Standout Stories

Activist investors… Your company could be doing better. The stock is in the doldrums, and the price-to-book ratio is low. On a variety of financial measures — shareholder returns, revenue growth, operational costs, and so on — the company is underperforming its peers. Cash flow is reasonably healthy, but one of the divisions is starting to falter. Adding insult to injury, management won the last say-on-payvote by less than a large margin.

Your company, in short, is a prime target for an activist hedge fund. Such investors make money by taking stakes, and board seats, in public companies and pressuring them to put themselves up for sale, spin off the parts, repurchase stock or increase dividends, or make operational changes. Activist funds have outperformed other types of hedge funds in recent years, attracting capital inflows. They currently boast more than $150 billion in assets under management, says Paula Loop, leader of PwC’s Governance Insights Center, “and they are looking for places to invest in.” Read article.

Whistleblower… The Securities and Exchange Commission paid a record $37 million to whistleblowers last year. Even so, research has found that as many as half of the employees who witness misconduct do not disclose it.

To encourage more disclosure, the Association of Certified Fraud Examiners has recommended that companies specifically emphasize anti-retaliation protections in their communication with workers, and the great majority of Fortune 500 firms now do so.

Yet, sensible and responsible though such measures would seem, new research suggests they are counterproductive. Read article.

Headlines

 

CFOs on the Move: Week Ending March 18

State Street, Mars, SunEdison, ARIAD, Darden Restaurants, Brock Group, Selective Insurance, MB Financial, Natural Sunshine Products, Focus Brands

 

Is Now the Time to Consider a Carve-Out?

With the appetite for IPOs at a low ebb, carve-outs offer an alternative path to boosting shareholder value and firming up the balance sheet

 

Whistle a Different Tune

An experiment suggests that too vigorously stating whistleblower protections to employees can backfire.

 

Tiffany Beats Q4 Estimates But Strong Dollar Bites

The luxury goods company predicts sales and earnings growth will continue to be pressured by the strength of the dollar and an uncertain economy.

 

U.S. Treasury Gets Record $97.8B From Fed

The surge in the Fed’s remittances to Treasury reflects in part the interest earned from its bond-buying programs to stimulate the economy.

 

Venoco Files Chapter 11 Due to Oil Price Slump

The Denver company says the declining price of oil and the closure of a key pipeline “continue to be serious problems.”

 

Stripe to Offer Financial Services to Cubans

The online payment firm’s move is part of a “deluge of interest” by U.S. companies in Cuba since the easing of financial restrictions.

 

Compliance Function Losing Access to CEOs

A new survey finds compliance officers are “facing challenges to perform as a strategic partner to the business.”

 

Activists at the Gate

Activist investors are bigger and hungrier than ever. Here’s how to keep them at bay.

 

Not Just Another Jewelry Company

A finance chief outlines a strategy of selling jewelry based on its “meaning” rather than its glitter.

 

Lands’ End Posts Fiscal Q4 Loss

A $98 million write-down of the value of the Land’s End name and a 6% drop in net sales were the lowlights.

 

Wearable Shipments Worldwide to Top 200 Million: IDC

At the same time, the research firm expects major changes in the products, including ‘smarter watches … built by classic watch makers.’

 

SEC Says Equal Pay Measure Should Be on Amazon Ballot

A shareholder is requesting that high-profile tech companies report on how they are addressing gender pay inequality.

 

Pension Agency Assumes Benefits for A&P Workers

The bankrupt company’s plans cover the retirement benefits for more than 21,000 people and are underfunded by about $292 million.

 

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