateCulture #CorporateGovernance #PerformanceMeasurement #Podcast #CuringCorporateShortTermism #TopQuartileTSR

We’d argue that no individual has had a greater impact on modern corporate finance than the late professor Michael Jensen, who regrettably passed in April. We dove deep into his legacy with his long-time friend and editor, Donald Chew, on the latest episode of #CreateMoreValue. Don, and our host Greg Milano, explored Jensen's groundbreaking contributions, from the concept of agency costs to his views on executive compensation, the market for corporate control, boards and other governance mechanisms – all of which have profoundly shaped how today’s corporations create value. Don is the author of the forthcoming book, The Making of Modern Corporate Finance, and editor-in-chief of the Journal of Applied Corporate Finance, which is dedicated to bridging the gap between theory and corporate practice to highlight actionable insights and strategies for practitioners. ?? Podcast: https://lnkd.in/dkazbcGE ?? Full video: https://lnkd.in/dE9KSic9 ??? Reel: https://lnkd.in/degfiFVz #MichaelJensen #CorporateFinance #ShareholderValue #Leadership #ExecutiveCompensation #PrivateEquity #ValueMaximization #FortunaAdvisors #IncentivePlans #CorporateCulture #CorporateGovernance #PerformanceMeasurement #LongTermValue #BehavioralFinance #Podcast #CreateMoreValue #CuringCorporateShortTermism

Ever wonder how executive pay was different before 1950, and how the plans back then better encouraged executives to behave like long-term committed owners? The brilliant Steve O'Byrne joined our host Greg Milano to discuss the evolution of executive pay, from the fixed profit-sharing models used before 1950 to the continuously competitive pay-based models used today. We examine the ways in which executive compensation has become less and less aligned with company value creation and consider the pros and cons of modern incentive designs, including innovative new approaches. The conversation spans: ?? That economic profit used to be much more common, and how this practice promoted better behavior than what we have today ?? How, starting in 1950, the pursuit of continuously competitive pay served to dilute the power of the incentive structures, reducing the alignment with shareholder value ?? Why EVA lost favor, which is unfortunate, because Steve views EVA as one of the ways to fix what is wrong with comp today ?? An overview of “wealth leverage,’ which measures the alignment of executive wealth and firm value. ?? Development of a new measure called Employee Value Added that tracks labor’s share of value created Steve is the president of Shareholder Value Advisors, with more than 30 years’ experience as a consultant on compensation, performance measurement, and valuation. He was previously a Senior Vice President at Stern Stewart & Co and is the co-author of the book, EVA and Value-Based Management. Moreover, he is one of the most intelligent and knowledgeable minds on executive compensation today! Listen to the full episode or check out the highlights below: ?? Podcast: https://lnkd.in/eRtv27WA ?? Full video: https://lnkd.in/esuC68Ww ??? Reel: https://lnkd.in/ebbeBwhE #IncentivePlans #CorporateCulture #CorporateGovernance #ShareholderValue #ValueCreation #PerformanceMeasurement #LongTermValue #BehavioralFinance #FortunaAdvisors #Podcast #ExecutivePay #Compensation #EVA #EconomicProfit #EmployeeValueAdded #FortunaAdvisors #CuringCorporateShortTermism #CreateMoreValue

“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?” AI is transforming our world, and it's crucial to understand both its potential and challenges. Dr. Anastassia Lauterbach Lauterbach joins Greg Milano on the latest episode of #CreateMoreValue to discuss the evolving landscape of AI development and its implications for corporate leaders. ?? Podcast: https://lnkd.in/eXuVwN9i ?? Full video: https://lnkd.in/e5PH5p2y ??? Reel: https://lnkd.in/e48tJa4y What are your thoughts on AI's role in the future? How should businesses navigate the balance between innovation and ethics? #ArtificialIntelligence #AI #Innovation #CreatMoreValue #FortunaAdvisors #EthicsInAI #AIRegulation #DigitalTransformation #FutureOfWork #Leadership #CuringCorporateShortTermism #AISnacksWithRomyAndRoby #365DaysInAIWithRomyAndRoby

Value management means applying proven valuation principles to strategy, resource allocation, and corporate governance processes to deliver sustained high returns for shareholders and other stakeholders. Fortuna Advisors LLC CEO, Greg Milano, discusses the key tenets to managing for value in the latest episode of the #CreateMoreValue podcast: ?? Measurement: Ensure performance measures are reliably aligned with value creation (spoiler: most popular metrics don’t meet this criteria) ?? Resource allocation: Deploy an objective framework to allocate resources strategically—and be willing to aggressively reallocate capital accordingly. ?? Culture & Behaviors: Consider how corporate processes and incentives contribute to company culture. Embracing value management best practices can foster a “culture of ownership”. For more details on these topics and more, watch or listen to the podcast! ?? Podcast: https://lnkd.in/dWDeFpza ?? Full video: https://lnkd.in/dqruAbZ4 ??? Reel: https://lnkd.in/dF4-pZ_S #ValueBasedManagement #ShareholderReturns #Podcast #BusinessStrategy #CorporateStrategy #CorporateFinance #FortunaAdvisors #Leadership #Management #ValueCreation #CreatMoreValue #FortunaAdvisors #WarrenBuffett #PerformanceMeasurement #Incentives #CorporateGovernance #CapitalAllocation #ResourceAllocation #CuringCorporateShortTermism #OnwershipCulture #ResidualCashEarnings #RCE

“Many companies, like Tesla, invest a lot in their brands early on… It's risky to make those investments, but it's much more risky not to—the status quo is the most risky strategy.” Dr. Mark L. Frigo, a leading authority on strategic valuation and life cycle analysis joins our host, Greg Milano, to share his insights on unlocking long-term value creation on our latest episode of #CreateMoreValue. The discussion spans: ?? The importance of aligning performance measures with long-term value creation ?? Strategic life cycle analysis and brand valuation ?? The challenges of integrating marketing and financial frameworks ?? Podcast: https://lnkd.in/ePVB3K9f ?? Full video: https://lnkd.in/ebcGqN6R ??? Reel: https://lnkd.in/evcFEVi2 Mark is a strategic valuation expert and the founding director of the Center for Strategy Execution and Valuation at DePaul University. He is a CPA, has a PhD in econometrics, and has worked in financial analysis, corporate planning, banking, and consulting at KPMG. He advises CFOs and boards on strategy and has authored seven books and over 145 articles in top business journals. #CreateMoreValue #FortunaAdvisors #Strategy #LongTermValue #BrandEquity #StrategicValuation #LifecycleAnalysis #SustainableGrowth #StrategicLeadership #CFO #FinanceAndMarketing #BusinessStrategy #Podcast

From her family's early life in the South Bronx to becoming the first Latina on a top-five Fortune 100 board, Kimberly Casiano has an extraordinary background. The discussion our host Greg Milano had with Kim focused on the following values that Kimberly has embraced over her career: ?? Continued Learning: Be proactive in seeking out valuable new ideas. ?? Honesty and Integrity: True leadership requires being straightforward and transparent without compromise. ?? Nurturing Relationships: “There's nothing worse than when I get a phone call from somebody who hasn't kept in touch, but they call me when they need something.” ?? Focus on Eulogy Virtues: Emphasize qualities like kindness, honesty, and bravery over “resume” virtues. ?? Full video: https://lnkd.in/eDRnCVPK ?? Podcast: https://lnkd.in/esxpBuWB Kim has been a member of the Ford Motor Company board of directors for twenty years where she serves on the audit committee, nominating and governance committee and sustainability, innovation and policy committee.?She also sits on the boards of Mutual of America Financial Group and The Federal Home Loan Bank of Atlanta.?Kim serves on the board of advisors of Moffitt Cancer Center in Tampa, Florida, the third busiest cancer center in the United States, and is an active member of the Young Presidents Organization both in Orlando and in Puerto Rico.?She previously served the community on the board of the Hispanic Scholarship Fund, which awards $50 million in scholarships each year to Hispanic college students, and is a founding board member of the Latino Corporate Directors Association. #CreateMoreValue ?#FortunaAdvisors #BoardLeadership #LongTermValue #Diversity #ContinuousLearning #CuringCorporateShortTermism #EulogyVirtues