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Tag >> Credit suisse
While much of the focus of the pending tax cut package seems to be on the reductions and breaks for individuals, there are some goodies tucked in for corporations as well.
They include a two-year extension of the research and development credit, which covers employment costs of employees involved in research, and $22 billion for accelerated depreciation, which allows companies to write off all of their costs of assets placed in service after September 8, 2010 and through December 31, 2011, in one year. This will be followed by 50 percent bonus depreciation for assets purchased during 2012.
According to a report on Reuters, on Monday Treasury Secretary Timothy Geithner said that the government should not be involved in setting corporate executive pay levels.
What impact, if any, this will have on how regulation of compensation plays out is unclear, but it does once again bring to the fore the arguments on both sides of the executive pay discussion.
It could turn out to be the strike felt across the world. When employees at Chinese electronics manufacturer Foxconn went on strike earlier this summer, the ramifications were not immediately obvious. Their demands for better pay and conditions were met with a 30 percent hike in salaries.
This has now encouraged workers in many other Chinese companies to follow suit. The result? Western companies are being squeezed as their China costs rise, which they cannot offset with higher prices in their home markets. Some manufacturers are even relocating plants back to the US as a result.
Let's face it. Even if you love the health care bill, you have to concede it will be very costly. Someone must pay for guaranteeing that those with pre-existing conditions are covered and lifetime caps are lifted.
And it is mostly going to be corporations; small businesses with at least 50 employees; individuals who earn at least $200,000 (couples at $250,000), many of whom are deemed to be rich by the left but to be hard-working successful people by most others; and those with so-called Cadillac insurance plans, except, of course, union workers who typically vote Democrat.
CFOs around the world are looking on in a mixture of admiration and jealousy at the success of a former member of the ranks. Tidjane Thiam, CEO of the U.K.'s Prudential PLC is in the process of trying to pull together what must be the biggest deal of his life. The potential $35 billion takeover of AIA will at a stroke convert the company from a rather staid UK life insurer into a fast growing Asian financial services behemoth.
This is not the way that text books say it should happen. Generally when a CFO is elevated to the CEO position - as happened to Thiam in the middle of last year - it is usually because there is some dreadful financial crisis looming that only an experienced CFO can really manage. Indeed the promotion of the CFO to the CEO position is likely an admission that there will not be any major strategic moves, rather a relentless of pursuit of cash, debt repayments and risk hedging.