File this under “Things You Already Knew”: a recent Wall Street Journal article observes that CFO jobs are getting tougher.
One of the toughest belongs to Bob Davis. In 2005, Davis jumped from Dell, with its top-notch finance operations, to CA — a company with a different kind of reputation — whose former executives have been accused of falsifying financial records since 1998. At CA (formerly Computer Associates), Davis joined some other golden boys from blue-ribbon companies, including Jeff Clarke, of Compaq and HP, and John Swainson, a 26-year veteran of IBM, in a race against time to put the company back on track.
As senior writer Alix Nyberg Stuart reports in “Race to Reform,” CA is the test case for a new form of post-Enron enforcement, the deferred-prosecution agreement. The concept is promising for companies scarred by fraud, and scary for the perpetrators. In essence, a company agrees to help prosecutors put the guilty in jail in exchange for time to restructure. If CA’s new team fails to meet all its obligations by its September deadline, the government will proceed with a full-fledged prosecution of the company. If the team succeeds, the payoff is substantial, not only for Davis and his cohorts, but also for CA.
The Justice Department isn’t the only federal agency turning the screws. In 2005, the IRS announced its intention to crack down harder on tax cheats. But has it? According to a new CFO survey (see “Crackdown“), 43 percent of respondents think enforcement is more aggressive. While relatively few of those companies have paid more taxes, tax executives tell us that the new rules have — you guessed it — increased their workloads.
But wait: there is some good news to greet the New Year. Surveys and anecdotal evidence suggest that because their jobs are getting harder, CFOs are also getting significantly higher pay — a trend that, with any luck, will have legs as we head into 2006.