CFO, The Magazine for Senior Financial Executives articles from August 2005

CFO, The Magazine for Senior Financial Executives archives from August 2005

Pay at private companies.(employee stock options)(Brief Article)
August 1, 2005... As public companies steer clear of stock-option compensation, smaller and often nimbler private businesses are finding it easier to compete for executive talent. Indeed, one recent survey reports that despite the advent of FAS 123(R), private...

Sweating it out.(from the editor)
August 1, 2005... IN THE LAZY, HAZY, CRAZY DAYS OF SUMMER, A CFO's thoughts can turn to life after work--especially given the very long hours logged by the typical finance executive. It may come as a surprise to learn that many CFOs worry that they have not...

Unhealthy doughnuts.(letters to the editor)(Letter to the Editor)
August 1, 2005... GOOD ARTICLE ON KRISPY KREME Doughnuts Inc. ("Kremed!" June), but I think it could have been even harsher. KKD tripled its store base in the five years after going public. Many of the openings were in new markets. As long as the company was...

True independence.(letters to the editor)(Letter to the Editor)
August 1, 2005... TIM REASON'S ARTICLE "FEELING the Pain" (May) is thought provoking. Sarbanes-Oxley requires public companies to beef up their independent directors. This is akin to putting the cart before the horse, since there is no reliable way to identify...

Who's driving this bus?(Letter to the Editor)
August 1, 2005... AT THE VERY LEAST, DAMAGED PARties should be able to prosecute for fraud the CEOs and CFOs who claim they didn't know what was going on in their companies (From the Editor, May). The charge: misrepresenting their ability to run the corporations...

When integrity and honesty went missing.(letters to the editor)(Letter to the Editor)
August 1, 2005... IN "WHAT DOES YOUR CEO REALLY Know?" (May) Mike Jackson, chairman and CEO of AutoNation, claims that former Enron CEO Kenneth Lay and the board granted former CFO Andrew Fastow "an exemption from conflict-of-interest rules; then no one tried to...

Premature obit.(Letter to the Editor)
August 1, 2005... YOUR ARTICLE "THE DANGER OF Deferrals" (Newswatch, April) captured our attention. As a provider of customized nonqualified plans, we at TBG Financial believe that your obituary of deferred-compensation plans is premature. While Section 409A of...

A simple yardstick.(Letter to the Editor)
August 1, 2005... AS A RETIRED CHIEF EXECUTIVE/VICE president/general manager with almost four decades of experience in manufacturing for the consumer-electronics industry, I suggest that the Financial Accounting Standards Board adopt the following simple...

Correction.(letters to the editor)(Correction Notice)
August 1, 2005... Our June Spotlight on Insurance ("Infinite Risk?") incorrectly described the impact of a finite-insurance transaction with General Reinsurance on American International Group's financial results. The article should have stated that the...

Payback?(crime against Milberg Weiss Bershad & Schulman LLP)(Brief Article)
August 1, 2005... Talk about getting a dose of its own medicine. Milberg Weiss Bershad & Schulman LLP, the law firm that has profited handsomely from lawsuits against companies accused of securities fraud, is in some hot water of its own. A former client of...

Behind shadow accounts.(Executive Comp)
August 1, 2005... Of THE ALLEGED MISDEEDS THAT FORMER MASSMUTUAL CEO Robert J. O'Connell stands accused of, none has stirred as much outrage as his alleged abuse of a notional, or unfunded, account set up to track his deferred compensation. O'Connell, who was...

Slacker alert.(newswatch)
August 1, 2005... SLACKER ALERT: Employees waste an average of 2 hours each workday, costing employers $759 billion annually, says a survey by AOL and Salary.com

Targeting underfunded plans.(Pensions)
August 1, 2005... WITH U.S. CORPORATE PENSION plans facing a record $450 billion shortfall, legislation that would force firms to contribute more to those plans is steaming ahead this summer. In January, President Bush proposed that sponsors fully fund...

States to the rescue?(HEALTH CARE)
August 1, 2005... As employers and employees struggle to afford consistently rising health-care premiums, the number of uninsured workers across the country is increasing. With no end in sight, some states are stepping up to provide assistance. States are...

Gon in 60 days.(newswatch)
August 1, 2005... GONE IN 60 DAYS: Employers have from August 1 to September 30 to apply for a tax-free federal subsidy for retiree pharmacy benefits.

Not in my backyard.(Shareholder Meetings)
August 1, 2005... AN INCREASING NUMBER OF CORPOrations are moving their shareholder meetings away from headquarters. Over the past five years, 8 of the 50 largest public companies in Minnesota, including Northwest Airlines, U.S. Bancorp, and Imation, held their...

Boardroom baddies.(CORPORATE GOVERNANCE)
August 1, 2005... Do you have a problem child on your board of directors? If you do, expect to take some heat from The Corporate Library. The independent research firm that provides corporate-governance data is singling out underperforming board members and...

End of an era.(newswatch)
August 1, 2005... END OF AN ERA: Because of FAS 123(R), 75% of firms in a Deloitte survey are reducing the number of stock options they grant.

Going public, eh?(IPOs)
August 1, 2005... FACED WITH A CHALLENGING REGUlatory environment and a lukewarm market for IPOs in the United States, some U.S. companies are heading north to Toronto, using an increasingly popular vehicle known as an income security to make their public debut....

The best-laid plans.(SARBOX)
August 1, 2005... Can budgeting, planning, and forecasting be considered internal controls? And if so, are they subject to Section 404 of the Sarbanes-Oxley Act? Within days of the act's passage, it seemed, opportunistic marketers were touting...

The best in IR.(newswatch)
August 1, 2005... THE BEST IN IR: EOG Resources, Noble, and Dell topped the list for investor-relations effectiveness in a survey by Greenwich Associates.

Laws without borders.(Tax)
August 1, 2005... A RECENT SUPREME COURT RULING could expand the application of the wire-fraud statute to cover foreign-tax evasion. The case, Pasquantino et al. v. United States, involved the smuggling of liquor from the United States into Canada, but it could...

Cash from trash.(ACCOUNTING)(operating cash flow)(property, plant, and equipment)
August 1, 2005... Insurance reimbursements for damaged property, plant, and equipment (PP&E) may be boosting operating cash flow (OCF) at some firms by millions of dollars a year. But according to a recent report, the classification of the cash flies in the face...

The long way home.(newswatch)
August 1, 2005... THE LONG WAY HOME: Executives' commutes are almost twice as long (42 mins.) as those of other workers (24 mins.), says The Ladders.com.

Sensors working overtime: wireless tracking devices are radically transforming how businesses monitor vital equipment.(techwatch)
August 1, 2005... IS THAT WAREHOUSE ABOUT TO COLLAPSE? IS THAT turbine about to throw a blade? Is that on well going to explode? [paragraph] All good questions, particularly if you happen to be standing nearby. But for managers at asset-intensive businesses,...

Wi-Fi in the sky.(Mobile Computing)
August 1, 2005... MODERN AIR TRAVEL IS A WONDERful thing, especially if you like pretzels, endless reruns of"Whose Line Is It Anyway?" and thimble-sized bottles of Scotch. Of course, many executives eschew such in-flight fineries, preferring instead to work. But...

Gone clubbing: as private-equity firms band together to buy large companies, they raise the pressure on CFOs.(new deals)
August 1, 2005... WHEN PRIVATE-EQUITY FIRMS GO "CLUBBING," it's not to the latest hot spot. This past March, seven blue-chip private-equity groups announced that, as a syndicate, they would put up close to $11.3 billion to purchase data-processing and...

Keeping an eye on third parties: outsourcing the management of workers' comp programs poses hidden perils.(SPOTLIGHT: insurance)
August 1, 2005... SELF-INSURING WORKERS' compensation risks can be a good move if companies manage the risks well and estimate their liability accurately. Self-insurers can pay less to cover their exposures, and have a powerful incentive to prevent injuries from...

Are you ready for retirement? For many CFOs, life after work may not be a day at the beach.(Chief Financial Officer)(Cover Story)
August 1, 2005... When Guy Alton, CFO of St. Bernard Hospital in Chicago, thinks about retirement, he doesn't envision long strolls on the beach or leisurely tours of the Italian Riviera. Instead, the 53-year-old Alton wonders whether he can cover the basic...

The price of a cheap suit: companies spend millions to assess overseas suppliers. So why are they still missing so many problems?
August 1, 2005... IT'S 10:00 P.M., and Charlie Kernaghan is driving around the garment district in Dhaka, Bangladesh. It's well past quitting time for the fabric cutters and seamstresses who started work in the factories at 8 o'clock that morning. But the...

Hidden in plain sight: leasing may soon have to be justified on economic terms alone.(accounting)
August 1, 2005... THE SECURITIES AND EXCHANGE COMMISSION doesn't like lease accounting, and it's not going to take it any more. In a June report on off-balance-sheet activity commissioned by Congress as part of the Sarbanes-Oxley Act of 2002, SEC staff" argued...

Background checks: worries about personnel integrity are creating a few worries of their own.(human resources)
August 1, 2005... AFTER HER INTERVIEW WITH A LARGE ACCOUNTING firm, Lila Beckford got a verbal offer for a job as a senior financial consultant. Told to expect a written offer pending a background cheek, she signed the required authorizations allowing her...

The ties that bind.(PASSIONATE PURSUITS)
August 1, 2005... JERRY STRAUB'S PASSION FOR THE SEA WAS LONG IN coming. Not until this year, his 28th with Viking Yacht Co., did he buy his first boat (christened SeaFO). [paragraph] Indeed, Straub first interviewed at the yacht maker in response to a blind ad...

Siemens Corp.(CFOs On The Move)
August 1, 2005... German electronics giant Siemen Corp. has a new finance chief, naming company veteran Heribert Stumpt to the post effective October 1....

American International Group.(CFOs On The Move)
August 1, 2005... Troubled insurer American International Group has appointed Two new finance team members, David Herzog as comptroller and Robert Gender as treasurer....

Abercrombie & Fitch Co.(CFOs On The Move)
August 1, 2005... Apparel purveyor Abercrombie & Fitch Co. has picked Michael Kramer, former CFO of Apple Computer Inc.'s Retail division, to be its finance head....

US LEC.(CFOs On The Move)
August 1, 2005... J. Lyle Patrick is the new CFO at telecommunications carrier US LEC....

PanGo Networks Inc.(CFOs on The Move)
August 1, 2005... PanGo Networks Inc., an RFID tag Maker, has named Susan Ledoux to the top finance job.

End of an era.(grapevine)
August 1, 2005... AFTER 38 YEARS WITH General Electric Co., Dennis Dammerman, vice chairman and former CFO of the Fairfield, Connecticut-based conglomerate, will retire at the end of the year. "Now is as good a time as any," says Dammerman, 59, who served...

CFOs talk, CEO walks.(grapevine)
August 1, 2005... If there is any lesson for CFOs to learn from the stunning acquittal of former HealthSouth Corp. CEO Richard Scrushy, it may be to keep mum a little longer. With all five former HealthSouth CFOs facing jail time as Scrushy walks, the case is...