【正文】 ter adoption negatively relates to the use of VBM to determine pensation. This effect is not statistically significant after two years. It is possible that firms that already focus on value creation are more likely to tie VBM to pensation and that these firms simply have less potential for improvement. Alternatively, firms might cap bonus payouts too low when they implement plans, which reduces initial efficacy. We also find that firms reduce capital expenditures following VBM adoption. These reductions in spending do not differ based on the firms’ growth opportunities. Thus, the improvement in performance does not appear to e at the expense of longterm value. Overall, our results provide support that valuebased management systems are effective mechanisms for improving corporate performance. The literature on property rights (., Alchian and Demsetz, 1972) and agency theory (., Jensen and Meckling, 1976) maintains that different incentives lead to conflicts between shareholders and managers of the public firm that result in a loss in firm value. Ultimately, the shareholders bear this loss. Valuebased management provides an integrated management strategy and financial control system designed to mitigate these agency conflicts and increase shareholder value. VBM systems attempt to acplish this goal by providing managers with a set of decisionmaking tools that, at least in theory, identify which alternatives create or destroy value, and often by linking pensation and promotions to shareholder value. Firms can use these metrics to monitor and reward management performance. They provide a mechanism for linking managers’ decisions to firm performance outes that create shareholder value and provide a means to further align shareholder and managerial interests. Valuebased management has captured the interest of the corporate and investment munities. Ryan and Trahan (1999) report that 87 percent of 86 CFOs surveyed indicate that they are familiar with valuebased management. Most of these CFOs also indicate that their firm uses one or more VBM systems. This interest has also been demonstrated in the business press. Articles in Fortune (., Stires, 2020。 Colvin, 2020。 Tully, 1999) include a list of 1,000 panies ranked by how much market value they added during the past decade, based on Stern Stewart’s market value added (MVA) metric. These articles profile several corporations that have adopted a variety of management systems, based on different VBM metrics, in an effort to increase their value. We identify four variations of VBM metrics from these articles in the popular press. All of the metrics are similar in that they are singleperiod measures of performance that take into account return on invested capital and the relevant cost of capital. They are all consistent with discounted cash flow valuation. Although consulting firms have popularized these metrics, many panies apply their own versions of the metrics. We do not take any given metric to represent the work of a consulting firm that may have popularized the method. We provide a summary of these four metrics below: (1) Discounted Cash Flow (DCF)—DCF methods, for instance shareholder value added (SVA), express value as expected future cash flows discounted to the present time at the pany’s cost of capital. See Rappaport (1998) for a more detailed discussion of DCF methods as they relate to valuebased management. (2) Cash Flow Return on Investment (CFROI)—CFROI expresses an estimate of a pany’s singleperiod cash flow as a percentage of total investment. Madden (1999) prov