Instead of deploying their cash in ways that innovate and benefit companies’ long-term future, many business leaders, including those from DuPont, Apple, GM and others, are returning billions of dollars to shareholders, responding not only to the saber rattling of activist investors, but also to the fact that the continuation of rock-bottom interest rates has made it inexpensive to borrow to buy back shares, an action that can, in turn, boost a company’s stock price.
According to Strategas, at 2014 year-end, the dollar volume of stock buybacks had soared by 287% from its low point after the 2008 financial crisis, and the value of mergers and acquisitions was up by 179%.
Why the hesitation to invest in the company’s future growth? “Many appear to have their doubts that ‘slow and steady’” economic recovery in the U.S. will be enough to fuel recovery at the corporate level, regardless of their individual expectations of the economy,” CFO Magazine said about the results from its latest quarterly survey of executives with Duke University.
CFO says that business leaders’ hesitance to invest their cash in prospects for company and economic growth have been “a perfectly rational market response to the sheer weight of the Obama regulatory apparatus that punishes innovation and risk-taking.”
They may be taking their protective stance too far, however. Business leaders need to be careful about undermining traditional investments such as spending on research and development. R&D was flat in 2013, according to Battelle and R&D Magazine.
To help insulate public companies from outside pressures, venture capitalist Marc Andreessen suggested at a recent Fortune magazine conference that startups mimic companies such as Facebook and Google by granting founders special types of stock that give them control over key decisions, the Journal said.
With companies’ appetites for buybacks and mergers, and the U.S. economy seeming to pull in its horns again very recently, CEOs and business owners can be expected to pursue this general course for the foreseeable future.
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
