Warning to CFOs and other top execs: Institutional investors are most concerned about corporate governance and disclosure issues as we head into the new year.

This is the clear message being delivered from a survey of US institutional investors conducted during the past week by Broadgate Consultants, Inc., an international corporate and capital markets communications advisory firm.

More than 76 percent of the 89 survey participants, which Broadgate claims included leading US fund managers, said they expect pressure from institutional investors on corporations related to corporate governance matters to increase next year.

Among their top concerns are stock option grants and pension fund accounting.

More than 70 percent of the respondents said that they are unhappy about the rising quantity of stock options being issued to employees and their potential dilutive effect.

In fact, yesterday the SEC voted to require greater disclosure of corporate stock options plans. Specifically, companies must disclose details of their options plans that haven’t been approved by shareholders.

Nearly 80 percent of the respondents to the Broadgate survey are also deeply concerned about overly optimistic assumptions used by corporations for returns related to their pension funds, which can often boost earnings expectations.

Corporations are reviewing their assumptions regarding pension assets in light of current stock market conditions, Broadgate points out. GE, for example, recently announced that it lowered long-term returns on pension assets.

On other matters, the institutional investors also expect an increase in takeover activity in a number of industries, including technology, telecommunications, financial institutions and health care. The housing sector is the least likely industry to see significant takeover activity, according to the respondents.

“The survey results indicate that many sophisticated US market participants believe that the indiscriminate nature of the stock market decline may yield exceedingly attractive buying opportunities in the New Year, even in the absence of bull market conditions,” said Thomas C. Franco, Chairman and Chief Executive Officer of Broadgate, in a statement. “This conviction is buttressed by the widely held view that there will be increased takeover activity in 2002, particularly with many companies selling for less than the cash they have on hand.”

Accenture Expects to Beat Estaimtes

Accenture said it expects results for the first quarter ended November 30 to exceed analysts’ consensus estimates.

Revenues before reimbursements are expected to rise to about $2.99 billion, exceeding analysts’ current consensus estimates of $2.80 billion. Operating income is expected to be $405 million to $415 million, exceeding analysts’ current consensus estimates of $379 million.

Excluding investment writedowns and the related tax effect, net income before minority interest is expected to be between $250 million and $260 million, exceeding analysts’ consensus estimate of $226 million. Diluted earnings per share on the same basis are expected to be $0.24 to $0.25, exceeding the analysts’ consensus estimate of $0.22.

Reported net income before minority interest, including investment writedowns and the related tax effect, is expected to be between $195 million and $205 million. Reported diluted earnings per share on the same basis are expected to be $0.19 to $0.20.

“Our strong performance demonstrates our ongoing ability to provide clients with the services and solutions they require, especially in challenging times like these,” said Joe W. Forehand, Accenture chairman and CEO, in a statement. “The resilience and responsiveness of our more than 75,000 professionals around the world was key to our ability to achieve this performance.”

Accenture’s loss on investments in the first quarter includes a $90 million charge related to the company’s venture and investment portfolio.

Accenture also said it is accounting for costs associated with the September 11 tragedy in the United States in ongoing operating expenses.

Accenture’s stock has nearly doubled to $26.03 since the consultancy went public in July.

SEC Probing Hamilton Bancorp’s Accounting

Here we go again.

Hamilton Bancorp Inc. said the Securities and Exchange Commission is investigating the company and individuals currently or formerly associated with the company, regarding accounting matters, financial reports and other public disclosures.

The company said it is cooperating fully with the SEC.

“The investigation appears to management to relate to a review of the accounting for the purchase of certain securities and the sale of certain loans in 1998 and the accounting for allocated transfer risk reserves in 1999 and 2000 with respect to certain Ecuadorian exposure,” the company said in a statement.

In addition, Hamilton Bancorp and Hamilton Bank have filed an action against the Office of the Comptroller of the Currency (OCC) in the Federal District Court for the Southern District of Florida. “The complaint alleges discriminatory, arbitrary and capricious regulation and examination by the OCC of Hamilton Bank over the past three years, including as concerns the accounting treatment of transactions and the imposition of reserves,” it said in a statement.

The action seeks injunctive relief against the OCC.

Hamilton Bancorp, through its subsidiary Hamilton Bank, N.A., has eight Florida branches and one in Puerto Rico.

Calpine Raises $1 Billion

Fresh off its downgrade to junk status by Moody’s last week, power generator Calpine Corp. said it raised $1 billion in a private placement of convertible debt. It had said before the stock market opened on Wednesday that it planned to raise “just” $400 million.

Calpine plans to use the proceeds to strengthen its balance sheet by buying back its zero-coupon convertible debentures. The debt on those securities totaled $878 million as of Dec. 12.

The newly raised debt can be converted into Calpine’s common stock at $18.07 per share, a 23 percent premium over Wednesday’s closing price.

In other financing news:

• Moody’s downgraded the ratings of Hilton Hotels Corp. to Ba1 from Baa3. This action reflects the significant negative impact on the lodging industry following the terrorist attacks, “and the resulting deterioration of the company’s debt protection measures, the increased risk that earnings could be more volatile in the near to intermediate term due to unfolding political events, and the likelihood that it will take time for the company’s earnings to rebound, resulting in a slower pace of debt reduction,” the rating agency said in a statement.

• On the other hand, Moody’s upgraded the ratings of American General Finance Corp.’s senior debt to A1 from A2 and confirmed the Prime-1 commercial paper rating for its holding company, American General Finance, Inc. “This upgrade is based upon underlying and implicit support from AGFC’s ultimate parent, the American International Group, Inc., and AGFC’s well-established presence in the consumer finance industry, solid historical credit metrics and relationship with its direct parent company, American General Corporation,” the rating agency said in a statement. AIG does not guarantee AGFC or AGFI debt.

• Moody’s also placed the long-term ratings of Motorola Inc.’s senior unsecured debt–currently rated A3–and its subsidiaries on review for possible downgrade. “The review is in response to the outlook for weaker end markets for a number of Motorola’s business units, which will place increased pressure on the company’s operating performance,” the rating agency said in a statement. The company’s Prime-2 short term ratings are not being placed on review.

Motorola announced that revenues could decline by 5 percent to 10 percent in 2002 primarily due to reductions in telecommunications infrastructure spending in the wireless, broadband and wireline markets. Capital spending plans among carriers have been dramatically pared in the past year due to the pervasive problems afflicting the telecom industry.

In Brief

• Finally. After putting it in play five months ago, Comcast Corp. won the bidding war for AT&T Corp.’s cable television unit. It will pay $72 billion in stock and debt, making Comcast the largest cable provider.

• Now here’s a nostalgic moment. Liz Claiborne Inc. said that it authorized a 2-for-1 split of its common stock in the form of a stock dividend. The stock dividend is payable on Jan. 16, 2002 to holders of record on Dec. 31, 2001. Liz’s stock closed at $50.28 on Wednesday.

• Tyson Foods Inc., two of the its executives and four former managers have been indicted on charges of conspiracy to smuggle illegal immigrants to work at its US plants as a way to boost profits, the Justice Department said on Wednesday. The two execs named in the indictment include Robert Hash, vice president of the retail fresh division, and Gerald Lankford, former human resources manager for the same division. Tyson Senior Vice President of Human Resources Ken Kimbro said, in a statement, “The prosecutor’s claim in this indictment of a corporate conspiracy is absolutely false.”