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

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

Team spirit.(from the editor)(Letter to the Editor)
November 1, 2003... IT SOUNDS LIKE SUCH A SIMPLE, SELF-EVIDENT GOOD. YET, as anyone living in Boston, Chicago, Miami, or New York during this past playoff season will attest, team spirit can be divisive. Loyalties provoke rivalries, create conflicts, and foster...

Sarbox's unseen costs.(letters to the editor)(Letter to the Editor)
November 1, 2003... I APPLAUD YOUR ARTICLE DETAILING the costs the Sarbanes-Oxley Act of 2002 has imposed on public companies in the United States ("Sticker Shock," September). The article is one of only a few to raise the question of whether the costs of...

Microsoft on options.(letters to the editor)(Letter to the Editor)
November 1, 2003... MICROSOFT APPRECIATES THE opportunity to point out what we believe to be misleading conclusions in "Windows into Valuation" (Newswatch, September). The article attempts to compare the Black-Scholes value of Microsoft employee stock options to...

Thoughts on Black-Scholes.(letters to the editor)(Letter to the Editor)
November 1, 2003... AFTER READING YET ANOTHER article on the debate over the expensing of stock options ("Who Rules Accounting?" August), I have to wonder if I am the only one who likens the debate to a crowd of people discussing the fit and style of the emperor's...

Expensing flaw.(letters to the editor)(Letter to the Editor)
November 1, 2003... THE MOVEMENT TO FORCE THE expensing of options should be delayed and appropriately studied. If the Securities and Exchange Commission or the Financial Accounting Standards Board proposes fundamentally flawed actions, it may well be appropriate...

The root of the problem.(letters to the editor)
November 1, 2003... KRIS FRIESWICK'S ARTICLE "How Audits Must Change" (July) was well written and quite informative. I wonder, however, if the basis of the piece should have begun with the last sentence, which stated: "Critics say that perhaps [the American...

Correction.(letters to the editor)(Brief Article)(Correction Notice)
November 1, 2003... In the 2003 Working Capital Survey (September), results for Owens-Illinois Inc. appeared incorrectly because of an error by the data provider used by REL Consultancy Group and CFO. The company's correct 2002 numbers (and percentage change from...

Does not compute.(newswatch)(Brief Article)
November 1, 2003... Computer Associates International Inc.'s CFO and two other finance executives stepped down in October after an audit-committee report detailed revenue-recognition issues at the company for the fiscal year ended March 31, 2000. Some...

Reforming the big board.(Equity Markets)
November 1, 2003... THESE DAYS, everybody has an opinion about how to reform the New York Stock Exchange. In recent weeks, everyone from Fidelity Investments to the California Public Employees' Retirement System to state treasurers to the Securities and Exchange...

Watch your demeanor.(Regulation FD)
November 1, 2003... NOTE TO CFOs: Next time you talk with analysts in any setting, relax, stand up straight, and smile, smile, smile. That may be the message of the latest Reg FD enforcement action by the Securities and Exchange Commission. In September, the...

Goodbye to net income?(Accounting)(Brief Article)
November 1, 2003... Is this the beginning of the end of the income statement as we know it? In a September speech at a conference hosted by the New York State Society of Certified Public Accountants, Robert Herz, chairman of the Financial Accounting Standards...

Rolling out the little perks.(Benefits)
November 1, 2003... FACED WITH SKYROCKETING healthcare costs, many employers are making the counterintuitive move of offering employees more benefits. By adding an array of voluntary, employee-paid plans, companies hope to ease the pain of rising co-pays or...

FirstEnergy flunks typing and math.(Reporting)
November 1, 2003... It's been a tough few months for FirstEnergy Corp., an Akron-based energy utility. Still reeling from the continued shutdown, for safety reasons, of one of its nuclear facilities, the company has been accused of causing the massive blackout of...

Wall St. warrior.(Ten Questions)
November 1, 2003... ELIOT SPITZER seems bent on bringing another Wall Street giant to its knees. This time the 44-year-old New York Attorney General is targeting the mutual-fund industry, with a probe of late-day trading activities and market timing at Canary...

FASB eyes new disclosure.(Pension Plans)
November 1, 2003... FOR NOW, the Financial Accounting Standards Board seems to be deferring a major overhaul of pension-accounting rules in favor of new disclosure requirements for defined benefit plans. The exposure draft released in September proposes that...

You can take it with you.(Telecom)
November 1, 2003... Businesses are about to get a big break on wireless service, compliments of the Federal Communications Commission. Beginning November 24, the FCC will require wireless-phone carriers to allow subscribers to keep their phone numbers when they...

Junk food for dealmakers.(Debt Market)
November 1, 2003... AMERICAN INVESTORS pumped $103.4 billion into high-yield ("junk") bonds in the first nine months of 2003--more than twice the amount invested in the same period last year, according to research firm Dealogic, and on track to approach the record...

The end of split-dollar life?(Insurance)(Brief Article)
November 1, 2003... Final rules from the Internal Revenue Service could make many split-dollar life-insurance plans so tax prohibitive that they no longer make financial sense. Now many firms are scrambling to either fix them or terminate them completely. ...

Radio flier: Wal-Mart presents its vendors with an offer they can't refuse.(techwatch)
November 1, 2003... FORTY YEARS AGO, when Sam Walton was still an enterprising young merchant in northwest Arkansas, he'd buy products directly from manufacturers. Then he'd personally deliver the stuff to garages, where he stored the merchandise until it was...

Do not call waiting.(Regulatory Issues)
November 1, 2003... IT SEEMED to be going so smoothly, too. After years of debating and months of preparation, the Federal Trade Commission (FTC) finally had a rollout date for its much-ballyhooed Do Not Call Registry. The list, which contains more than 50 million...

The deal, unlocked: a controversial Delaware Supreme Court decision knocks down a tactic for sealing a merger agreement.(new deals)
November 1, 2003... IF THERE'S ANYTHING A DEALMAKER HATES, it's uncertainty. But thanks to the controversial Delaware Supreme Court decision in Omnicare Inc. v. NCS HealthCare Inc., more uncertainty in mergers and acquisitions may lie ahead. [paragraph] In a rare...

Unequal justice: the Bush administration's broad hope for tort reform now rests primarily on class-action legislation.(Spotlight: insurance)
November 1, 2003... WITH A REPUBLICAN in the White House and Republicans controlling both houses of Congress, prospects looked bright earlier this year for property/casualty insurers to achieve long-sought reforms of the civil-justice system. President Bush had...

Where credit is due: a new study of the largest issuers of corporate debt shows that recent gains in creditworthiness are more fragile than you think.
November 1, 2003... UNLESS YOU'RE WILLING TO BET THAT STOCK prices bear little or no relation to corporate financial strength, you're wise to take the recent improvement in the capital markets with a large grain of salt. In fact, a new study shows that major...

Work in progress: as mentoring and ethics training evolve, finance learns how to boost team spirit.
November 1, 2003... FROM Q-TIPS TO WISK laundry detergent, Unilever Home and Personal Care-USA produces a tool for almost every aspect of household management. And its finance organization seems no less thorough when it comes to helping its own 215 staffers manage...

Citi's new stance: tarnished by scandal, Citigroup wants its reputation to match its sterling financial performance, says CFO Todd Thomson.(A CFO Interview)
November 1, 2003... IN BUSINESS, NOTHING SPEEDS FORGIVENESS like success. Citigroup cranked out a record $4.1 billion in earnings from continuing operations in the first quarter of this year, and followed it with $4.3 billion the following quarter. That...

Borrowing big time: tighter credit and bigger deals are making asset-based loans more respectable.(Special report: treasury)
November 1, 2003... FOR STEPHEN FORSYTH, 2001 was a one-two punch to the gut. In the spring, the CFO of Stamford, Connecticut-based Hexcel Corp. saw an unprecedented drop in the global electronics industry wipe out $100 million--two-thirds of the annual revenues...

Drowning in data: a flood of corporate data, intensified by Sarbanes-Oxley compliance, threatens to overwhelm business managers.(Tech report: BI software)
November 1, 2003... RECENTLY, A MAJOR TECHNOLOGY VENDOR sent out questionnaires to senior business managers about data and decision-making. A number of them came back with additional comments, most of them variations on a theme: "Data is buried in a sea of noise"...

Rites of privacy: with the dust settling on Sarbox compliance in the public sector, eyes turn to private companies.(regulation)
November 1, 2003... MUCH HAS BEEN MADE IN THE PAST YEAR about the potential tab for complying with the Sarbanes-Oxley Act 2002, as well as the burden in terms of man-hours and liability. So it's logical to assume that any company that didn't have to comply...

Cashless contributions: are noncash assets really a smart way to fund pension liabilities?(pensions)
November 1, 2003... THE SAGGING STOCKMARKET performance of the past three years hasn't been kind to pension plans. By one estimate, companies are carrying underfunded pension liabilities in the neighborhood of $400 billion. And the economic environment that has...

The price they're paid: even without stock options, top finance chiefs are cashing in hefty pay packages.(compensation)
November 1, 2003... WHEN IT COMES TO compensating top CFOs, the times have changed even if the players have not. Consider James H. Hance Jr. In 2000, the Bank of America (BOA) finance chief and vice chairman topped our list of the 25 highest-paid Old Economy CFOs,...

Can it be learned?(Executive Charisma)
November 1, 2003... ASK FOR ADJECTIVES DESCRIBING A FINANCE CHIEF, AND "charismatic" doesn't normally leap to mind. When hiring, companies tend to value the candidate "who is appropriately serious and sober, and a big listener at the right time in the...

WebMD.(CFOs On The Move)(Brief Article)
November 1, 2003... Andrew C. Corbio was named EVP and CFO of WebMD, an Elmwood Park. N.J.-based online health media company. He succeeds interim CFO Kirk Layman, who will continue as EVP of administration....

Corte Madera.(CFOs On The Move)(Brief Article)
November 1, 2003... Patricia McKay was installed as CFO of Corte Madera, Calif.-based home-furnishings retailer Restoration Hardware. She replaces Kevin Shahan, who is now VP of financial planning and analysis....

Kforce Inc.(CFOs On The Move)(Brief Article)
November 1, 2003... Professional-staffing firm Kforce Inc. added CFO Derrell Hunter to its own staff. He succeeds Bill Sanders, who will continue as COO....

Drop and give me $20 million.(grapevine)(Brief Article)
November 1, 2003... PUSHUPS aren't required at the Boot Camp for Executives, but the break-'em-down-build-'em-back-up-again mentality of Marine Corps training is the hallmark of the business-reengineering program, run by The Tatham Group. In the two-day...

Franco Modigliani, 1918-2003.(grapevine)(Brief Article)
November 1, 2003... Corporate finance lost one of its most revolutionary thinkers on September 25, with the death of Franco Modigliani at the age of 85. The Italian-born economics professor, who had served on the faculty at the Massachusetts Institute of...

Searching for financial walks & stolen bases.(Book Review)
November 1, 2003... Michael Lewis' latest book, Moneyball, is all about finding value where the consensus does not. The book revolves around the unlikely success of the Oakland A's, who, in finance terms, consistently outperform the market with players (stocks)...