By Ted Howard
The New Year issue of iTreasurer starts off with more Trump, what else? As with his predecessor, people are seeing a variety of presidents in Donald Trump, from being a threat to American democracy and for that matter, the world, to being the restorer of the American dream and making America great again for everyone. Treasurers probably tend toward the latter view, i.e., a more positive depiction in their painting of The Donald portrait. They see the possibility of tax and regulatory relief and other bullish things for business.
So it is, NeuGroup founder Joseph Neu delves into what Trump will mean when it comes to corporate taxes. In “Capital Planning: It’s All About Trump’s Tax Plan,” Mr. Neu points out that treasurers have had repatriation tax holiday and tax reform on their minds for years and are hoping the new president makes meaningful progress during his term. And if it is repatriation tax relief, what will they do with that money? “Depending on the sector, most firms will look at strategic acquisitions and then share repurchase and dividends,” Mr. Neu writes. “Depending on the state of their leverage and rating outlook, some may also retire debt, but given the current rate outlook and recent low-rate opportunistic funding, there will likely be few taking this route.”
Then iTreasurer contributor Julie Zawacki-Lucci writes about what 2017 will bring for Treasury budgets. After mining the data collected from numerous peer group meetings, Ms. Zawacki-Lucci concludes that it will be a good year for budgets. “Purse strings appear to be loosening slightly for 2017,” she writes.
In our peer group meeting summary, we take a look at the takeaways from The NeuGroup’s Treasurers’ Group of Thirty Large-Cap edition (T30 LC). One key takeaway is that the treasury function’s stock is rising. That’s been reflected in compensation levels, which have been moving higher. “The increasingly strategic role of treasury is showing up in respectable compensation levels, especially in pharma and biotech,” according to Anne Friberg, who runs the group. Treasury’s sphere of influence is also expanding, according another takeaway from the meeting.
In a similar vein, James Volkwein and Joseph Mauro of Deutsche Bank author a story on five trends to watch in 2017. Among them is “corporate treasury’s role as the principal risk manager of the organization,” which will continue into 2017 and beyond. In the piece they also note “the longer-term trend of treasury becoming more strategic as its mandate expands.”
Finally, Anne Friberg weighs in on a Trump administration and its impact on the US dollar and taxes. Will it be Dr. Jekyll Trump, going “whole hog on expansionary fiscal policies—tax cuts, infrastructure spending—as he has more than hinted in speeches, tweets and other pronouncements?” Or will it be Mr. Hyde Trump, killer of free trade treaties and bullier of business? Whoever emerges after January 20, one thing is certain, Ms. Friberg writes: “The year 2017 may bring both elation and exasperation with the new president, but likely not ennui.”
Enjoy the issue!