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Clicking with CEO Trumps Meeting Financial Goals

CFO Magazine - 3 May 2017
For some reason, quite a few people pitching articles to CFO still feel compelled to point out to us that being a finance chief is “no longer all about the numbers.” Yes, we know. But even we were surprised by new research suggesting that from a CFO’s point of view, failing to meeting financial goals is nowhere near the surest way to get bumped from the role.
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How Millennials Can Find Work with a Purpose in Finance

CFO Magazine - 1 May 2017
Early career employees energize any organization. They help drive innovation and speed of progress through fresh perspectives and a hunger to learn. They’re technology forward and driven to quickly forge their mark in the workplace. They are, of course, well known as millennials — with their own career expectations and way of looking at life. Last year, they became the largest generation in the American workforce. As they begin to dominate the workplace, deeply understanding those expectations and making proactive changes based on them can contribute to your organization’s ability to attract and retain top talent at any level.
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Sales Incentives Are Powerful, So Use Them for Good

CFO Magazine - 28 April 2017
When Wells Fargo designed its incentive compensation program, leaders most certainly did not expect its impact: $185 million in fines; the firing of 5,300 employees; the clawback of $75 million in compensation from top former executives; the ouster of the CEO; and a global scandal in which as many as two million customer accounts were opened illegally.
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Durable Goods Orders Increase 0.7% in March

CFO Magazine - 28 April 2017
Orders for durable goods manufactured by U.S. companies rose for a third straight month in March but the gain was lower than economists expected and a category that reflects business investment plans remained weak. The Commerce Department said orders rose 0.7% last month, the weakest showing since a 0.9% drop in December. Economists polled by MarketWatch had expected a 1.4% advance.
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UPS' E-Commerce Investment Hits Profit

CFO Magazine - 27 April 2017
United Parcel Service’s first-quarter revenue beat estimates but the costs of adding facilities and services to accommodate e-commerce delivery weighed down operating profit. The company reported Thursday that revenue rose 6.2% to $15.32 billion while earnings per share increased 3.9% to $1.32. Analysts had been expecting revenue of $15.17 billion and earnings of $1.29 per share.
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How Dollar Shave Club Bested a Consumer Giant

CFO Magazine - 27 April 2017
How does a startup grab market share from consumer behemoth Gillette and develop a healthy recurring revenue model in the process? Dollar Shave Club launched with a viral video and an interesting idea: sell men razors and other shaving supplies on a subscription basis. Consumers were tired of paying an exorbitant amount of money for blades that only lasted for a short amount of time. There was a need for a company to produce a less expensive, comparable product to that of Gillette, which had a 70% chunk of the men’s shaving market. Perhaps more importantly, there was an opportunity for a company to form a direct bond with consumers by circumventing the powerful retail channel.
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Higher Pay for Auditors Leads to Fewer Restatements

CFO Magazine - 27 April 2017
The offices of Big Four accounting firms that pay lower salaries for audit help have a higher portion of clients that experience restatements, according to a new study posted Tuesday. “We obtain a sample of data on how much Big Four accounting firms are paying their auditors, and find that, controlling for the type of office, city, and a whole host of other factors, the more you pay your auditors, the fewer restatements you get in an office,” Jeffrey L. Hoopes, an assistant professor of accounting at the University of North Carolina and a co-author of the study, writes in an email to CFO.
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CFOs Must Lead Adoption of The Cloud

CFO Magazine - 27 April 2017
I read a quote from Warren Buffett the other day: “Chains of habit are too light to be felt until they are too heavy to be broken.” Mana Mojadadr Mana Mojadadr It struck a chord in me, and not just because he’s one of the world’s most successful people, with great financial instinct. It’s also an accurate description of the dilemma many CFOs find themselves in today.
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Short-Term Funding Bill May Avert Shutdown

CFO Magazine - 27 April 2017
Hoping to avoid a government shutdown at midnight Friday, congressional leaders introduced stopgap legislation that would give them another week to negotiate a longer-term spending bill. A vote on the legislation could come as early as Thursday, USA Today reported after House Appropriations Chairman Rodney Frelinghuysen (R-N.J.) and Senate Appropriations Chairman Thad Cochran (R-Miss.) unveiled the bill late Wednesday.
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Twitter Beats Estimates But Revenue Drops 8%

CFO Magazine - 27 April 2017
Twitter reported its largest quarterly increase in users since early 2015 but an 8% in revenue suggests it is still struggling to monetize its audience. The addition of nine million new monthly active users in the first quarter was a positive sign for Twitter, which had posted several quarters of disappointing results. The company also reported revenue and earnings per share that beat estimates.
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LVMH Extends Control of Christian Dior

CFO Magazine - 25 April 2017
LVMH is cementing its ties with Christian Dior through a deal in which the luxury group’s boss, Bernard Arnault, will acquire the 25.9% of Dior he does not already own for 12.1 billion euros ($13.1 billion). Arnault, France’s richest man, has been under pressure from investors to simplify the complex corporate structure between his Groupe Arnault holding company, LVMH, and Dior. Once he completes the Dior transaction, LVMH would then buy Christian Dior Couture for an enterprise value of 6.5 billion euros ($7.0 billion).

Executive Compensation Is Right Where It Should Be

CFO Magazine - 18 April 2017
Executive pay is just about right — for today, which assumes an efficient market. To suggest otherwise would imply that there is a market irregularity, such as a bubble or inefficiency, which causes an imbalance in executive pay. RJ Bannister RJ Bannister I submit that the market for executive pay is more efficient today than it was 20, 50, or even 100 years ago, driven by three primary forces; more information, more scrutiny/attention, and more employment liquidity.
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Why You Should Spend Dollars on Patent, Trademark Protection

CFO Magazine - 5 April 2017
Companies pay people to think. Inventing and branding are two primary areas where this occurs regularly. But many companies fail to adequately protect the thoughts they pay for, leading to unnecessary complications and losses. This, in turn, means loss of company value and a narrowing of opportunities.
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Aging U.S. Infrastructure Hampers Private Sector

CFO Magazine - 5 April 2017
The American Society of Civil Engineers (ASCE) recently released its report card on the United States’ aging infrastructure and like any school report card, the “D+” mark given would get any underperforming student sent to the principal’s office. There is plenty of factual data to support the view that our nation’s critical infrastructure is failing.
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U.S. Trade Gap Narrows to $43.6B in February

CFO Magazine - 5 April 2017
The U.S. trade deficit pulled back last month from January’s near two-year high as exports increased to their highest level in more than two years. The Commerce Department said the trade gap dropped 9.6% in February to $43.6 billion after reaching $48.2 billion the previous month. Economists had forecast the deficit falling to $44.8 billion in February.
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Artificial Intelligence's Real Role in Business

CFO Magazine - 31 March 2017
First IBM’s Watson supercomputer took on Jeopardy and now it’s ready to do your taxes. Or, so the TV ads running in heavy rotation these days would have you believe. Fact is, folks walking into their local tax preparer’s office will not be handing over their W-2s to R2-D2 anytime soon. However, H&R Block’s much-hyped partnership with IBM has shed some light on what the real role of artificial intelligence will be in the business world.
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Corporate Profits Climb 0.5% in 4th Quarter

CFO Magazine - 31 March 2017
U.S. corporate profits rose for the third time in four quarters but some analysts are paring back their forecasts for the first quarter of this year amid some doubt about the positive impact of President Trump’s fiscal policies. The Commerce Department said adjusted-pretax profits rose at a 0.5% annual pace in the fourth quarter after a nearly 6% gain in the third quarter.
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Pressed by Investors, CFOs Awake to Sustainability

CFO Magazine - 30 March 2017
The notion of using resource conservation, plant safety, labor, or other environmental and social issues in a company’s valuation and financial reporting has always been a tough sell for CFOs. Tim Koller Tim Koller Just utter the word “sustainability,” and a finance chief’s eyes are likely to glaze over. The gains and losses of the next quarter are likely to be more compelling than the question of whether a company’s plants will have access to cheap energy over the next 20 years, for example.
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Use of TSR as Incentive Pay Metric Flattens Out

CFO Magazine - 30 March 2017
In response to regulations that took effect following the passage of the Dodd-Frank Act, as well as pressure from proxy advisers and investors, it became common practice for executive compensation to be based on company performance.
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IPO Market Better, But Not Great, In Q1

CFO Magazine - 30 March 2017
The first quarter marked a relatively strong start to the year for initial public offerings of U.S. companies, helped in particular by the IPO of social media darling Snap. Twenty-five companies raised $9.9 billion through IPOs in Q1, the most money in a first quarter in three years. The number of companies that went public was the highest in two years, says Renaissance Capital, the global IPO research firm and investment adviser.
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Producer Prices Post 2.2% Year-on-Year Gain

CFO Magazine - 15 March 2017
Prices paid by U.S. businesses for goods and services posted their largest year-on-year gain in nearly five years last month as rising oil prices and a weaker dollar continued to fuel inflationary pressures. The Labor Department said its producer price index jumped 0.3% on a seasonally adjusted basis in February compared with the previous month. While the gain fell short of January’s 0.6% increase, it beat economists’ expectations of a 0.1% gain.
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What's Behind Financial Statement Placement Order?

CFO Magazine - 13 March 2017
If publicly held companies can leverage a legal means of positively influencing investor and analyst perceptions as to their financial condition, then why not? Take, for example, the order in which companies present financial statements. Maybe you’ve never thought about that. Indeed, it’s likely that CFOs of mature firms simply keep the order the same year after year without making a conscious decision on the matter.
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IT Focus Shifts from Revenue to Operating Income

CFO Magazine - 9 March 2017
I’m not sure exactly when it happened. But suddenly my technology clients are focused— very focused — on operating income, less so on top-line results. It seems technology investments made over the last few years are starting to pay off, creating urgency in management and boards to drive even more gains in operating performance.

Labor Dept. Seeks Delay in 'Fiduciary' Rule

CFO Magazine - 3 March 2017
The Labor Department is proposing a 60-day delay in implementation of an Obama-era rule on retirement advisers so it can have more time to evaluate whether it harms consumers by limiting their investment options.

Social Media Posts Can Sink Deals

CFO Magazine - 24 February 2017
People have been warned and warned over the past decade-plus: Be careful what you post on social media. Yet social sites are saturated with compromising posts, and a surprising number of them are made by businesspeople with a lot of money staked on their reputations. A clueless poster may, of course, suffer ill consequences. But as bad as those may be, they could represent something quite valuable to another party.

U.S. Data Breaches Hit All-Time High

CFO Magazine - 22 February 2017
The number of reported U.S. data breaches hit an all-time high in 2016, thanks in part to new CEO phishing hacks that send phony emails to employees requesting sensitive business data. Researchers from the Identity Theft Resource Center and data-security provider CyberScout scoured federal and state government records from 2016 and estimated a total of 1,093 breaches occurred last year. The record-high represents a 40% hike in the number of incidents over the previous period.

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