Is your capital

allocation strategy
driving or diminishing
shareholder returns?
Three questions CFOs and CEOs need to
answer about investment decision-making
ey.com/capitalallocation
72%
of CFOs admit their
company’s capital
allocation process
needs improvement.

Making the right capital allocation decisions is essential for senior

Be systematic amid massive disruption
executives to maintain a company’s long-term growth and increase
shareholder returns. Unfortunately, in our survey of more than 500 Our survey shows that approaching capital allocation systematically
global CFOs, a surprising 72% admit their company’s capital allocation creates value: almost two-thirds (65%) of CFOs who say their
process needs improvement. company increased in value more than their peers over the past
12 months also say that they take a formal approach to capital
We regularly see examples of how making objective and
allocation. Only about one-third (32%) of CFOs who say that their
data-based decisions, and clearly communicating a company-wide
company decreased in value more than their peers also say
capital allocation strategy, benefits companies and their investors.
the company takes a formal approach to capital allocation.
In two examples we expand on below, Disney manages its risk profile
to incorporate high-risk/high-growth investments along with low-risk/ It seems clear that there is value in taking a systematic approach to
core M&A in ways that drive shareholder returns, while Honeywell’s allocating capital, but less than half of the companies we surveyed
fact-based criteria help inform divestments that enable capital (49%) did so, as shown in Figure 1.
redeployment toward higher-growth businesses.
How can companies develop their capital allocation practices to Figure 1. How would you describe your company’s capital
enable the right decisions? In this paper, we outline three essential allocation process?
questions from board members, investors and stakeholders that
every management team should be prepared to answer:

1 Can we react quickly enough to opportunities and threats?

2 Are we making objective, unbiased decisions? Formal, systematic approach

49% 47% Mix of formal and ad hoc
3 Are we returning cash to shareholders at the right time, Ad hoc basis as opportunities occur
and in the right way?

4%
Decisions about which acquisitions and divestitures to execute, Figure 2. What are your main areas of focus for your capital allocation
what emerging technologies to invest in and whether to return cash process? (Select all that apply)
to shareholders are more critical than ever. Disruptive forces such
as technology, industry convergence, geopolitics and regulatory Capital expenditures 59%
uncertainty have hastened the pace at which executives need to make
capital allocation decisions. Examples are shown in Figure 2. Divestment of
underperforming assets
49%
How much disruption are we talking about? Consider a list of the
Return of capital to
world’s 20 largest companies, based on market capitalization: half 43%
shareholders
the names on that list at the end of September 2018 were not
there 10 years ago, including six of the top eight. Adopting a capital R&D 43%
allocation approach that lets CEOs, CFOs, other top executives and
boards focus on the long term can help future-proof the business. Inorganic (M&A) 43%

Capital structure decisions 25%

Working capital 15%

Insights on leading capital allocation practices

This paper builds on the eight leading practices for allocating capital outlined in the recently published
EY book, The Stress Test Every Business Needs: A Capital Agenda for confidently facing digital disruption,
difficult investors, recessions and geopolitical threats:
1. Focus on a small number of metrics that reflect an outside-in perspective and tie directly to creating
shareholder value

2. Employ consistent evaluation criteria and objective processes for all investment decisions

3. Establish a “cash culture” that prizes cash flow and does not tolerate unnecessarily tying up capital

4. Take a zero-based budgeting approach to deploying capital

5. Practice continuous improvement by examining each investment and implementing lessons learned

6. Embed stress testing across capital allocation to strengthen resilience

7. Align capital allocation, strategy and communications

8. Maintain information systems that generate granular data

Is your capital allocation strategy driving or diminishing shareholder returns? | 1

1
Can we react quickly
enough to opportunities
and threats?

Ultimately, a company’s capital allocation practices should support then find ways to obtain the data to measure those drivers. Consider
the long-term strategic plan and create flexibility to re-prioritize what internal management reports are being produced that did not
investments when situations change. exist two years ago. If the company is reviewing essentially the same
information, it may be standing still in a fast-moving environment.
What can executives do to improve their reaction times?
If the data does not exist internally, third-party sources can be
In our experience, the most significant barriers that impede agility are
employed. Companies can also use emerging analytical capabilities
rooted in predicting outcomes and making decisions with inadequate
to assess relationships between nontraditional and unstructured
data, having a culture and incentive system that lack a cash focus,
data — such as weather, location data and consumer sentiment
and being unable to take risks at the right time and in the right way.
ratings. Bringing together these disparate information sources
provides a more complete picture of future prospects and can help
Data dilemma executives more accurately assess the value of an acquisition target
and other investment opportunities.
Financial and operational data are key strategic assets. But 41%
of CFOs cite insufficient data as one of the primary barriers to the If the company has sufficient data, but cannot use it effectively, the
optimal allocation of capital, as shown in Figure 3. The roots of this solution may be employing tools for improved and consistent data
data gap can range from not capturing enough data to lacking the analysis, such as robotic process automation, which can evaluate a far
tools to efficiently analyze the data. greater amount of data more quickly than humans can on their own.
Data should be the solution, not the problem, so companies first Data visualization tools can also make the presentation of key value
need to define what drives profitable growth in their business and drivers much more clear.

Figure 3. What are the primary barriers to your company’s optimal

allocation of capital? (Select all that apply)
Create a cash culture
Sometimes there is not enough capital for all initiatives that meet
Insufficient data 41% a company’s approval criteria. We are often surprised by how many
companies lack the cash culture necessary to optimize capital
Lack of monitoring
41% allocation. They wind up with capital — including human capital —
performance
trapped in unproductive uses, such as in underperforming or noncore
Ineffective execution business units, or in jurisdictions where moving or repatriating capital
35%
of projects
is structurally difficult.
Ineffectiveness of models
28% As noted in The Stress Test, CEOs, CFOs and boards need to establish
or decision frameworks
a culture that prizes cash flow and does not tolerate unnecessarily
Inability to accurately
prioritize projects
19% tying up capital. This includes liberating excess working capital and
monetizing noncore assets such as excess real estate, surplus R&D
Internal politics and biases 13% projects and off-strategy brands. Conducting regular portfolio
reviews can help businesses identify assets that are ripe for
divestment. Companies are taking heed on this front: the latest EY
Global Capital Confidence Barometer survey shows two-thirds of
companies are now reviewing their portfolio at least every six months.

2
Intelligently take on risk Still, one-third (33%) of CFOs surveyed say all approved initiatives,
independent of risk profile or time horizon, are owned by the business
Agility enables a company to quickly take on higher-risk/higher-return unit that requested them.
investments that can help it become a disruptor, rather than being
disrupted. Examples include Target’s investment in online delivery Holding higher-risk investments at the corporate level or in a
service Shipt and General Motors’ investment in self-driving vehicle venture capital fund promotes long-term thinking by allowing
company Cruise. business unit management “the freedom to fail” without affecting
short-term performance.
The vast majority of CFOs invest in these types of higher-risk
investments, though the manner in which such investments are
structured and accounted for in each organization varies significantly
and greatly affects decision-making. For example, if all investments
are owned by the business unit, initial expected losses could Case study
negatively impact short-term compensation for business unit
leaders and may discourage long-term thinking.
How Honeywell leverages data
That may be why 41% of CFOs in our survey say higher-risk
investments are owned at the corporate level, so that short-term
to optimize its portfolio
losses do not hurt business unit financials. Meanwhile, 23% say
Honeywell regularly conducts portfolio reviews. In
higher-risk investments are proposed and owned by the company’s
October 2017, the company announced two divestments
venture capital fund, as shown in Figure 4.
representing close to US$7.5 billion in revenues. At the
time, new CEO Darius Adamczyk said the divestments
Figure 4. How do you manage longer-term and higher-risk investments, were the result of a review that was “objective and fact-
such as emerging technologies or startups?
based, involving extensive analysis and input from industry
experts and participants as well as from our shareowners.
Higher-risk investments are The foundation of the announcement was a set of criteria
33% owned at the corporate level … against which each business was measured.” He
All approved projects are noted the optimized capital structure resulting from the
owned by the business unit that
divestments and said he was excited to invest in any of the
requested them
company’s four remaining platforms.
Proposed and owned by the
41% company’s venture capital fund The approach even won praise from a prominent activist
We currently do not invest in shareholder who had pushed for a different path but
23% these higher-risk investments said he was pleased the board and management chose
to conduct a thorough portfolio review and agreed that
3% Honeywell should narrow its business focus.

Is your capital allocation strategy driving or diminishing shareholder returns? | 3

 Key considerations for CEOs, CFOs
and boards:
• Develop a robust, data-based model for making
capital allocation decisions and stress-test the
model to see how it reacts to various scenarios
• Perform portfolio reviews at least annually to find
assets that can be divested in order to fund more
strategic initiatives; a portfolio review approach
can also be applied to operating expense budgets
to deprioritize inefficient or ineffective spending in
order to fund value-creating strategic initiatives
• Strongly consider holding high-risk, high-reward
investments at the corporate level or in an internal
venture capital arm to avoid concerns from
business unit leaders that these investments will
harm short-term performance
• Balance the risk profile of the overall business;
higher-risk, higher-return investments can be
offset by lower-risk/lower-return investments
when necessary; this enables a company to
take necessary chances for future growth while
maintaining an overall risk profile that is acceptable
to the business and investors

4
Case study

How Disney adapts to convergence and disruption

Disney provides an example of balancing flexibility and risk. The company has maintained a well-communicated capital
allocation strategy over the years that has helped it adapt to convergence and disruption in the media and entertainment
industry. Its investments have included organic projects and M&A with a variety of risk profiles:
• L
 ower-risk/core investment — Parks and Resorts (e.g., the Shanghai Disney project, new attractions at Orlando and
Anaheim locations, new cruise ships)
• L
 ower-risk/core M&A — the acquisition of film studios Lucasfilm and Marvel, which drive Disney’s filmed entertainment
performance while also providing valuable, popular intellectual property for use in consumer products, theme parks and
elsewhere across the portfolio
• H
 igher-risk/technology-driven M&A — the acquisition of the BAMTech streaming video platform from Major League
Baseball Advanced Media; BAMTech now serves as a big accelerant to Disney’s pivot to a direct-to-consumer strategy
• H
 igher-risk/technology-driven investment — part ownership of the Hulu streaming video property, which requires
significant amounts of cash to maintain its high growth
Disney has demonstrated this agility while maintaining a strong balance sheet, evidenced by significantly less leverage
and the highest credit rating among its peers. Disney’s approach appears to have been rewarded by the market: over
the past five years, Disney has outperformed both peers and the market; its annual total shareholder return of 13% was
approximately 300 basis points higher than the averages by its peer group and the S&P 500.

Is your capital allocation strategy driving or diminishing shareholder returns? | 5

2 Are we making objective,
unbiased decisions?

In an ideal world, all capital allocation decisions would be unbiased

and based on empirical data. But decisions are made by people,
who can have their own inherent biases: a preference to invest in a
business line they developed; “shiny object syndrome” that steers
capital to “trophy” acquisitions or investments that do not create
sustainable value; overestimating the benefits or the probability of
success; or preferring short-term benefits to long-term value creation.
Only 40% of CFOs say they have a consistent process that is always
Pursuing growth or size in spite of profits destroys value; companies
overpaying for acquisitions and repurchasing shares may raise EPS
without creating real value.

Figure 6. What key metrics are used to assess projects?

Internal rate of return (IRR) 68%

followed and is free from bias and internal politics, as shown in Return on assets (ROA) 65%
Figure 5.
Return on equity (ROE) 64%
Figure 5. Are capital allocation decisions made on an objective basis?
Return on invested capital
(ROIC)
58%

Benefit-cost ratio, etc. 57%

Sometimes Impacts on P&L 53%

Yes
56% 40% Net present value (NPV) 51%
Rarely
Economic profit/economic
49%
value added (EVA)

4%
Qualitative metrics 23%

Use the right metrics Set the right hurdle rates

Consistent and appropriate metrics help maintain understanding Companies also need to set appropriate hurdle rates for different
of risks and returns across disparate capital uses. Two commonly types of investments based on their risk profiles. Using a single
used metrics are internal rate of return (IRR) for evaluating new discount rate for all investment opportunities will result in
investments and determining the value of current assets, and return underfunding initiatives with a lower required cost of capital, and
on invested capital (ROIC) for determining the performance of existing overinvesting in those with a higher capital cost. Similarly, companies
assets, as shown in Figure 6. may misprice or fail to pursue acquisitions and reject fair offers for
businesses that should be divested.
Companies can choose other metrics, but they should avoid
revenue growth and earnings per share (EPS), two commonly cited Ultimately, choosing proper metrics helps encourage decisions that
metrics that only indirectly and imperfectly relate to value creation. deliver attractive long-term returns.

6
 Key considerations for CEOs, CFOs
Instill a culture that supports healthy debate and boards:
Once the appropriate metrics are chosen, they should be consistently • Apply appropriate outside-in metrics both to
applied to all investment decisions. Then management should decision-making and to monitoring the programs
challenge assumptions in the data by benchmarking against the once the capital is allocated
results from previous similar investments, using both internal and
external examples. Management needs to ask: “What would need to • Establish a culture that encourages healthy
be true for this project to succeed?” or, alternatively, “What are the debate in order to challenge assumptions and
reasons this project will fail?” investment theses
Executives need a framework to assess the underlying rationale • Regularly review the portfolio from an outside
for each potential investment, the assumptions inherent in the investor perspective for both acquisition needs
investment case and any potential negative implications. But to and divestment opportunities
make the debate effective, companies also need to include diverse
representation from marketing, manufacturing, IT and even outside • Routinely conduct a postmortem to learn how well
the company to discuss an investment’s merits. the decision-making process aligned with results;
apply lessons to future decisions
This culture is set from the top: CEOs and CFOs need to make sure
it is clear they are seeking different viewpoints, not just tolerating
them. Some companies even set up a contrarian team to make a case
against a project to ensure all viewpoints are considered as a way to
combat confirmation bias such as having data or assumptions picked
specifically to support a project. Monitor performance
The capital allocation process doesn’t end when a decision is made.
Tie it to incentives Proactive performance monitoring and a mindset of continuous
improvement are critical to extract value, quickly identify issues and
Companies also should make sure management incentives, long-term
fix them. If there is no fix, leadership needs to consider ending the
strategy and investment evaluation criteria are aligned, but 42% of
investment rather than incurring further losses. However, 41% of
CFOs say they have no such alignment.
CFOs say they don’t sufficiently monitor performance.
Tying compensation to cash flow and other measures of long-term
We also recommend postmortem analyses in order to understand past
value creation, rather than solely focusing on EPS or quarterly
challenges — such as how effectively synergies were achieved in an
accounting metrics, can foster long-term thinking throughout the
acquisition — and to enact future measures that will create, or protect,
company. These types of incentives, along with embracing a culture
value. This review should include both initiatives that were funded and
of value creation and continuous improvement from the C-suite to the
initiatives that were rejected, as well as share repurchase programs.
shop floor, are key ingredients to the recipe for sustainable growth
and total shareholder return outperformance.

Is your capital allocation strategy driving or diminishing shareholder returns? | 7

3 Are we returning cash to
shareholders at the right
time and in the right way?

Activist investors often push for companies to return cash to

shareholders and can encourage companies to make short-term
decisions to accomplish this. Rather than treating share repurchases
as a separate category, companies should view buybacks through the
same lens as any other potential investment.
Warren Buffett’s guidance on repurchasing shares is instructive here.
He said that under most circumstances, companies should buy back
stock only when the share price is well below intrinsic value and when
Meanwhile, almost two-thirds (63%) of CFOs say they repurchased
shares to fulfill shareholder or analyst expectations or to increase
earnings per share. Although this may result in a short-term boost to
the stock price, it will likely hamper long-term growth as there is less
capital available to invest in sustainable value creation opportunities.
Repurchasing shares is an arbitrage opportunity, so CFOs should
consider if they would purchase the shares of a similar company at
the same valuation if all other considerations were the same. They
cash exceeds operational and liquidity needs. That does not preclude should ask if the current stock price is lower than the intrinsic value
buying back shares altogether. In fact, Buffett’s Berkshire Hathaway that management can achieve.
bought back stock in 2018, though that was the first time in six years
Companies also repurchase shares to offset the dilutive effect of
that it made such a purchase.
stock option grants. Stock-based compensation is often seen as
But only 10% of the CFOs we surveyed say they repurchased shares “cash-less” compensation, but it is a very real expense for
because their business was undervalued in the market. Another 24% shareholders. Repurchasing shares at a premium to intrinsic
say they repurchased shares because they had cash in excess of what value in order to offset dilution can destroy shareholder value.
was needed to fund with an acceptable return, as shown in Figure 7.
Gain investor trust
Figure 7. What is the primary motivation for buying back shares in To avoid pressure to repurchase shares, managers need to earn
excess of the dilutive effects of options? investor trust and then demonstrate how the company plans to
invest capital in other value-creating ways, such as developing a
new product line, making an acquisition, improving technology or
31% enhancing antiquated facilities. The best way to earn this trust is by
To fulfill shareholder/analyst
expectations establishing a track record of successful investment decisions that
Increase earnings per share
are made using a replicable process.

24% We have cash in excess of As Doug Giordano, Pfizer Senior Vice President, Worldwide
investment opportunities with Development, said in The Stress Test, “If investors see you as
an acceptable return prudent stewards of capital and you’re actually beginning to reap
32% Our business is currently some current benefit from past investments, they will give you more
undervalued by the market of an opportunity to invest for the long term. If you start to lose that
10% credibility, investors are going to want their money back sooner, in
3% Not applicable
the form of dividends and repurchases.”

8 31%
Key considerations for CEOs, CFOs and boards:
• Evaluate share repurchases with the same criteria as other investment decisions
• Determine if the stock is actually undervalued in the market and if cash exceeds operational and liquidity needs
• Show that you are an effective steward of investors’ capital in order to lessen pressure to repurchase shares

Case study

Foot Locker: Evaluating dividends, buybacks as part of larger capital

allocation strategy
Foot Locker was considering increasing its dividend and share repurchase program as part of refreshing its capital
allocation plan. Management wanted to maintain sufficient financial flexibility to execute its strategy while also
maintaining the company’s current credit rating. Among the steps that helped management’s decision process were:
• Assessing the company’s liquidity profile, including the projected cash balance, with adjustments for offshore cash
repatriation expense and pension funding
• Identifying key strategic alternative uses for the company’s capital as part of the company’s plan to return cash
to shareholders
• Analyzing the ROIs achieved by past repurchases in relation to the company’s cost of equity
• Commissioning an independent analysis of the company’s intrinsic value
• Developing a weighted average cost of capital (WACC) model and a company threshold for capex returns with
a spread above WACC
• Understanding the relationship between the company’s dividend policy and its expected EPS growth rates
With this thorough, data-based analysis, management better understood the relationship between various capital
structure elements and was able to make an informed decision on when and how to return cash to shareholders.

Is your capital allocation strategy driving or diminishing shareholder returns? | 9

 Time to act
This article is based on the EY survey of 536 global
Clearly there can be barriers to optimal capital allocation, including
inadequate data, poor execution of the right decisions, cultural CFOs of companies that generate more than US$1
biases and failing to learn from previous decisions. But, as our CFO billion in annual revenue, as well as our experiences in
survey shows, getting capital allocation right is essential. Ineffective helping clients prioritize the use of financial resources to
capital allocation can lead to slow growth, declining profits and create a balanced and strategically aligned portfolio that
lower levels of value creation. This can make a company a target for can help increase shareholder value. EY teams can
a hostile acquisition or activist intervention, throwing the future of help you:
management, board members and the company in doubt.
• Create a capital allocation strategy
Fortunately, executives can take steps to make sure that capital
allocation is driving — instead of diminishing — sustainable growth. • Develop an objective, fast-paced approach
• I nstill a cash culture that avoids tying up capital in unproductive • Implement data-gathering systems and analytics
investments but rather maximizes cash flow to quickly react to and evaluate performance
opportunities and threats.
• Assess long-term impact
• B
 ase decisions on rigorous, objective analysis centered on the
data and metrics that support long-term thinking.
• A
 pply capital allocation processes across all potential investments
(e.g., M&A, organic growth, debt repayment, dividends and share
repurchases) to filter out bias and defend against pressure to make
decisions that may look good in the short term, but will stymie
long-term growth.
A robust capital allocation strategy can drive attractive returns
for shareholders, enabling access to capital and providing more
opportunities to gain a competitive advantage.

0.8125”

S NEEDS A Capital Agenda for confidently facing

Further reading
digital disruption, difficult investors,
T
ecommendations for

recessions and geopolitical threats

CASEY
BASNAYAKE
HOOD
KROUSKOS
GREENE

ed with EY over the he Stress Test Every Business Needs: A

overed in this book.” Capital Agenda for confidently facing digital
disruption, difficult investors, recessions and
geopolitical threats is a comprehensive approach

THE
to creating value and flexibility in an increasing-
ly volatile business environment that presents
’s guide to strategic

STRESS
both great risks and opportunities every day. The
e lessons ‘on the job’.” authors extend the banking stress test concept to
a company’s “Capital Agenda”—how executives
manage capital, execute transactions, and apply
corporate finance tools to strategic and operational
and act differently to
EVERY BUSINESS NEEDS

In our new EY book, The Stress Test Every Business Needs: A Capital Agenda for confidently facing
decisions. Long-term success comes from building

TEST
and inorganic.” resilience into each element and in the way those
President and Chief elements interact.
THE STRESS TEST

The book considers traditional macroeconomic,

sovereign-risk, and commodity-related shocks
utives it is a salutary
as well as how to deal with technological disrup-
ompetitors argue for

digital disruption, difficult investors, recessions and geopolitical threats, the authors extend the banking
tion, hostile takeovers, and activist shareholders.

EVERY
e professionals seek- Companies that make poor strategic decisions or
ghly recommended.” underperform operationally—even in a benign eco-
nomic and geopolitical climate—will likely find them-

BUSINESS NEEDS
itigroup, Inc.
selves facing great stresses, not only from downside
provides actionable risks but from missed opportunities as well.
ition integration and

stress test concept to a company’s “Capital Agenda” — managing capital, executing transactions, and
Drawing upon the experience of an international

Corporation
JEFFREY R. GREENE group of EY Transaction Advisory Services col-
leagues, the book challenges readers to think dif-
WITH ferently about many of the issues facing company
c. The authors have
matters capital. In a
STEVE KROUSKOS executives today, including:

very C-suite. ” JULIE HOOD • Setting corporate strategy in a digital world

applying corporate finance tools to strategic and operational decisions.

University HARSHA BASNAYAKE • Pre-empting activist shareholders

by EY’s Transaction
WILLIAM CASEY • Using advisors wisely
• Proactively managing intrinsic value
ties with a balanced
• Allocating capital across the enterprise
very Business Needs
• Acquiring and divesting for optimum value
morrow.
• Liberating excess cash
• Integrating strategy, finance and operations to
realize a company’s full potential

ey.com/capitalagenda
ECONOMICS/General
Time and time again, EY’s Capital Agenda frame-
USA /$48.00 CAN
work has proven to be a valuable tool to help boards
and management teams make better, more informed
decisions in today’s ever-changing markets.

10
How we can help

Capital Agenda — helping you

find answers to today’s toughest How you manage your Capital Agenda today will define your competitive position tomorrow. We
strategic, financial, operational work with clients to create social and economic value by helping them make better, more-informed
and commercial questions. decisions about strategically managing capital and transactions in fast-changing markets.

How can we raise the capital How can we seize

Invest
Raise

needed to future-proof growth opportunities and

the business? competitive advantage?
The
Capital
Agenda

How can we better anticipate How can we make certain

Optimize
Preserve

and adapt to market our portfolio is operationally

conditions as they change? fit for the future?

Connected Capital Solutions Whether you’re preserving, optimizing, raising or investing, our Connected Capital Solutions can
help you drive competitive advantage and increased returns through improved decisions across all
aspects of your Capital Agenda.

$
Strategy Corporate Buy and Sell and Reshaping
finance integrate separate results

Enabling fast-track Enabling better Enabling strategic Enabling strategic Helping you transform
growth and portfolio decisions around growth through portfolio management, or restructure your
strategies that help you financing and funding better-integrated and better divestments organization for
realize your full potential capital expansion and operationalized to help you maximize a better future by
for a better future and efficiency acquisitions, joint value from a sale enabling business-
ventures and alliances critical and capital
investment decisions

Is your capital allocation strategy driving or diminishing shareholder returns? | 11

12
 Contacts
Evan Sussholz
EY Americas Corporate Finance Leader
+1 312 879 3680
evan.sussholz@ey.com
Follow me on LinkedIn

Jeff Greene
EY Corporate Development Leadership Network Leader
+1 212 773 6500
jeffrey.greene@ey.com
Follow me on LinkedIn

Rob Moody
EY UK and Ireland Corporate Finance Leader
+44 7769 648730
rmoody@uk.ey.com
Follow me on LinkedIn

Samar Obaid
EY Middle East and North Africa Corporate Finance Leader
+962 6 580 0777
samar.obaid@jo.ey.com
Follow me on LinkedIn

Andre Toh
EY Asia-Pacific Corporate Finance Leader
+65 6309 6214
andre.toh@sg.ey.com
Follow me on LinkedIn

Special thanks to additional authors:

Ben Hoban, Mike Lawley and Dana Nicholson.

Is your capital allocation strategy driving or diminishing shareholder returns? | 13

EY | Assurance | Tax | Transactions | Advisory
About EY
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services. The insights and quality services we deliver help build trust
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over. We develop outstanding leaders who team to deliver on ourpromises
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About EY’s Transaction Advisory Services

How you manage your capital agenda today will define your competitive
position tomorrow. We work with clients to create social and economic
value by helping them make better, more-informed decisions about
strategically managing capital and transactions in fast-changing markets.
Whether you’re preserving, optimizing, raising or investing capital,
EY’s Transaction Advisory Services combine a set of skills, insight and
experience to deliver focused advice. We can help you drive competitive
advantage and increased returns through improved decisions across all
aspects of your capital agenda.

The views of the third parties set out in this publication are not
necessarily the views of the global EY organization or its member firms.
Moreover, they should be seen in the context of the time they were made.

© 2018 EYGM Limited.

All Rights Reserved.

EYG no. 012499-18Gbl

1809-2902019
ED None

This material has been prepared for general informational purposes only and is not intended to
be relied upon as accounting, tax or other professional advice. Please refer to your advisors for
specific advice.

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