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"I greatly appreciated the personalized attention (the finance faculty) offered."
"I greatly appreciated the personalized attention (the finance faculty) offered."

Phd Success Story: Michael Ehrhardt

When Michael Ehrhardt was in ninth grade, testing revealed that he was best suited for a career in animal husbandry. Fortunately, college professor wasn't far behind livestock breeding on his list of likely occupations.

Since earning his PhD from Georgia Tech College of Management in 1984, Ehrhardt has served on the finance faculty at the University of Tennessee-Knoxville. Now the Paul and Beverly Castagna Professor of Investments, his educational impact has extended far beyond the school's campus. For example, he is co-author of Financial Management: Theory and Practice (now in its 13th edition), which is the market-leading MBA textbook on corporate finance in the United States.

Ehrhardt hadn't planned on a career in finance. He studied civil engineering at Swarthmore College, then enrolled in Georgia Tech's master's in industrial management program (which evolved into an MBA), graduating in 1978.

After working a stint in engineering for BellSouth, he joined Georgia Tech's Engineering Extension Division, offering engineering services for small businesses, schools, and other organizations. When the government paid Tech to conduct energy-conservation audits of companies, he was puzzled why many of those businesses didn't follow the recommendations – some of which were as simple as adding building insulation – when they ultimately added economic value.

"I finally figured out that it was a finance issue," Ehrhardt explains. "The managers that could have implemented them weren't getting compensated based on how much energy they saved."

Today, executive compensation is one of his main areas of research focus. Also studying corporate valuation, Ehrhardt has published in such prestigious publications as The Journal of Finance, Journal of Financial and Quantitative Analysis, Journal of Applied Corporate Finance, and Financial Management. He also received numerous honors for his teaching.

Deciding to pursue his PhD at Tech was an easy choice for Ehrhardt. "I'd already met the finance faculty during my master's studies, and I was highly impressed with them," he says.

That was the main factor. I greatly appreciated the personalized attention they offered.– Michael Ehrhardt

Intellectual freedom was a major motivator for Ehrhardt to pursue a career in academia. "Whenever I got good at something in the private sector, they just wanted me to keep doing the same thing," he says. "I wanted the freedom to choose my own projects."

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