Governance Center Blog

Apr
02
2010

Tax Implications of the Health Care Reform Law

You may have read about some companies (AT&T, Caterpillar, AK Steel and 3M) that have announced millions in first quarter charges related to the new health care reform law officially known as the Patient Protection and Affordability Act (PPACA). Expect to see such charges or disclosure in many MD&A’s this proxy season.

Whether or not your company has taken similar action, your board should be aware of the tax and accounting implications from the health care insurance overhaul. In a March 30 Webcast [archive available] co-hosted by KPMG’s Audit Committee Institute and the National Association of Corporate Directors, Terry Iannaconi, a partner in KPMG’s National Office and a former deputy chief accountant for the SEC, listed four accounting areas boards and audit committees in particular should worry about. KPMG’s Tax Practice also produced a publication on the health care act. [Access that report, Summary of Tax Provisions in Health Care Reform.] Read the rest of this entry »

Posted by at 1:09 PM | No Comments »

Permalink: Tax Implications of the Health Care Reform Law

Share: Digg | Twitter | Stumble | del.icio.us | Facebook | MySpace | Google

Feb
26
2010

Liquidity Risk Disclosure Could be a Game-Changer

On paper, President Obama’s plan to levy a 0.15 percent financial crisis responsibility fee on the largest and most levered Wall Street firms may seem straightforward, but determining how leveraged they are may be a problem.

If you recollect, one of the reasons the financial crisis reached the heights it did was because many banks and companies did not have an accurate way of measuring how much or the value of the illiquid mortgage backed securities they had on their books. On top of that, the international Basel Committee on Banking Supervision has released what is being termed Basel III to possibly be implemented in 2012.

This framework actually offers prescriptive guidance for such important measurements as liquidity coverage ratio and net stable funding ratio. It sets minimum standards for these two important bank capital ratios. Read the rest of this entry »

Posted by at 1:25 PM | 3 Comments »

Permalink: Liquidity Risk Disclosure Could be a Game-Changer

Share: Digg | Twitter | Stumble | del.icio.us | Facebook | MySpace | Google

Jan
25
2010

Best to Keep Eyes Peeled on SEC Agenda

As President Obama continues to propose more stringent bank regulations in light of the financial crisis – a hefty tax on 50 of the largest banks and a plan to allow regulators to limit the size and scope of those banks’ risk-taking activities (Read press release, Jan. 21) –  it’s hard to imagine those gaining in any traction based on what has happened in the Senate.

The election of Scott Brown to the late Sen. Ted Kennedy’s seat gives the Republicans the power to filibuster since the Democrats will have only 59 votes, one vote short of what they need. With that said, many on the Hill believe it will be difficult, if not impossible, to approve such legislation as the financial reform package. And when you consider the proponent of the companion Senate bill, Sen. Chris Dodd, is now a lame duck, prospects for passage wane.

The uncertainty of any Obama proposal that needs Congressional approval leaves the SEC as the major corporate regulatory rule-maker for at least this year. So that is why I think it is prudent for directors and corporate management to keep an eye on the body’s rule-making and regulatory decisions over the next six-to-nine months.

Here are the most important SEC proposed and final rules I think many of you should be concerned with in 2010: Read the rest of this entry »

Posted by at 11:53 AM | No Comments »

Permalink: Best to Keep Eyes Peeled on SEC Agenda

Share: Digg | Twitter | Stumble | del.icio.us | Facebook | MySpace | Google

Dec
15
2009

Executive Compensation Reform Taking Some Baby Steps

The Obama Administration is using good old-fashioned peer pressure and more targeted disclosure to change the way executive compensation policies are carried out by public companies in the U.S. (How else can you explain that only days after the House narrowly approved an historic financial reform package (NYT, Dec. 12)  that the SEC is meeting to approve new compensation disclosure rules?)

As part of his peer pressure campaign, the President met with 12 of the CEOs from the largest U.S. financial institutions Monday morning to drive home the message that after these banks received help from the taxpayers, it’s time for them to give back. (Thanks to the tip from Pete Davis of Pete Davis Capital Investment Ideas)

“Now, I should note that around the table all the financial industry executives said they supported financial regulatory reform,” the President said in an official statement following the meeting. “The problem is there’s a big gap between what I’m hearing here in the White House and the activities of lobbyists on behalf of these institutions or associations of which they’re a member up on Capitol Hill.  I urged them to close that gap, and they assured me that they would make every effort to do so.”

Does Corporate Governance Matter?

That begs the question, “Should U.S. boards even care about corporate governance reform, especially any change to executive compensation policies, in the near future?” The short answer, as I see it, is a resounding YES! Based on discussion at The Conference Board Governance Center Fall Investor Summit, which focused on The Conference Board Task Force on Executive Compensation report, some of the issues investors are concerned about for 2010 are compensation committee composition, executive long term incentive plans and how executive bonuses will be paid. Read the rest of this entry »

Posted by at 11:43 AM | No Comments »

Permalink: Executive Compensation Reform Taking Some Baby Steps

Share: Digg | Twitter | Stumble | del.icio.us | Facebook | MySpace | Google

Governance Center Blog