CFO, The Magazine for Senior Financial Executives articles from October 2006

CFO, The Magazine for Senior Financial Executives archives from October 2006

Social studies.(from the editor)
October 1, 2006... FOR CENTURIES, economists have debated the best way to make money. Writing about British industry around 1763, Adam Smith famously asserted that companies should focus solely on their returns; "the invisible hand" of the marketplace would...

Public info, faster and easier.(letters)(Letter to the editor)
October 1, 2006... We write in response to Alix Nyberg Stuart's insightful piece on interactive data ("XBR-what?" August). Based on the comments at the Securities and Exchange Commission's June roundtable, we share the author's view that companies filing their...

Toxic torts.(letters)(Letter to the editor)
October 1, 2006... I am a physician/toxicologist who has been actively involved in toxic tort matters for 30 years ("Problem Solvent," August). The benzene issue is like many we have seen before--extraordinarily low doses of a potentially dangerous agent...

Further thoughts on dividends.(letters)(Letter to the editor)
October 1, 2006... Your article "Learning to Love Dividends" (Insight, August) is timely and well documented. Please let me offer some further thoughts: (1) To reward investors, share buybacks should be made at depressed prices. (2) The reinvestment of dividends...

Missing the mark on "Missing the Mark".(letters)(Letter to the editor)
October 1, 2006... It appears that your September Topline article "Checkups on Providers Miss the Mark" did not consult a CPA and used a person in a competing industry as its "expert." It's not really that surprising that a security consultant who can't provide...

Hidden energy costs.(letters)(Letter to the editor)
October 1, 2006... Thanks for an informative article on alternative fuel technologies and the financing and profitability problems they face ("Power Source," July). There's one aspect of the story that's misleading, however. Comparisons were made among...

Leasing isn't "gotcha" finance.(letters)(Letter to the editor)
October 1, 2006... The article "(Don't) Look Deep into My Lease" (July) incorrectly portrays lease financing while obfuscating obvious facts. The article infers that a "buyout" option at the term of a lease is unfair when the lessee seeks permanent use of the...

Rating underfunded plans.(PENSION REFORM)
October 1, 2006... TO THE EVER-EXPANDING LIST OF PENSION HEADACHES, add this one: credit ratings. The Pension Protection Act of 2006, an almost 1,000-page bill that President Bush signed into law in August, sets a funding target of 100 percent for...

Take it from the top.(HEALTH CARE)(Private equity firms in healthcare game)
October 1, 2006... PRIVATE-EQUITY FIRMS are getting more involved in the healthcare game, and not just from the acquisition side. To cut costs, they're buying health-care plans for their portfolio companies. The Riverside Co., a private-equity firm with three...

Politics and the R&D credit.(TAX)
October 1, 2006... LOBBYISTS REPRESENTING AMERICAN industry are keeping busy this fall. Representatives from a variety of technology and manufacturing associations are pushing to convince senators to extend the expired Research & Experimentation Tax Credit, also...

Wanted: finance experience.(AUDIT COMMITTEES)
October 1, 2006... Despite the Sarbanes-Oxley requirement that audit committees have at least one member who qualifies as a "financial expert," many are still headed by an individual with no experience as a CFO or in public accounting, even at the largest firms...

Two steps over the line?(LEGAL)(Corporations complaining over methods of federal prosecution)
October 1, 2006... CORPORATIONS HAVE LONG COMPLAINED about the methods federal prosecutors use to gain cooperation in white-collar investigations. Now those complaints have been voiced both on the federal bench and in Congress. In September, a Senate...

Ticker symbols with pizzazz.(QUIZ)(companies are choosing tickers that reflect their products or brand image)(Brief article)
October 1, 2006... IN AUGUST, HARLEY-DAVIDSON changed its ticker symbol from HDI to HOG, the nickname for its motorcycles. "The new ticker symbol captures the spirit of what Harley-Davidson is air about--the fun of riding motorcycles," said CFO Tom Bergmann in a...

Where to stash the cash.(TREASURY)(Association for Financial Professionals)
October 1, 2006... WITH COMPANIES CARRYING an increasingly large amount of cash on their balance sheets, some are looking for a more diverse mix of short-term investments than the traditional troika of money funds, bank deposits, and commercial paper. In...

In case of emergency.(TRAVEL)(Company's safety for travelling employees)(Brief article)
October 1, 2006... WHEN TROPICAL STORM ERNESTO HIT FLORIDA in August, Bill Franklin, manager of travel for Mitretek Systems, was busy tracking how many of the company's employees were in its path. With the help of an interactive database, Franklin could see their...

Deficit retention disorder?(GOVERNMENT)(Brief article)
October 1, 2006... AT THE END OF LAST MONTH, the federal government played its own version of "pretend you're not home when bill collectors call." For nine days, from September 22 to 30, the government put a hold on Medicare payments to health-care providers. The...

They're not pay pals.(DIGITAL PAYMENT)(Brief article)
October 1, 2006... YOU MIGHT BE ABLE TO BUY a grilled-cheese sandwich on eBay with what looks like an image of the Virgin Mary seared into it, but don't try to pay for it with Google Checkout. Google's new online-payment option joined a list of about 30...

Pverbatim.(top line)
October 1, 2006... "Boards would be better served if the CFO had a fixed [pay] package and had absolutely no incentive [to backdate options]." --IRS COMMISSIONER MARK EVERSON TESTIFYING BEFORE THE SENATE FINANCE COMMITTEE ON SEPTEMBER 6

Business outlook survey: U.S. CFOs see trouble ahead.(by the numbers)
October 1, 2006... OPTIMISM AMONG CFOs HAS HIT ITS LOWEST POINT since the last recession, according to the latest Duke University/CFO Business Outlook Survey. Just 20 percent of finance chiefs are more optimistic about the direction of the U.S. economy, down from...

What do cataracts have to do with the cost of doing business in China?(VIEW FROM asia)(Editorial)
October 1, 2006... THIS SUMMER I WAS ON HAND to help shoot a documentary in Qinghai province. The film chronicled the efforts of a Hong Kong charity to bring eye surgery to this forgotten part of China on the Northern Tibetan plateau. Because the land of parched...

Rush to judgment: many experts predicted Hewlett-Packard's merger with Compaq would become yet another M&A disaster. What did they miss?(insight)(Editorial)
October 1, 2006... WAS CARLY FIORINA embracing a disastrous "bigger is better" strategy when she engineered the 2002 merger of Hewlett-Packard Co. with Compaq Computer Corp.? Many at the time, both on Wall Street and within HP, saw the deal as Fiorina's Folly....

Core values: IBM unveils a new pricing plan for its software to mixed reviews.(in tech)(International Business Machines Corp.)
October 1, 2006... SINCE THE DAWN OF THE Industrial Revolution, a steady chorus of Luddites, doomsayers, and social critics has voiced concerns about the impact of technology on mankind. Usually, this concern has come in the form of a simple question: At what...

The plane truth: as they flew US Airways through bankruptcy, managers of the old America West reduced the fleet and sparked an industry trend.(deals)
October 1, 2006... FROM FUEL PRICES TO terrorism threats, in recent years the list of woes sapping profits from airlines and driving some into bankruptcy could fill volumes. But in one sense, a single problem says it all: too many planes. Excess capacity...

Lee Ainslie not hedging a bit.(ON THE RECORD)(Interview)
October 1, 2006... HEDGE-FUND MANAGERS HAVE ALWAYS BEEN A SHY BREED. They like to guard their strategies--and their identities--closely. But lately, government regulators have been trying to cast more light on the mysterious ways of hedge funds. Everyone from...

Virtue rewarded: companies are suddenly discovering the profit potential of social responsiblity.
October 1, 2006... When former Vice President Al Gore shows up at Wal-Mart headquarters, you have to wonder what's going on. As it turns out, Gore had been invited to visit the retailer in July to introduce a screening of his documentary about global warming, An...

Pay dirt: as the SEC shines a light on executive compensation, will companies clean up their acts or find new ways to hide excess.(COMPENSATION: PART 1 OF 3)
October 1, 2006... As Pfizer Inc. shareholders assembled in Lincoln, Nebraska, last April for the company's annual meeting, there was a buzz in the air--literally. A small plane circled overhead, pulling a banner that read, "Give It Back Hank!" [paragraph] The...

Corporate capital's new course: rising costs, conflicts, and concerns over the availability of capital will complicate its pursuit.
October 1, 2006... Ever since the stock-market bubble burst five years ago and the cost of equity soared, the availability of capital has become a greater concern for corporate-finance executives. Luckily, debt has plugged the gap left by equity's decline, thanks...

Are your secrets safe? A shift in banks' business model raises questions about conflicts.(THE STATE OF BANKING & FINANCE)
October 1, 2006... If you're like most finance executives, you don't lie awake at night worrying about the nefarious things your bankers might be doing with your company's private information. But some recent developments suggest that corporate clients should not...

A change of season: don't let a turn in the credit cycle catch you napping.(THE STATE OF BANKING & FINANCE)(Corporate borrowings)
October 1, 2006... Darren Wells knows a good deal when he sees one. The senior vice president for business development and treasurer of $19.7 billion Goodyear Tire & Rubber Co. seized on favorable credit-market conditions in 2003 to restructure approximately $3.3...

The 2006 CFO survey of trends in banking: finance executives' concerns about the banking industry.(THE STATE OF BANKING & FINANCE)(Editorial)
October 1, 2006... After several years of easy credit, the relatively idyllic conditions that have characterized companies' dealings with their banks may be coming to an end. So suggests a CFO survey of 261 finance executives for this special report on banking...

The big get bigger: banks are still your best option in under-writing.(THE STATE OF BANKING & FINANCE)
October 1, 2006... When Google went public in 2004, the initial public offering was conducted as an Internet-based Dutch auction, an approach widely seen as disempowering investment banks. A case before the U.S. Supreme Court in which the very existence of...

Pain-and-a-half: what's behind the startling rise in overtime lawsuits? Confusion, collusion, and a dash of retribution.(spotlight)
October 1, 2006... FILE IT UNDER "NO GOOD DEED goes unpunished." Two years ago, when the Department of Labor revised the Fair Labor Standards Act (FLSA), the intent was to clear up confusion regarding overtime pay. Instead, the always-thorny matter of who...

Take my desk--please; by rethinking office design, companies are cutting real-estate costs by nearly half.(real estate)
October 1, 2006... REMEMBER 1999, when big companies rushed to imitate the dot-coms by crafting hip workplaces? Suddenly, relaxed dress codes, refrigerators full of Diet Coke and Snickers bars, and dogs in the halls made the corporate life seem a little less...

A chance to direct: self-directed IRAs offer a wide range of investments--and an even wider list of rules.(your money)(individual retirement accounts)
October 1, 2006... WHEN PATRIOT Federal Bank, a community bank based in Canajoharie, New York, went looking for start-up capital last year, CFO Vince Fazio tapped into an unlikely source: individual retirement accounts. While the humble IRA will never be confused...

Follow the leaders: many CFOs owe part of their success to mentors, and want to repay the favor.(your move)
October 1, 2006... WHEN RUSSELL Lavoie walked into the accounting office of Epsco Inc. as an MBA student in 1984, the 24-year-old had no idea that another recent hire, CFO Chuck Dockendorff, was about to give him a real education. "He took me aside one day...

Bowne & Co.(CFOs ON THE MOVE)
October 1, 2006... Bowne & Co. is adding a veteran of the Big Screen to its C-suite by appointing John Walker as CFO. Walker was previously CFO of Loews Cineplex Entertainment, now part of AMC Entertainment....

Midland.(CFOs ON THE MOVE)
October 1, 2006... Cincinnati-based insurer Midland is protecting its finances by promoting treasurer W. Todd Gray to CFO. He replaces John Von Lehman, who plans to retire....

Allied Healthcare International.(CFOs ON THE MOVE)
October 1, 2006... David Moffatt will be taking care of Allied Healthcare International as its new CFO. He joins the company from Monster Worldwide....

Abraxis Bioscience.(CFOs ON THE MOVE)
October 1, 2006... Lisa Gopalakrishnan, former CFO of Intermix Media, is the new finance chief of Abraxis Bioscience, replacing interim CFO Ronald Pauli....

Refco.(CFOs ON THE MOVE)
October 1, 2006... Commodities brokerage Refco is getting back on its feet with the help of Jerry Lombardo, its new CFO. The company has been under Chapter 11 bankruptcy protection since last year. Lombardo replaces Gerald Sherer, who was dismissed earlier this...

Hallmark Financial Services.(CFOs ON THE MOVE)
October 1, 2006... Mark Morrison is parlaying his finance credentials into the corner office as CEO of Hallmark Financial Services. He is succeeded by Jeffrey Passmore, who was appointed principal financial officer....

Tivo.(CFOs ON THE MOVE)
October 1, 2006... Tivo will now record Steve Sordello as its new finance chief. Sardello was previously the CFO of Ask Jeeves....

Family Dollar Stores.(CFOs ON THE MOVE)
October 1, 2006... Family Dollar Stores is in the market for a new CFO since R. James Kelly was promoted to president and COO.

A CFO in bloggerspace.(grapevine)
October 1, 2006... WHILE IT SEEMS LIKE NEARLY EVERY 15-year-old with a computer has her own blog, the cultural phenomenon hasn't been conspicuous among finance folk. But now they may finally be joining the conversation. In August, Tom Berquist, CFO of...

Wear it loud, wear it proud.(grapevine)(new T-Shirts by My Calling to appreciate accounting profession)(Brief article)
October 1, 2006... There have been some indications that accounting is back in favor as a career. Now there's solid proof: "Future Accountant" T-shirts have lately been spotted on college campuses and elsewhere. The shirts are part of an apparel Line from...