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Opinions and views from expert CFOZone members.

Tag >> career/management
May 05
2010

Golden parachutes only seem to get bigger

Posted by SherylNash01 in severance packagesexecutive perksexecutive compensationcareer/management

SherylNash01

After nine months of service, Jeffrey Schwartz resigned in 2008 as chairman and CEO of ProLogis, an operator of distribution and warehouse facilities. He walked away with a $6 million separation agreement, representing two times his annual salary and target bonus and another $7.5 million to replace the equity grant he received only nine months earlier. These were options that were granted with a term of 10 years, but were paid out in cash in less than one year.

Such payments in this economic climate raise the eyebrows of folks like Greg Ruel, research associate for governance research firm, The Corporate Library, who wrote a recent research report on severance payments. The Corporate Library looked at severance packages during proxy years 2008 and 2009. In total, more than $315 million was paid out to CEOs across the 125 severance packages examined for the report. That figure includes only cash paid to settle contractual salary and bonus arrangements, and does not incorporate other monies gained upon termination of employment, such as equity profits or pension and deferred compensation increases. The average severance package for 2009 was $2.62 million, up 9 percent from $2.40 million in 2008.

May 02
2010

Time for companies to get serious about lead directors

Posted by SherylNash01 in corporate governancecorporate boardscareer/management

SherylNash01

Despite pressure to improve corporate performance, US companies have been slow to embrace the role of lead director. But critics contend that is a mistake.

Six years after the New York Stock Exchange mandated the presiding director position as a result of the corporate scandals of the last decade, little consensus has emerged regarding the roles presiding or lead directors should undertake and how they can act most effectively to improve the governance and performance of their companies. The reform was created as a compromise between having a board with no leader of its independent directors and mandating that every company have a nonexecutive chairman.

Apr 30
2010

Dow Chemical making life difficult for analysts

Posted by MQuinn in financial reporting, earnings, compliancecareer/management

MQuinn

By remaking itself through acquisitions and divestitures, Dow Chemical hasn't made life easy for those inside its finance department. And so, apparently, they've decided to share the pain with investors and analysts following the chemical manufacturing giant.

Apr 28
2010

Vast majority of CFOs have no succession plan

Posted by MQuinn in turnoversuccession planningrecruitingCFOscareer/management

MQuinn

I have the privilege of assembling our weekly CFO Moves column, so the finding of a new survey that the vast majority of finance chiefs haven't identified their successor doesn't really surprise me. I've seen a lot of press releases stating, "The company is considering both internal and external candidates to fill the position."

Still, the percentage of companies with no CFO succession plan is pretty staggering. The aforementioned poll of 1,400 CFOs by Robert Half Management Resources found that 83 percent have not identified a successor for their position.

Apr 26
2010

How to tell good risk from bad?

Posted by SherylNash01 in risk managementRiskcareer/management

SherylNash01
 

When risk is a four-letter word, as it is today, CFOs are damned if they take it and damned if they don't. 

But discouraging the right type of risk taking is a fundamental flaw in conventional risk management, according to Rick Funston, a principal with Deloitte and co-author of the recently published book, Surviving and Thriving in Uncertainty: Creating the Risk Intelligent Enterprise.

Apr 24
2010

Accounting firms pinching pennies, too

Posted by Going Concern in Feescareer/managementauditorsAccounting

Going Concern

Submitted by Daniel Braddock, republished from Going Concern, Accounting News for Accountants and CFOs.

Because times weren't already cheerful enough around Grant Thornton, they recently released a study that found businesses are generally pessimistic about raises and bonuses this year.

Apr 20
2010

Paying bonuses whether it rains or shines

Posted by SherylNash01 in executive compensationcorporate governancecareer/managementbonuses

SherylNash01
 

More companies are using judgment as well as set performance targets to incentivize top managers during uncertain times, a recent survey finds.

In a survey last June of 230 major US corporations, consultancy Mercer found that 26 percent either said they would increase judgment related to short-term incentives last year or that they planned to do so this year. Nineteen percent either said the same thing in connection with long-term performance plans.

Apr 20
2010

The futility of market watching

Posted by MQuinn in stock marketmediaGoldman Sachs, earnings, career/management

MQuinn

Covering daily stock market movements must be a lousy job. Today's news wire stories from Reuters on Goldman Sachs' earnings are a prime example of why.

Apr 19
2010

Companies still risk averse despite improved revenue outlook

Posted by SherylNash01 in risk managementRiskeconomycareer/management

SherylNash01
 

While companies are growing more optimistic about their prospects, they are unlikely to unleash significant new capital spending any time soon, a new survey finds.

Of nearly 1,200 respondents to PricewaterhouseCooper's 13th annual global CEO Survey, 31 percent said they were very confident about their companies' prospects for revenue growth over the next 12 months, up from 21 percent last year. But they remain hesitant to spend their cash.

Apr 19
2010

Clawbacks quickly catching on

Posted by Stephen Taub in Riskrestricted stock, Kenneth Feinberg, compensationclawbackscareer/management

Stephen Taub

 T. Rowe Price has joined a growing list of companies that have voluntarily instituted clawback policies.

The mutual fund giant Friday announced in a regulatory filing that if it needs to undergo a material restatement of its financial results within three years of the original reporting, the Board will take certain actions if it determines any executive officer received incentive compensation, including equity awards, based on the original financial statements that in fact was not warranted based on the restatement.

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