Goldman Sachs Chairman using Twitter to Protect and Defend Corporate Reputation. (Sound Familiar?)
Lloyd Blankfein, Goldman Sachs’ chairman says he takes to Twitter to either protect the firm’s corporate reputation or to showcase the firm’s wheelhouse of expertise. “Before Twitter, I did those things by press release. The other thing I'll comment on is when things really affect the ability of our people to be who they are and to do their job and to be effective as professionals.” The social network also provides a way to prevent misinformation or a lack of understanding by the public. He specifically cited the 2008 financial crisis, when the firm was maligned at a time when much of the public did not know what the investment bank did, he asserted. “I’m not going to let there to be a vacuum about what we’re like,” he said.
His most recent topics have been as diverse as commenting on LGBT rights in the work force, the need for greater spending on infrastructure, and musings on his most recent trip to China.
Note to CEOs – Blankfein makes effective use of Twitter to get his opinion to the public in a non-regulated structure. And, please note he does not tweet earnings.
Companies are fighting back against the SEC’s Non-GAAP accounting recommendations.
Companies are fighting the good fight on adjusted earnings and winning. To date, 35 of 41 companies have successfully convinced the SEC that their adjusted earnings figures are not misleading to investors. Initially, the SEC seemed to be winning the battle, with more than a quarter of the S&P voluntarily changing their press releases to be in line with the SEC’s recommendations. But now, companies are fighting back, granted that the only very large ones with the resources to defend their own accounting practices are willing to engage in a fight. The most standard area of argument was expenses as unusual events (non-GAAP) or necessary to operate the business (GAAP). Areas that the SEC has ok’d include restructuring costs and charges for cost-cutting programs to be completed over a multi-year timeframe.
Learnings from companies adopting the SEC's the new revenue recognition rules early.
With the effective date for new revenue-recognition rules at the end of 2017 looming, a few brave companies are adopting them early. So far, the results are mixed, with about half finding no material impact from the adoption of the new standard (e.g. Ford), and others (e.g. General Dynamics, and Workday) either experiencing material changes in revenue and income, or having actually increased growth rates and thus raising the comparison bar for future quarters. As expected, companies with significant revenues tied to contracts (e.g. Raytheon) are providing extensive disclosure on the issue. Recent surveys, however, indicate that many companies are just getting started in the work to adopt the new rules, even though it was promulgated in 2014. The work to implement the new standards, both in evaluating the rule's impact on revenue and the writing of related disclosure, appears to be quite significant for some. Read this piece by PLI to see how these companies have reported adopting the new reporting requirement.