Tenneco Automotive Inc. (ticker: TEN, exchange: New York Stock Exchange) News Release
December 15, 1999
TENNECO AUTOMOTIVE PARTNERS WITH STERN STEWART & CO. TO ADOPT ECONOMIC VALUE ADDED MANAGEMENT SYSTEM
LAKE FOREST, Ill.--(BUSINESS WIRE)--Dec. 15, 1999--Tenneco Automotive (NYSE: TEN) today announced it has engaged Stern Stewart & Co. to assist with the implementation of the Economic Value Added (EVA) Management System. The EVA system helps measure a company's value with a goal toward driving sustainable shareholder wealth.
"By implementing EVA, we will significantly improve our ability to deliver long-term, sustainable value to our shareholders, customers and employees," said Mark P. Frissora, president and chief executive officer of Tenneco Automotive. "EVA will foster a culture within Tenneco that will further align the interests of the organization with those of our shareholders.
"To implement such a powerful change, we have partnered with Stern Stewart, who is considered to be the gold standard for advising companies on how to increase shareholder wealth," Frissora said. Academic research has found that Stern Stewart's EVA clients have enjoyed substantially higher total shareholder returns than the other companies in their same industry for several consecutive years from time of adoption.
The implementation of the EVA Management System entails an extensive process where shareholder wealth creation becomes the centerpiece of business literacy. Management's pay will increase or decrease depending on their ability to meet or exceed the expected returns of shareholders. As a powerful measure, EVA will be used to communicate, manage, and reward performance, as well as to evaluate strategies, investments, budgets, and tactics.
Stern Stewart will work with Tenneco Automotive into 2001 on an implementation plan that will reach all levels at the company's 81 facilities worldwide. Additionally, a new compensation program is being developed that will tie EVA performance to the pay of every employee worldwide.
"Stern Stewart has a vested interest in Tenneco Automotive's ability to deliver long-term, sustainable shareholder wealth via EVA," Frissora said. "A significant portion of Stern Stewart's fees for the project have been awarded through out-of-the-money stock appreciation rights."
Stern Stewart & Co. consists of more than 150 professionals, principally in New York and London. Stern Stewart pioneered the development of the EVA framework over the past 20 years, and is the world leader in shareholder wealth creation assistance.
Tenneco Automotive is a $3.2 billion manufacturing company headquartered in Lake Forest, Ill., with 24,000 employees worldwide. Tenneco Automotive is one of the world's largest producers and marketers of ride control and exhaust systems and products, which are sold under the Monroe® and Walker® global brand names. Among its products are Sensa-Trac® shocks and struts, Rancho® shock absorbers, Walker® Quiet-Flow® mufflers and DynoMax™ performance exhaust products, and Monroe® Clevite™ vibration control components.