CFO, The Magazine for Senior Financial Executives articles from April 2003

CFO, The Magazine for Senior Financial Executives archives from April 2003

They are out to get you. (From the Editor).(Brief Article)
April 1, 2003... WITH THE PAST MONTH FEATURING AN SEC INVESTigation of former Capital One CFO David Willey, charges against two more Enron executives, and whispers that Bernie Ebbers probably knew about accounting fraud at WorldCom, it's clear that we haven't...

Shareholders take control. (Letters to the Editor).(Letter to the Editor)
April 1, 2003... IN YOUR MARCH INTERVIEW WITH NELL Minow ("The Prime of Ms. Nell Minow"), CFO asked, "Why has it been so hard to get shareholders to act?" Shareholders (the true owners of Corporate America) are entitled to and should have the legal right to...

Made as instructed. (Letters to the Editor).(Letter to the Editor)
April 1, 2003... IF ROBERT HERZ HAS HIS WAY ("QUEStions of Value," February), he will bring down an entire profession of auditors and accountants in a fashion that even Arthur Andersen, Enron, and their ilk could not have conceived. Accounting professor Charles...

The truth is worse. (Letters to the Editor).(Letter to the Editor)
April 1, 2003... DIAL 'O' FOR OUTSOURCING"" (TECHwatch, February) cited overpayment of telecom expenditures by 10 percent on average. We review the taxes on telecom bills, and the picture is substantially worse. Taxes may make up 20 percent of a telecom bill....

Begging to differ. (Letters to the Editor).(Letter to the Editor)
April 1, 2003... RICHARD WAKSMAN, IN HIS LETTER to the editor (February), said we should "prohibit all senior executives from selling the stock gained through the exercise of options until one year after they have ended their employment with the firm. That way,...

Planning for the future. (Letters to the Editor).(Letter to the Editor)
April 1, 2003... YOUR ARTICLE EXPLORING THE DRUDgery and ineffectiveness of five-year plans ("The Five-Year Itch," February) is, no doubt, an accurate assessment of most CFOs' experience with developing them. This need not be. Scenario planning is a key...

Correction.(Correction Notice)
April 1, 2003... In "Staying Put" (March), we incorrectly identified the location of Grist Associates. The firm is in Hinsdale, Illinois.

From all of us. (Financial Reporting).(lower-level employers are increasingly being required to certify their financial numbers to management)
April 1, 2003... SOON THE CFO AND THE CEO won't be the only ones in your company suffering sleepless nights. Unnerved by the Sarbanes-Oxley Act's requirement that senior managers certify financial statements, a growing number of firms are requiring...

Pay pals. (News Watch).(Public Company Accounting Oversight Board members criticized for voting themselves large compensation packages)(Brief Article)
April 1, 2003... Who says nonprofits don't pay well? While scandals at a number of companies have forced a closer examination of executive-compensation practices, a new corporate-watchdog group has caused a stir with compensation excesses of its own. ...

Universal disagreement. (Auditing).
April 1, 2003... WHEN UNIVERSAL HEALTH Services Inc. asked CFO Kirk Gorman to resign in February at the urging of its auditor, KPMG LLP, analyst Nancy Weaver of investment-banking firm Stephens Inc. downgraded the stock, but not because she thought the ousting...

Putting faith in blind trusts. (Executive Compensation).(officers at Hyperion Solutions Corp. are putting executives' stock options and company stock into individual brokerage accounts to help earn trust of investors)
April 1, 2003... EXECUTIVES AT HYPERION Solutions Corp. think that the way to earn investors' trust is to go the way of the blind trust. So officers at the Sunnyvale, Calif.-based enterprise-software firm have agreed to put their stock options and company stock...

The new math. (Stock Options).(Financial Accounting Standards Board decides to overhaul accounting for employee stock options)
April 1, 2003... The Financial Accounting Standards Board's decision in March to overhaul employee stock option accounting will undoubtedly encounter fierce rear-guard resistance from those unequivocally opposed to expensing options. But others see the writing...

The currency of time. (Debt Management).(some companies are breaking loan covenants and receiving wavers)
April 1, 2003... IN MARCH, The Goodyear Tire & Rubber Co. announced it was getting a much-needed cash infusion from JP Morgan Chase & Co. and Citigroup Inc. The banks promised a $1.3 billion asset-backed credit facility with just one catch: it is contingent on...

This is not your beautiful house. (Accounting Fraud).(Securities and Exchange Commission takes steps to improve receipt of fines)
April 1, 2003... In late February, the Securities and Exchange Commission filed civil fraud charges against eight former and current managers of Qwest Communications International Inc. Among the punishments the SEC is seeking to impose are civil money penalties...

Besieged by spam: junk E-mail can be "filtered" inexpensively, but the costs don't stop there. (Tech Watch).
April 1, 2003... FROM THE NIGERIAN CIVIL SERVANT hoping to move millions of dollars to offshore havens (with your help) to pitchmen hawking herbs and procedures that promise improbable anatomical transformation, junk E-mails now waste a few precious minutes of...

Art of the auction: soliciting bids is an effective way to sell a business--but review your strategy first. (New Deals).
April 1, 2003... WHEN FITNESS-MAGAZINE PUBLISHER Weider Publications was put up for bids late last year, the owner of the National Enquirer, American Media, flexed its financial muscle with a winning $350 million offer. Meanwhile, The Blackstone Group was...

Questionable yield: the white house wants dividends to be tax-free. But will companies pay out? (Spotlight Taxes).
April 1, 2003... ELIMINATING THE DOUBLE TAX on corporate dividends--the centerpiece of George W. Bush's latest tax plan--is by no means a new idea in Washington, having been kicked around in one form or another at least since Jimmy Carter's Administration. This...

Fraud squad: federal investigators are on a crusade to elevate corporate misdeeds to criminal offenses. (Cover Story).(Cover Story)
April 1, 2003... S. ATTORNEY PATRICK MEEHAN hasn't yet caught any companies engaging in the fraudulent accounting tactics that Enron used to boost revenues. But should one turn up in the Philadelphia jurisdiction where Meehan represents the Department of...

The dry season: it's desperate days for young companies, as the venture-capital industry tries to regroup.
April 1, 2003... LIKE MANY TALENTED entrepreneurs, Henry White is a serial founder. Still only 41, White has already been involved in four start-ups. The first was profitably sold. The second was melded into a roll-up. The third grew to $100 million in annual...

Take your pick: as congress weighs reforms, employees may get help with choosing specific 401(k) investments. (Buyer's Guide 401(k) providers Part 1).(U.S. 401 (k) plans being remolded)
April 1, 2003... BRACE YOURSELVES. If Congress approves legislative reforms, you'll have to review, if not revise, your 401(k) plan design. True, lawmakers failed to enact a virtually identical bill last year, despite railing against Enron's management for...

Holes in the Net? Insurers' woes are mounting--and your company's coverage may be at risk. (Special Report Insurance).(Reliance Insurance Co. management)
April 1, 2003... The scary thing about the demise of Reliance Insurance Co. was the sheer speed of it. As recently as December 1998, the property/casualty company was reporting a $1.7 billion statutory surplus, the biggest in its 181-year history. That same...

The case against cases: Enron's popularity as a business-school "success story" raises tough questions about how cases are prepared. (Education).(Enron Corp.'s management)
April 1, 2003... WHEN AN ACCOUNTING SCANDAL FELLED ENRON Corp., it turned many MBA cases featuring the erstwhile high-flier into scrap paper. "For the most part," says accounting professor John Shank, who is affiliated with both Babson College and Dartmouth...

Who's next? (Grooming a Replacement).(succession planning for chief financial officers)
April 1, 2003... MOST CFOs KNOW THAT their job, like life itself, is somewhat tenuous. They could get a great job offer from another company, be hit with a dire family emergency, or find themselves tapped as CEO tomorrow--all eventualities that focus attention...

David Cosper is Ford Motor Credit's new CFO. (CFOs On The Move).(chief financial officer)(Brief Article)
April 1, 2003... David Cosper is Ford Motor Credit's new CFO, replacing Bibiana Boeria, who becomes strategy and finance director at Ford's international operations.

America Online, the Internet arm of AOL Time Warner Inc. (CFOs On The Move).(Stephen Swad named chief financial officer)(Brief Article)
April 1, 2003... America Online, the Internet arm of AOL Time Warner Inc., appoints Stephen Swad to the CFO spot, replacing Joseph Ripp, now vice chairman of AOL.

C. Christopher Gaut, formerly CFO of Ensco International Inc. (CFOs On The Move).(Halliburton Co. appoints chief financial officer)(Brief Article)
April 1, 2003... C. Christopher Gaut, formerly CFO of Ensco International Inc., named CFO of energy-services firm Halliburton Co.

U.S. Steel Corp. (CFOs On The Move).(Gretchen R. Haggerty named chief financial officer)(Brief Article)
April 1, 2003... U.S. Steel Corp. names Gretchen R. Haggerty CFO, replacing John R Surma Jr., who became president of the company on March 1.

Down with the ship. (Grape Vine).(RMS Titanic Inc. struggles with lawsuits, declining revenues)
April 1, 2003... AS THE SOLE possessor of rights to salvage the Titanic's treasures, OTC-traded RMS Titanic Inc. had hoped to make its fortunes by exploiting those of the legendary wreck. Today, though, the company's executives, including CEO Gerald Couture,...

Willey or won't he. (Grape Vine).(David Willey resigns as chief financial officer of Capital One Financial Corp., may face insider-trading charges)(Brief Article)
April 1, 2003... At worst, it's the most blatant insider-trading violation in recent memory; at best, it's one of the dumbest stock sales ever. David Willey, informed by the Securities and Exchange Commission that he may face insider-trading charges, resigned...

Get real.(Securities and Exchange Commission will challenge pension funds with unreasonable rates of return)(Brief Article)
April 1, 2003... The SEC says it will challenge companies with pension funds that assume rates of return of 9% or more. (News Watch)

Outside stance.(Brief Article)
April 1, 2003... 29% of large companies surveyed by hewitt say they intend to increase their number of outside direction in 2003. (Newswatch)

Foggy foresight.(only small percentage of companies have confidence in their forecasts)(Brief Article)
April 1, 2003... Just 9% of companies say they have confidence in their forecasts, according to research by The Hackett Group. (News Watch)

Global piracy.(United States lost $9.2 billion in 2002 due to piracy of intellectual property)(Brief Article)
April 1, 2003... Global piracy of intellectual property cost the U.S. $9.2 billion in 2002, says the international intellectual property alliance. (News Watch)