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

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

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

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

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

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

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

Greenspan at the Helm

The unpredictable and frequently astonishing events of the last several months have forced many people to change plans. Young entrepreneurs anticipating dot-com initial public offerings have had to shelve the blueprints for their mansions. Large companies are shying away from jittery bond markets...

By Daniel Gross • Jan. 1, 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

Looking for Raw Deals

By the time Elvis had left the building at United Technology Cos. headquarters last winter, it was clear that the Hartford-based company’s new E-procurement system could procure just about anything. The system didn’t actually bring the King back from the grave, but it did manage to engage an Elvi...

By Tim Reason • Jan. 1, 2001

NEW COLUMN: Risks & Benefits

(Editor’s note: This is the first appearance of “Risks & Benefits,” a weekly column covering risk management, employee benefits, compensation, and other workplace issues of interest to senior financial executives. Comments are welcomed. E-Mail to: [email protected].)On the surface, it sounds ...

By David Katz • Dec. 26, 2000

It’s Time to Get Serious About Audit Committees

Leland Graul recalls the time not too long ago when he nearly lost it. The BDO Seidman partner was meeting with chiefs of a Fortune 1000 client in order to review procedures for the firm’s audit.“‘As chairman of the audit committee, do I have to read the Form 10-K?'” he remembers being asked. “I ...

By Ed Zwirn • Dec. 21, 2000

Disclosing Stock-Option Plans

Are companies that issue stock options to a broad base of employees, as well as directors and officers, trying to slip a fast one past investors? Or should company management, operating in a tight labor market, be cut some slack and be permitted to offer stock options to rank-and- file employees ...

By David Katz • Dec. 19, 2000

Ghastly Calculations

Maybe it’s the fear that a car crash or a food contamination, mixed with a class-action lawsuit, can subtract hundreds of millions of dollars from a company’s bottom line. Maybe it’s the cheap price of liability insurance. Whatever the cause, however, corporations have been buying higher and high...

By David Katz • Dec. 14, 2000

It’s the Losses, Stupid

With their companies facing the likely prospect of higher property-casualty insurance costs in 2001, CFOs and the risk managers who toil under them may soon be handling some hot potatoes: potential losses that were previously insured. And those loss exposures— spiked by a random hurricane or a st...

By David Katz • Dec. 12, 2000

Don’t Call Me Dot-Com Anymore

Everyone has a friend that had a silly nickname when they were young, like “Bones” or “Boomer.” It was cool in college, but chances are when those friends graduated, they worked hard to ditch the nickname to appear more professional in the working world. Once- glorious, now scorned Internet compa...

By Lisa Yoon • Dec. 8, 2000