Wal-Mart Stores Inc. is the latest company to announce one-time bonuses and a minimum-pay raise, to $11 per hour, for U.S. employees as the new lower corporate tax rate is poised to
A slew of companies have made similar moves, announcing perks in the wake of the tax legislation.
AT&T Inc. and
said they would pay a $1,000 bonus to most of their U.S. workers, more than 300,000 people combined. Meanwhile,
Wells Fargo & Co.,
PNC Financial Services Group Inc., BB&T and
Fifth Third Bancorp have also previously announced a raise of their minimum wage to $15 an hour.
The move comes as competition for low-wage workers heats up among retailers, e-commerce warehouses and other industries that require a large, unskilled workforce.
The news of the fatter paychecks for Wal-Mart employees came on the same day as the U.S. Treasury Department update of its rules for
tax withholding from paychecks, changing calculations so most workers will start getting more take-home pay in February as a result of the recently passed tax law.
THE DAY AHEAD
is scheduled to release quarterly earnings today.
CFO JOURNAL EXCLUSIVE
International Business Machines Corp. announced a management revamp Thursday, as it named a new finance chief while the current CFO takes a new role at the company.
James Kavanaugh will become senior vice president and finance chief effective immediately. Mr. Kavanaugh is currently senior vice president, finance and operations, and previously served as IBM’s vice president and controller. He succeeds Martin Schroeter, who—according to a company spokesman—will take on a sales-focused role as senior vice president, global markets. Mr. Schroeter was previously general manager of IBM Global Financing before
The management changes come as IBM grapples with its transition to higher-growth operations such as delivering pay-as-you-go services over the internet from older, shrinking businesses such as building and maintaining technology on customers’ premises.
IBM’s revenue slipped 0.4% from a year earlier, to
$19.15 billion in the third quarter of 2017, marking it as the 22nd consecutive quarter of year-over-year revenue declines.
Middle-market private companies earnings growth on the rise. Earnings at private, middle-market companies in the U.S. grew at their fastest pace since 2012 during the fourth quarter, according to a report by
Golub Capital, a lender to these companies. Earnings increased 12.8% in the fourth quarter of 2017 from a year earlier, the fastest rate of year-over-year growth since the inception of the index in 2012 and up from 4.9% growth in the third quarter. Revenue rose 11.5%, up from 6.8% in the third quarter.
“The middle-market economy is growing faster than it has over the entire period of this recovery,” Lawrence Golub, chief executive of Golub Capital, told CFO Journal’s Tatyana Shumsky. “The fact that this is all coming before the tax cuts indicates that the economy has a path for further growth,” Mr. Golub added.
Brighter economic outlook a boon, challenge for German companies. Germany’s economy will pick up steam in 2018, according to the BDI Federation of German Industries. Europe’s largest economy will expand by 2.25% this year, an uptick that will lead German companies to create several hundreds of thousands of new jobs, reports CFO Journal’s Nina Trentmann. For finance chiefs, the stronger economic environment could result in higher costs, as they may need to increase wages to retain talent in a tightening labor market.
- Web-storage company Dropbox has filed confidentially to go public.
Dropbox files for IPO. Web-storage company
Dropbox Inc. has filed confidentially to go public, in what stands to be one of the largest tech IPOs in the past few years, multiple people familiar with the matter told the WSJ.
Apple could get a $4 billion boost from tax-law quirk. Companies that stockpiled offshore cash may get one last break before paying U.S. income tax, provided their fiscal years don’t follow the calendar year, reports Bloomberg. Potential winners include
MoneyGram International Inc. signed on to run a pilot program testing XRP, a digital currency created by San Francisco startup
Ripple Labs Inc., in its payments network.
Ford Motor Co. is warning owners of nearly 3,000 older Ranger pickup trucks not to drive them after learning that a driver was killed last year when a defective air bag made by Japanese supplier
Takata Corp. ruptured in a crash.
Altice reverses course in U.S. and Europe. French billionaire Patrick Drahi, the founder of telecommunications giant
Altice NV said he would spin off
Altice USA Inc., the listed company that houses his American assets, to existing shareholders. The move effectively ends ambitions of turning his telecom and cable enterprise into a single trans-Atlantic powerhouse.
Kering to spin off Puma to its shareholders. Luxury goods company
Kering moved to shed most of its controlling stake in the German sportswear company
Puma SE, announcing a plan to distribute 70% of Puma’s shares to Kering shareholders.
Delta Air Lines Inc., the No. 2 airline by traffic in the U.S., said rising revenue and lower corporate taxes will help boost profit this year.
Fujifilm Holdings Corp. has reinvented itself after the demise of its core product and is in good health having branched out into medical equipment, such as mammography machines, as well as cosmetics and electronic materials.
Facebook Inc. and
Twitter Inc. on Thursday came under fresh fire from shareholders who pressed the social-media companies to do more to combat harassment of all kinds on their platforms.
Tencent joins Asia-tech debt rush with its biggest bond sale. Chinese internet giant
Tencent Holdings’s visit to the bond market this week marked the latest in a string of Asian technology firms that have been issuing more debt as their market values have swelled.
Intel Corp. is quietly advising some customers to hold off installing patches that address new security flaws affecting virtually all of its processors. It turns out the patches had bugs of their own.
Fiat Chrysler Automobiles NV said it would invest $1 billion to move production of profitable trucks from Mexico to Michigan, a move that will significantly lower the auto maker’s exposure to potential changes to the North American Free Trade Agreement.
Toyota Motor and
Mazda Motor Corp. were offered at least $700 million in combined incentives to steer a $1.6 billion new factory investment to northern Alabama.
Auto makers, in a blast from the past, retool iconic trucks. Ford’s Bronco, the bulky SUV, is returning to the market in 2020, ending a nearly quarter-century hiatus. It is part of a comeback parade for throwback-mobiles including the Chevrolet Blazer, Mitsubishi Eclipse, Land Rover Defender and Ford Ranger. Jeep is resurrecting the Wagoneer and the Scrambler, while Volkswagen is toying with putting the Microbus back in the lineup.
NASA safety watchdogs raise concerns about SpaceX, Boeing spacecraft. NASA’s plan to routinely ferry astronauts into orbit using private spacecraft—initially slated to start last year—has now slipped until at least the spring of 2019 and unresolved hazards threaten further delays.
General Motors Co. is seeking U.S. government approval for a fully autonomous car – one without a steering wheel, brake pedal or accelerator pedal – to enter the automaker’s first commercial ride-sharing fleet in 2019, executives said, Reuters reports.
- Qualcomm’s campus in San Diego, Calif.
Qualcomm Inc. is set to clinch conditional European Union antitrust approval for its $39 billion acquisition of
NXP Semiconductors NV, as soon as next week, people familiar with the matter told the WSJ, as the semiconductor company fends off unsolicited bids by
Endo Pharmaceuticals Inc. asking for information about opioid-related products, Endo’s parent company announced.
ECB minutes signal pivot. The European Central Bank indicated it might move sooner than investors had expected to phase out its giant bond-buying program, sending the euro and eurozone government bond yields higher.
Economists credit Trump as tailwind for growth, hiring and stocks. Economists surveyed by The Wall Street Journal say President Donald Trump has had generally positive effects on U.S. economic growth, hiring and the performance of the stock market during his first year in office.
Fed’s Dudley makes case for rate rises, warns of overheating risks. Federal Reserve Bank of New York President William Dudley said Thursday the case for rate rises this year remains robust amid risks the economy could overheat, and warned that the new tax law could boost the U.S. deficit over time.
U.S. ran $23 billion budget deficit in December. The federal budget deficit for December narrowed from a year ago, amid flat government spending and higher tax receipts, the Treasury Department said.
China reports biggest-ever annual trade surplus with U.S. China’s chronically high trade surplus with the U.S. hit a record level in 2017, adding fuel to Trump administration criticisms about Chinese trade practices just as it weighs a range of penalties and other actions to curb the imbalance.
THE WEEKEND READER
Every weekend we select a handful of in-depth articles we think are worth a bit of your time, either because they peel back the layers on a compelling business story, or somehow make us look at business in a different light.
The spark behind Iran’s unrest: Millions of defrauded investors. Complaints over financial fraud quickly morphed into a wider protest over an economy that hasn’t performed to expectations, especially following a landmark nuclear deal in 2015 that eased Western sanctions but didn’t do much to improve living standards.
This army of AI robots will feed the world. A slew of startups are developing machines that can differentiated between crops and weeds, and eliminate the weeds, reports Bloomberg Businessweek.
Allegations of groping, lewd comments and rape: Academia’s #MeToo moment. Sexual assault has been a flashpoint for years on college campuses, and schools have struggled with how to adjudicate harassment claims made against students, let alone those against tenured faculty, according to lawyers, school administrators and faculty.
The Morning Ledger from CFO Journal cues up the most important news in corporate finance every weekday morning. Send tips, suggestions and complaints to the editor:
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