The FD Effect

Gregory Geswein feels a bit like a jilted lover. The reason: In recent months, the CFO of Diebold Inc. hasn’t been getting as many calls as he had from Wall Street analysts who follow the North Canton, Ohio, maker of automated teller machines. Sometimes Geswein will even get up the courage to cal...

By Stephen Barr • April 1, 2001

Captives for Rent

Directory Distributing Associates Inc. (DDA) stopped paying through the nose for workers’ compensation insurance in 1994. Fed up with expensive state assigned-risk pools, DDA rented a captive facility instead–and slashed its expenses by half. “The strategy has driven down our costs and provided m...

By Russ Banham • April 1, 2001

Ergonomics Rules Still Kicking

In the wake of federal legislation scrapping the Occupational Safety and Health Administration’s (OSHA) ergonomics rules, momentum is quietly building on both the federal and state level for some kind of regulatory approach to take their place. According to a source at OSHA who refused to be iden...

By Ed Zwirn • March 30, 2001

Why CFOs Should Get Risk Management, HR To Play Nice

Sometimes it takes a CFO to bang the heads of risk management and human resources professionals to get them to play together for the good of the company. That was the case at National Semiconductor, remembers Eugene F. Kiernan, the veteran director of risk management and insurance for the Sunnyva...

By David Katz • March 29, 2001

What’s the ROI for Your Benefits?

Not long ago, calculating the return on investment (ROI) for your employee benefit plan might have been a normal activity—if you were the CFO of a company domiciled on Mars. Benefits, after all, have long been considered a “soft,” unquantifiable area.To be sure, everyone knew that benefits produc...

By David Katz • March 22, 2001

Delta’s Strategy for Reducing Turbulence

It should come as no surprise that Delta Air Lines has financial perils on its corporate mind.Beset by the threat of a pilot strike and by shrinking passenger rolls, Delta warned Tuesday that it expects to report a first-quarter loss of $85 million to $110 million, or 70 cents to 90 cents a share...

By David Katz • March 15, 2001

Did Amazon’s CEO Pass the Smell Test?

The ferocity of the insider trading controversy picked up steam when The New York Times reported last week that Amazon.com CEO Jeff Bezos is being investigated by the Securities and Exchange Commission for his sale of up to 800,000 shares in February. It’s far from certain that Bezos actually ran...

By Joseph Radigan • March 13, 2001

Dodging OSHA’s Earnings Threat

In the end, employers dodged a bullet. The Occupational Safety and Health Administration ergonomics rule could have added a loud “pop” to workers’ compensation costs. But on Wednesday, the House passed a bill disapproving the voluminous rule, as the Senate did earlier in the week. Now the bill is...

By David Katz • March 8, 2001

How Not to Cut Health Costs

On the surface, cloning defined-contribution benefits for use in health care has a powerful appeal for CFOs. Plunk down a set amount of health-care dollars in an account for your employees each year, and let them spend it on whatever health plan they choose, rolling over the surplus from year to ...

By David Katz • March 1, 2001

The Buyback Catch

In December, the board of Alanco Technologies Inc. authorized the buyback of 500,000 common shares, or about 7 percent of its total shares outstanding. To CFO John Carlson, the action was more than appropriate. After all, the company had significant capital to fund the buyback–its fiscal first-qu...

By Russ Banham • March 1, 2001

Privacy Risks Threaten Bottom Lines

Unlike most everyone else, it seems, I don’t care much about privacy.If a marketing firm sends my name to a bunch of telemarketers, I don’t whine— except when the telemarketer calls at dinner time.If my medical records go straight to my health insurance company, that’s the consequences of the emp...

By David Katz • Feb. 22, 2001

The Unhappiness of Divorce

Like divorces, severance agreements between companies and laid-off employees have a certain amount of unhappiness built into them—for all parties concerned.But the separation pact Amazon.com offered the employees it recently let go seems to have bred more—and certainly more visible—discontent tha...

By David Katz • Feb. 15, 2001

Tech Risks Baffle Risk Managers, Companies

Corporate risk managers don’t grasp the risks associated with technology, and their companies lack the means to prevent bad things from happening. That’s the finding of a recent survey of executives at 1,500 companies in the U.S. and Europe, released by the St. Paul Companies, a Saint Paul, Minne...

By Michelle Gabrielle • Feb. 13, 2001

For Some Companies, A+B=1

Raytheon is the latest company to consolidate its two classes of stock. The Lexington, Mass.-based defense contractor announced earlier this month that it had received a private letter ruling from the Internal Revenue Service allowing the company to combine its Class A and Class B shares into a s...

By Lisa Yoon • Feb. 13, 2001

Just Give Us the Facts

Reg FD, the Securities and Exchange Commission rule that governs the way public companies release information to investors, apparently doesn’t go far enough, according to the Financial Accounting Standards Board. FASB, in fact, is proposing that companies disclose more information— and do it volu...

By Jennifer Caplan • Feb. 7, 2001

Non-Competes: The Dark Side of Tight Labor

Non-compete agreements are the dark side of the tight labor market. They’re the stick many companies use to keep employees from jumping ship to competitors. Unlike such carrots as signing bonuses and stock options, non-competes provide employers with a punitive way to keep their best employees—an...

By David Katz • Feb. 1, 2001

Corralling Rates

In 1995, when insurance prices were ridiculously low, Union Carbide Corp. decided to take a prudent approach. Knowing that bargains don’t last forever, the $5.9 billion chemical company purchased a multiyear, combined- lines property- and- casualty insurance policy that locked in its prices over ...

By Russ Banham • Feb. 1, 2001

Will the 401(k) Bubble Burst?

Will the downturn in the stock market be deep enough to push 401(k) plan sponsors toward offering broader arrays of investment choices to participants in the quest for better returns? Over the last few years, that question has been irrelevant. CFOs and senior investment officers were for the most...

By David Katz • Feb. 1, 2001

The OSHA Ergonomics Rule’s Fatal Flaw

The Occupational Safety and Health Administration’s new ergonomics rule is an unstable compound, ready to blow at some future date. And that should make many CFOs happy—but only in the long term. The standard, which took effect January 16, requires stricter guidelines from employers who have litt...

By David Katz • Jan. 25, 2001

Clinton Privacy Rules May Reach Into Corporate Pockets

A warning to all employers: mum’s the word on your employees’ medical data. The punishment for simply giving out such data without a worker’s permission may be as severe as paying out $50,000 and spending a year in prison. That’s one of the penalties mandated under the new medical privacy rules t...

By Michelle Gabrielle • Jan. 19, 2001

Drowning In Underwater Stock Options

“Help! I’m drowning,” employees holding underwater stock options may be crying. At the same time, institutional shareholders are singing a song called, “Don’t dilute me, let them go,” meaning employee holders of stock options and the options themselves.With the stock market’s downward slide, many...

By David Katz • Jan. 18, 2001

It’s `Scratch and Win’ in the Insurance-Buying Game

For the property-casualty insurance industry and the buyers of commercial lines coverage, the new Congress and the presence of George W. Bush as president are starting to look like a scratch-and-win game in which prizes are sure to be won. In the areas of product and environmental liability refor...

By David Katz • Jan. 17, 2001

Is There an Insurance Crisis Coming?

Looks like insurers weren’t bluffing.Shortly after the September 11 attacks, representatives of the property and casualty insurance industry asked Congress to cap losses by promising to pick up terrorist-related claims above a specified level. At first, it looked like legislators were going to de...

By Stephen Taub • Jan. 10, 2001

Death of the Gatekeeper

(“Risks & Benefits” is a weekly column covering risk management, employee benefits, compensation, and other workplace issues of interest to senior financial executives. Comments are most welcome. E-mail David Katz at: [email protected].)Any employee who’s been a member of a health- benefits p...

By David Katz • Jan. 4, 2001

The COLI Wars

When Congress passed a slate of tax changes in 1996 to curb the use of tax shelters by U.S. companies, corporate-owned life insurance (COLI) policies were at the top of the hit list. And judging from two court decisions in the past year, Internal Revenue Service hitmen are finding their mark.On O...

By David Katz • Jan. 1, 2001