CFO, The Magazine for Senior Financial Executives articles from July 2004

CFO, The Magazine for Senior Financial Executives archives from July 2004

Giving at the office.(donations for political campaigns)(Brief Article)(Editorial)
July 1, 2004... LAST JANUARY, WHEN A PIPE BURST IN THE BASEMENT OF my house, I had the bright idea of trying to plug the leak by attaching a garden hose to the rupture. It worked beautifully for 15 seconds; then the water shot out twice as fast from three new...

One small step for NASA ...(letters to the editor)(Letter to the Editor)
July 1, 2004... THE TONE OF "NASA, WE HAVE a Problem" (May) may have misled your readers about the state of financial management at the National Aeronautics and Space Administration. We have encountered serious challenges with our conversion to an...

Manipulating the numbers.(letters to the editor)(Letter to the Editor)
July 1, 2004... I REALLY ENJOYED YOUR ARTICLE ON compensation in the June issue ("New Carrots, Old Yardsticks?"). At one point, you referred to a potential encouragement to cut costs at the expense of revenue and cash flow. To expand on that a bit, costs...

A three-legged stool.(letters to the editor)(Letter to the Editor)
July 1, 2004... YOUR ARTICLE REGARDING 401(K) provider fees was outstanding ("Raiding the Returns," May). While this is a big problem for plan fiduciaries, they most often do not have the tools or knowledge to deal with it. I see a lack of qualified...

From the horse's mouth.(letters to the editor)(Letter to the Editor)
July 1, 2004... YOUR ARTICLE "FORGET BLACK-Scholes?" (May) highlights the shortcomings of the Black-Scholes option-pricing model with respect to valuing employee stock options, citing the model's failure to consider factors such as lack of transferability and...

Tomatoes and bananas.(letters to the editor)(Letter to the Editor)
July 1, 2004... THE SIDEBAR "PAYING THE PIPER," IN "Looking under the Hood" (May), which dealt with the increased costs of audits due to Sarbanes-Oxley's Section 404 requirement, reminds me of an old grocery-store owner's saying: "What you lose on the tomatoes...

Correction.(Correction Notice)
July 1, 2004... Due to an editing error in the June story "The Backlash," Equitant was incorrectly described as being located in Dublin, Ireland, and Sacramento, California. The company is based in Dublin and Stamford, Connecticut. We regret the error.

Name game.(names of judges)(Brief Article)
July 1, 2004... Don't be surprised to see the names of jurors in the first Enron case pop up in press coverage of the trial. That's because a federal judge has denied the prosecution's request to keep them secret. U.S. District Court Judge Ewing Werlein...

Double standards?(Board Independence)
July 1, 2004... WITH ALL THE TALK ABOUT GOVERNANCE AND ACCOUNTability, you might assume that all public companies have a majority of independent directors on their boards. Well, not exactly. In fact, a surprising number of companies, including Primedia Inc....

Congress weighs in--again.(Stock Options)(bill to ask companies to expense options)
July 1, 2004... IT WAS BOUND TO HAPPEN. LEGISLAtion to derail the Financial Accounting Standards Board's plan to expense stock options has taken shape on Capitol Hill. The question is: will it have legs? In June, Rep. Richard Baker's (R-La.) bill to...

The tortinator.(Litigation Reform)(efforts to limit punitive damages)
July 1, 2004... Can California governor Arnold Schwarzenegger stem excessive jury awards against corporations? In May, his latest budget revision included an unexpected proposal to generate $450 million in state revenue by taking a 75 percent slice of...

Compliance creep.(Monthly Closes)
July 1, 2004... IT USED TO BE THAT SHORTER MONTHly closes were considered a best practice. But these days, shorter is relative. Thanks to increases in compliance demands and an internal focus on reliability, closes are actually getting longer. New data...

Giving structure to structured finance.(Banking laws)
July 1, 2004... In May, the Federal Reserve Board announced new guidelines designed to rein in banks' sales of complex securitizations known as structured finance. Such deals were at the heart of the fraud that ultimately destroyed Enron and were arranged by...

Where have all the audits gone?(Taxes)
July 1, 2004... FIRST THE SECURITIES AND EXCHANGE Commission got Congress to beef up its enforcement budget to stem the tide of corporate fraud. Now it looks like the Internal Revenue Service will be asking for similar consideration. Back in 1998,...

Take my car, please.(Fleet Management)(companies sell used cars to employees)(Brief Article)
July 1, 2004... Like many companies, Philips Medical Systems tried to sell its used corporate vehicles to employees before resorting to dealer auctions. That proved difficult in 2001: Detroit car makers were offering zero percent financing and "there were...

Director's cut: board members are turning to specialized software to help manage their affairs.(techwatch)
July 1, 2004... BOARD MEMBERSHIP MAY HAVE ITS PRIVILEGES, but in this era of increased regulatory scrutiny, it also has its risks. This is not to say that sitting on a board of directors is a bad gig. Serving on a board remains one of the most effective ways...

It's a rental!(Equipment Financing)(IT companies choose to lease equipment that buying)
July 1, 2004... AH, AMERICA--LAND OF THE FREE and home of the 36-month lease. Truth is, leasing has become something of an obsession with American consumers, many of whom lease Cayennes and Beemers and Lexus SUVs they couldn't otherwise get close to affording....

Won't get fooled again: burned by due-diligence failures, some companies install safeguards against merger surprises.(new deals)
July 1, 2004... FOR LOCKHEED MARTIN CORP., THE PATH TO acquiring Titan Corp. has taken some unexpected twists. A few months after agreeing to pay $2.4 billion in cash and stock for the San Diego-based defense contractor last September, Lockheed uncovered...

Better carrots? Big changes are under way in long-term incentive compensation, a new survey finds. But they may not be big enough.(Spotlight compensation)
July 1, 2004... EXPECTING A REVOLUTION IN LONG-TERM INCENTIVE pay? Don't hold your breath. [paragraph] Change, to be sure, is occurring. And more is inevitable, if the Financial Accounting Standards Board finally succeeds in requiring the expensing of at least...

Extreme makeover: how Robert Blakely and an army of accountants turned fraud-ridden WorldCom into squeaky-clean MCI.(Cover Story)
July 1, 2004... ROBERT BLAKELY had yet to accept the job as CFO of WorldCom Inc. when CEO Michael Capellas called on the evening of April 10, 2003. Creditors of the bankrupt telecommunications giant were meeting with Capellas and his team in New York the...

Office politics: banned from making political donations, companies harvest them from employees instead.
July 1, 2004... IT TOOK THE WATERGATE scandal to convince Congress to put an end to direct contributions from companies to federal politicians. It took 30 years and another scandal--Enron--to stop the resulting flow of so-called soft money from corporate...

Head games: businesses are deploying analytical software to get a better fix on customer behavior.(Special report: CRM)
July 1, 2004... CASINOS MAY BE GLITtering, neon-bathed temples to the cruel goddess of fortune, but when it comes to wringing money from wallets, casino operators leave precious little to chance. Consider Harrah's Entertainment Inc., a Las Vegas-based...

A matter of emphasis: Regulation G was supposed to end the abuses of pro forma reporting. Has it succeeded?(accounting)
July 1, 2004... WHEN THE SECURITIES and Exchange Commission issued Regulation G in January 2003, some people thought the death knell had been sounded for the abuse of pro forma numbers. From that date on, any non-GAAP number used in an earnings release...

Casting to type: more companies are using personality tests to assess job candidates and develop new hires.(human resources)
July 1, 2004... IF I'M EVER ASKED TO TAKE A HANDWRITING TEST FOR A JOB, I'll probably say no. That's because, according to handwriting and document examiner Ruth Holmes, my penmanship reveals that I am, among other things, stubborn, highly analytical, and...

You're on! Sharpening presentation skills.(chief financial officers workload)
July 1, 2004... THE STAMMERING, THE SWEATING, THE laptop that freezes and leaves the speaker stranded at the podium: presentations like this are the stuff of nightmares. Today, finance executives are presenting to everyone from employees to equity analysts,...

CFO Internet address directory.(chief financial officers)(Brief Article)
July 1, 2004... Ace Group www.acelimited.com AIG www.aig.com American Express www.AmericanExpress.com/ BusinessExtrAACard Ariba www.ariba.com/analyze Ariba www.ariba.com/service Ariba www.ariba.com/source Cognos...

IBM.(CFOs on the Move)(International Business Machines Corp.,)(Brief Article)
July 1, 2004... IBM's new CFO is Mark Loughridge, formerly head of IBM Global Financing. He replaces John Joyce, who takes over as SVP and group executive of IBM Global Services.

Cantor Fitzgerald LP.(CFOs on the Move)(Brief Article)
July 1, 2004... Cantor Fitzgerald LP has named Jay Ryan as CFO. He succeeds Jeffrey Chertoff, who resigned to pursue other opportunities.

SBC Communications Inc.(CFOs On The Move)(Brief Article)
July 1, 2004... SBC Communications Inc. CFO Randalt Stephenson has been named to the new post of CO0. Replacing him is Rick Lindner, formerly CFO of Cingular Wireless.

Dollar General Corp.(CFOs On The Move)(Brief Article)
July 1, 2004... Dollar General Corp. has named David Tehle as CFO, replacing James Hagan, who announced his resignation in March. For more on CFO careers, visit www.cfo.com.

Canary chorus.(cases of chief financial officers)(Brief Article)
July 1, 2004... HELL HATH NO FURY like a prosecutor scorned. Just ask Jamie Olis. The former vice president of finance at Dynegy Inc., a Houston-based energy company, pleaded not guilty to multiple counts of conspiracy and securities, mail, and wire fraud, and...

System failure.(grapevine)(Brief Article)
July 1, 2004... It's been seven months since the National Aeronautics and Space Administration discovered that it was missing $2 billion in taxpayers' money, and the agency still doesn't know what happened to it. That was the testimony of NASA CFO Gwendolyn...