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Corporate enterprises develop specific systems of r ewarding managers for successful performances. By taking into account the need of creating shareho lder value, it is necessary to implement method for measuring performance that would satisfy the objectives of shareholders and managers’ interests. The optimal compensation model assumes t hat managers are motivated to create added value for shareholders. One method for modeling the reward system is economic value added (EVA). Economic value added represents a very attra ctive instrument for measuring corporate performances and its management. The subject of thi s paper was the analysis of the economic value added in function of creating incentive systems for managers, as well as the advantages and disadvantages of application of this method. Econom ic value added was presented as a concept that brings the objectivity in the system of modeling lo ng-term incentives for managers and, thereby, reduces the risks associated with the incentive sys tem.

Economic value added in function of determining incentive compensation systems