China-U.S. audit truce wisely avoids big issues
By John Foley
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Deng Xiaoping used to say that ideological disputes were best left for future generations to solve. Audit authorities in China and the United States are wisely following the former Chinese leader’s advice. Their compromise on inspecting the audits of Chinese companies listed overseas, a non-binding memorandum announced on May 24, leaves the biggest questions unanswered. That’s exactly as it should be.
Bank governance stigma can be fixed lickety-split
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
It’s time to escalate the kerfuffle over corporate governance at U.S. financial institutions. Jamie Dimon fought aggressively to retain both the chief executive and chairman roles at JPMorgan, in large part because a shareholder vote to separate them could have been seen as a demotion. After all, if peers like Lloyd Blankfein at Goldman Sachs hold the two top jobs, others who are just CEOs might be left feeling like second-class citizens of sorts. Regulators should turn the division of labor into a virtue.
Goldman trumps HSBC in financial Chinese chequers
By John Foley
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Who’s the smarter investor in China – HSBC or Goldman Sachs? The UK lender’s business in China has grown impressively. But based on their recent sale of stakes in two of China’s biggest financial groups, the Wall Street investment bank has the edge.
Apple tax fight needs global response
By Edward Hadas
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
In 1961, the six-year-old Steve Jobs probably didn’t notice U.S. President John Kennedy’s criticism of American companies’ use of foreign tax shelters. Corporate taxation had slid down the public agenda by the time the founder of Apple was achieving success, and it stayed that way for the rest of his life. But now it’s back, and Tim Cook, Jobs’ successor as Apple chief executive, has a public relations problem.
A reasonable global rate for corporation taxes is a utopian dream. There will always be jurisdictions which do not need to raise as much tax revenue as others, or simply choose to attract commerce with appealingly low rates. As sovereign nations, it’s their right to set their own fiscal agendas, and who’s going to make them do otherwise? I’m an advocate of increasing tax on spending, and reducing tax on earnings, whether personal or corporate.
If every company and individual in the major developed economies paid a flat 10% on earnings, there’d be little incentive for avoidance. If sales tax were a flat 25%, that’d still be fair as we could effectively choose what we bought and therefore how much tax we paid.
It’s unnecessarily high direct taxation, not the inevitable attempts at avoidance which should be under scrutiny.
Dimon has little to lose in shareholder vote
By Antony Currie
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Jamie Dimon has little to lose if JPMorgan’s shareholders choose to split the chairman and chief executive roles at Tuesday’s annual meeting. Quitting, a response that has been hinted at by the board in recent weeks, would be a rather childish move. There are better options for all concerned.
Marissa Mayer puts exclamation point back in Yahoo
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Marissa Mayer has made her mark on Yahoo in less than a year. The website chief’s $1.1 billion deal to buy blogging site Tumblr on Monday goes a long way to restoring the faded and vainglorious exclamation point to the company’s name.
FirstGroup cash call shows deleveraging imperative
By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
It’s shaping up to be the year of the rights issue in Europe. FirstGroup’s 615 million pound ($1 billion) cash call suggests companies are biting the bullet and exploiting the rise in equity markets to repair their balance sheets. The jumbo issue from the UK rail and bus operator comes after similar fundraisings from the likes of Commerzbank, Dutch cable company KPN and travel operator Thomas Cook. Other distressed companies should look to delever while they can.
Wells Fargo boss takes turn on soapbox
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
John Stumpf may be easing his way onto the soapbox. The Wells Fargo chief executive runs the biggest U.S. bank by market value, at $210 billion, but has kept a lower profile than many of his peers. Lately, though, he has been critiquing regulation more, tiptoeing into a role filled until recently by JPMorgan boss Jamie Dimon.
Glencore should just name Ivan Glasenberg chairman
By Kevin Allison
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
John Bond’s ouster is an opportunity for Glencore Xstrata to make a fresh start in the boardroom. Best practice would dictate that the departing chairman’s permanent replacement be a strong outsider. That precludes tapping Ivan Glasenberg, the newly-merged miner’s CEO and its biggest shareholder. However, a dual mandate might better reflect corporate reality.
Speech-tech firm’s M&A machine could go in reverse
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Over the past decade, Nuance Communications has been on a frenetic shopping spree. The $6 billion firm now encompasses businesses ranging from medical transcription to powering Siri on the iPhone. But Nuance, the M&A machine, is sputtering. Margins are falling, the stock hasn’t advanced in five years, and debt is accumulating. Moreover, Carl Icahn recently upped his stake in the company from 9 percent to 11 percent in what could signal an end to acquisitions – even the start of a breakup.
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