The Deloitte CFO Signals survey also revealed the following results (estimates are adjusted averages to reduce the effect of outliers):
-- Concern remains over public policy. Government spending and budget policy is again named by CFOs as the top impediment to growth, with 30 percent of CFOs listing this in their top three impediments. The healthcare and pharmaceutical sectors are particularly concerned about this.-- International taxes a perceived threat. Two-thirds of CFOs are concerned that foreign governments will step up efforts to tax profits of companies from outside their borders, with manufacturers particularly concerned. The same proportion of CFOs is concerned about the prospect of paying taxes on repatriated cash. The risk of governments more aggressively pursuing taxes on income from IP and intangibles is a concern for just over half of CFOs.-- Environmental regulation concerns increase markedly. The percentage of CFOs citing environmental regulation as a top impediment to growth rose sharply from 16 percent to 27 percent in the second quarter. CFOs in the energy and resources sector were the main reason for this, with 82 percent of this group citing this concern.-- Changes to risk management approach. In light of conditions over the past five years, CFOs confirmed their companies have taken strong steps to improve risk awareness and plan for risk events. Nearly 80 percent of companies have raised the visibility of risk within their boards and executive teams, while more than 70 percent have improved their ability to assess the probability and impact of risks.-- U.S. equity valuations are too high. Nearly 60 per cent of CFOs think U.S. equities are overvalued while only four per cent think they are undervalued. But when it comes to their own company's stock, about 39 per cent of CFOs thought their share price was too low versus 11 per cent who think it is too high.-- CFOs may have a pay-driven incentive to buy back shares. CFO compensation increasingly reflects their broadening responsibility, with salaries impacted mostly by summary measures that reflect companies' income statement, balance sheet and equity markets performance. Profitability is still the dominant driver of CFOs' incentive-driven pay, followed by economic results, but earnings per share and share price were cited by nearly two-thirds of public company CFOs as having a moderate to strong influence. This could give CFOs a personal incentive to pursue share buyback.
To download a copy of the survey, please visit: http://www.deloitte.com/view/en_US/us/Services/additional-services/chief-financial-officer/cfo-signals/e91c6196ae75f310VgnVCM3000003456f70aRCRD.htm?id=ca:sm:pr:signals:eng:cfo:062613:1
The Deloitte CFO Signals survey was conducted for the second quarter of 2013. Eighty per cent of the 105 CFO respondents were from companies with more than $1 billion in annual revenues, and 70 per cent were from publicly traded companies. There were 19 Canadian CFOs who took part, representing about 17% of the CFOs surveyed.
Each quarter, CFO Signals tracks the thinking and actions of CFOs representing many of North America's largest and most influential companies. This report summarizes CFOs' opinions in five areas: business environment, company priorities, company expectations, finance priorities and CFOs' personal priorities. For more information about Deloitte's CFO Signals, or to participate in the survey, please contact firstname.lastname@example.org.
About Deloitte's CFO Center
Deloitte's CFO Center harnesses the breadth of Deloitte's capabilities to deliver forward-thinking perspectives and fresh insights to help CFOs manage the complexities of their role, drive more value in their organization, and adapt to the changing strategic shifts in the market. For more information about Deloitte's CFO Center, please contact email@example.com or visit www.deloitte.com/us/cfocenter
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