Research On Performance Evaluation Of Shareholder Value Creation In Listed Companies

Shareholder value creation is an important indicator for the management to increase shareholder value through investment,financing and business operation according to the strategic objectives formulated by the board of directors.The realization of shareholder value is the reflection of managerial behavior in the market value,and shareholder value creation index reflects the commitment of managers to shareholder value.It is the product of the combination of capital market and with accounting indicators,and is the link between performance goals and value,compensation and performance.On the practical application of Alfred Rappaport’s shareholder wealth creation performance system as the performance evaluation of listed companies,domestic and foreign scholars have had some similar studies.But how to establish a shareholder value performance evaluation system for A-share characteristics and embed it into the sensitive A-share market,the author finds that it is difficult to establish an effective link between more shareholder value creation performance indicators and the actual contribution of managers.In this paper,we analyze the basic framework of Alfred Rappaport’s shareholder value creation model and analyze the two elements of the model: operating cash flow and cost of capital,and find that the two prerequisites for the model to fully subsume expected market returns into the cost of capital are not applicable in the A-share market.Only the expected returns expressed in the pricing of securities in an efficient market can represent the cost of capital for investors;It also includes the drivers of capital gains,which are also very far fetched to be attributed to the growth of operating cash flows and the decline in the cost of capital.With the rapid development of scientific and technological innovation,shareholder value creation should have a more direct and innovative expression,so the shareholder value performance management focuses on share price improvement,while dividend growth is an important expression of financial performance.In terms of stock price response,shareholder value performance is ahead of financial performance in terms of innovation drive,and short-term overestimation is an important expression of longterm financial performance improvement expectations.Thus,the author revised the Alfred Rappaport value driver model by embedding innovation drivers,optimized the key factor conduction model,established the performance evaluation system of shareholder value creation by correlating the interrelationship of pointing indicators,and select the listed companies in the steel sector as a sample to conduct empirical analysis to verify its feasibility.The Alfred Rappaport shareholder wealth creation correction model established in this paper is a research exploration for the characteristics of A-share market,and its application effect has yet to be tested in the long-term market.Although it is found feasible in the empirical sample,more in-depth research is expected to improve the shareholder value performance management of A-share listed companies in this way in all aspects.