Restating earnings hurts the company itself, and its peers
When one company restates earnings, best to see what its peers are up to.No company wants to issue an accounting restatement; it’s a guaranteed way for the share price to drop 10 percent, on average. Investors, analysts and journalists alike view restatements as an indication of a problem within the company. As it turns out, restatements indicate that there is value in looking at its industry peer firms. More…
It’s the wave of the future: The economy thrives, but the employment rate doesn’t
Recovering from a recession doesn’t include the entire economy.The “jobless recovery” that befuddled observers after the recession in the early 2000s was no fluke. It’s actually a pattern that we can expect to continue thanks to technology’s uneven impact across sectors of the economy. What’s more, this new trend in business cycles is as important in making policy decisions as it is in ensuring the stability of the country’s economy. More…
Options backdating is part of a tradition of boosting executive pay by bending the rules.
Managers can find way to increase their compensation.Now that the U.S. Senate Finance Committee has returned from its summer holiday, members have put the recent spate of backdating stock options at the top of the agenda. Over the summer, several companies have been caught up in the practice, which skims the top off a firm’s profits. According to professors at the Olin School of Business, the backdating of options is just one of the ways to time executive compensation in a way that enable executives to maximize their own pay. More…
Teamwork: Where the weak help the strong
Group work is the name of the game in many companies. The thinking is that workers will learn more and help each other when they are put into groups composed of people with a variety of expertise. But does this always happen? Some recent research suggests that it may not … at least not always.
Shareholders lose when companies are sued for inflated stock prices
When investors buy stock at inflated prices, they have a right to sue the company for any losses. Unfortunately, securities litigation isn’t paying off for shareholders – even when they win. Instead, large institutional investors and lawyers rake in the money and existing shareholders end up losing out.
Suspending federal gas tax is bad idea, even if oil companies pass savings to consumer, economist suggests
Gas tax relief?With voters clamoring for relief from skyrocketing prices at the gas pump, politicians are floating a wide range of quick-fix solutions, many of which could cause more problems than they solve, suggests Paul Rothstein, a specialist in the economics of public spending at Washington University in St. Louis. More…
Low price doesn’t always mean low quality, but it could mean a challenge to high-end products
Low quality threatens the high end.What company wouldn’t attribute its profits to the quality product it produces? The answer might be: the company that competes on price. According to research from Washington University in St. Louis, producers of lower quality products actually have better prospects for gaining market share and improving their bottom line. The findings indicate the Chinese manufacturers could easily gain an edge over American producers. More…
Baby boomers’ retirement could threaten Wall Street
It’s not just social security and health-care that could be adversely affected when the baby boomers leave the workforce; the stock market could go into shock as well. According to research at the Olin School of Business at Washington University in St. Louis, when people retire, they tend not invest as much they did in their younger years. With the boomer generation starting to pull out of the workforce, Wall Street is bound to feel the blow. More…
Round tables address IT problems, infrastructure, workplace concerns over flu pandemic
Temperature is rising as St. Louis tackles the ramifications of a flu epidemic.St. Louis is one of the few cities trying to stay ahead of the pandemic curve, thanks to workshops being conducted this spring and summer that bring together area institutions and businesses in round table formats. The Business Community and Pandemic Flu Roundtable is sponsored by the Washington University School of Engineering and Applied Science’s Center for the Application of Information Technology (CAIT) and the University’s School of Medicine. CAIT is St. Louis’ center for IT training, professional development, and executive interaction for more than 25 years. More than 100 business and institutional attendees are learning to address everything from potential vaccines and medications to sick leave policy and protective gear. More…
Challenges for dollar, euro in global economy is focus of St. Louis conference, May 25
What challenges does globalization present for industrialized economies, such as the United States and the European Union? How will fluctuations in dollar and euro exchange rates affect economic growth, inflation and interest rates? Will globalization influence the role of the dollar and the euro in international financial systems? These are a few of the questions to be explored May 25 as high-ranking international finance policymakers from the European Union and the United States join scholars for a conference on “The Euro and the Dollar in a Globalized Economy” at Washington University in St. Louis.
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