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Numbers don't drive deals. People do.
Rob Garver, CFO Magazine
February 16, 2006
The article is well written; I extend my complements.
There is another risk area not mentioned — that the potential acquisition is not in full compliance with compensation and benefits law. The consequences can result in FLSA or IRS audits and produce additonal expenses.
A real example was a corporation I joined as the director of compensation and discovered 3 days after joining them that a FLSA audit was about to start in a division that had been acquired 9 months prior. The compliance problem was improper exemption classification of several hundred employees, resulting in a significant overtime back pay liability, covering the 9 month period of ownership.
The lesson learned was to initiate HR due diligence in the area of compensaiton and benefits. As a result, the corporation has avoided any subsequent liabilities associated with an acquisition.
Best regards, Dick Cottrell
Posted by Dick Cottrell | February 16, 2006 10:26 am
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