AIG To Begin Expensing Stock Options: Insurance and financial services concern American International Group Inc. has joined a growing list of Fortune 500 companies that have said they will begin expensing stock options. The company said that it would begin reporting the value of its employee stock options as an expense beginning next year. The company, however, said that it would have a scant impact on earnings, pointing out that had the company expensed options in 2001, it would have reduced its EPS by just 5 cents. In recent weeks, other companies, such as General Electric, Bank One Corp., Coca-Cola Co. and Procter & Gamble Co. have said that they will begin expensing options.
Report: CFO Salaries Diving, But Still Not Bad: The annual salaries of chief financial officers at the nation’s top companies took a southward turn this past year, as stock option values plummeted and non-cash perks dried up, according to an annual report by CFO.com.
The online companion to CFO magazine and Mercer Human Resource Consulting Group recently released their annual "CFO Compensation Special Report." The study analyzed 350 finance executives at the largest public companies.
Median total direct compensation for financial executives last year was still an impressive $961,000, but those hoping to earn as much as their bosses may be waiting in vain. Over the past five years, median total CFO compensation has hovered at just 40 percent of chief executive pay, the study found.
The five highest paid CFOs at the studied companies were Michael Lehman at Sun Microsystems, Mike Swartz at Tyco International, Larry Carter at Cisco Systems, Anthony S. Thornley at Qualcomm, and James G. Stewart at Cigna.
To view the entire list, and a breakdown of their annual compensation, go to www.cfo.com/cfopay.
Report: Wealthy Investors Trust Accountants, Despite Enron: Despite the Enron crisis, affluent investors continue to trust their accountants, according to the third annual Nationwide Financial High Income Survey.
The vast majority - 85 percent - of high-income investors who work with an accountant say that the Enron situation hasn’t changed their level of trust in that person. Affluent men were slightly more likely than affluent women to say that Enron affected their trust (14 percent vs. 7 percent), Nationwide reported. The survey polled 500 people under age 60 with annual household incomes greater than $150,000 per year who were either engaged in financial planning or intended to be in the near future.
More than 90 percent of those surveyed use an accountant in some capacity. Half reported turning to their accountant for financial planning help, while 9 percent said that their accountant is their most frequently used advisor for financial planning advice. In contrast, 70 percent turn to professional investment advisors or financial planners for financial planning help, with 45 percent reporting them as their most frequent advisor for planning advice.
According to the survey, the top services that affluent investors want from an advisor include development of a comprehensive financial plan, planning for income management in retirement, investment risk return and analysis, tax advice and estate planning.
Affluent women are more likely than men (55 percent vs. 44 percent) to use an accountant for financial planning help, and small business owners are more likely than other occupations to do so (66 percent vs. 47 percent), according to the report. Two-thirds of all respondents turn to their accountant for tax-related financial planning, 8 percent turning to accountants for retirement planning and 7 percent for estate planning.
Financial planners, though, were preferred for retirement planning at a rate of 63 percent and 15 percent report seeking tax planning advice from their financial planner. Attorneys were seen as tax planning advisors for 10 percent of these investors.
Brentmark Software Acquires Eplan: Orlando, Fla.-based Brentmark Software Inc., a 17-year-old provider of financial planning software, acquired the Eplan estate-planning software from U.S. Trust. Terms were not disclosed.
Eplan is a high-end, estate-planning program. Based in New York, U.S. Trust provides investment management fiduciary and private banking services.
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