September 08, 2010
Enjoying the Good News, But…
Awaiting the Bad News
When members of the Tech20 Treasurers’ Peer Group met in the spring, the US economy looked to be safely on the road to recovery and capital markets participants were more actively seeking risk than anyone would have anticipated a year ago. At the meeting members discussed this and other topics, including:
1) Update on the Evolution of Capital Markets and Bank Credit. Risk appetite is capable of returning faster than most market observers expect.
Key Takeaway: Don’t get too greedy with CP or extend bank lines past the point of best pricing.
2) Tax Concerns. Of current regulatory issues, tax concerns are most dominant with Tech20 members.
Key Takeaway: Resist the temptation to increase regular dividend payouts and make a special dividend before Bush tax cuts expire instead.
3) Corporate Strategy and Board Involvement. Treasurers at founder-led tech firms usually support and improve strategy implementation; not set the game plan.
Key Takeaway: Corporate strategy tools have evolved little in four decades, so tools treasurers know well can just as easily find their way into the mix as new tools get baked.
4) Compensation. Treasury in tech should look outside corporate ranks for comp benchmarks and be more innovative about how to match up to them.
Key Takeaway: Moving the dials on RSU grants, vesting schedules, with a view to employee tax ramifications, offer tools for comp innovation.
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