All posts by Michelle Grathers

About Michelle Grathers

Michelle Grathers is an international tax expert. She has consulted for a variety of firms and high net worth individuals on all tax- and legal-related issues. She also helps new companies develop payroll services, statutory audits and mergers and acquisitions. Contact Michelle at michelle[at]businessdistrict.com

The Best Companies Develop The Best Leaders

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One of the features that separate the best companies from rest is how well the company nurtures its future leaders. Fortune Magazine compiled a list of 25 companies that excel in developing leadership talent.

One of the interesting things is that mangers in different countries require country specific talents.  For example, Indian companies stress taking a leadership role in society so their companies allocate significant funds to community work. In China, leadership requires building relationships with national and local government officials.  In Brazil, managers need to be able to deal with a quickly and frequently changing economic and regulatory environment.

One of the techniques that Proctor & Gamble has used in the past is to have the product manager chooses his or her successor. This builds a special mentoring relationship which helps develop leadership skills.

Another technique that is used by many companies is to give a manager different assignments in varying countries. This forces the leader to develop flexibility of attitudes and tolerance of other people with entirely different values. It forces the manager to examine his values and learn to work with and respect himself and others in spite of their cultural backgrounds.

Experience shows that these leadership training programs work and benefit both the manager and the company.

Corporations Often Pay No Federal Taxes, WSJ Finds

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There is a special structure built into the way companies pay taxes that allows the companies to avoid paying even one dollar in federal taxes, which a growing number of companies are taking advantage of, according to a report in Tuesday’s Wall Street Journal.

Passing the Profits Through

The companies are called “pass-throughs,” because the companies pass their profits along to their investors, who then pay the taxes. These companies have discovered that it is more cost effective to pass their profits onto their investors and avoid paying taxes rather than hiring an army of accountants to help them take advantage of tax loopholes.

Legal and Encouraged

According to the article in the WSJ pass-throughs have existed for decades, are perfectly legal, and are even encouraged by Congress and state governments. The goal of the pass-through option is to stimulate entrepreneurship.

The Journal reported that 69% of US corporations were organized as non-taxable businesses in 2008. In 1986 only 24% of corporations were organized this way. Because partnerships and sole proprietors were not included in the figures, the percentage of these corporations is actually higher.

More than Anywhere Else

It is common for large companies to be structured this way. An estimated 60% of all US businesses with at least $1 million in profits are pass-throughs, the largest percentage in the developed world.

This fact is a major reason that federal corporate tax collections comprised only 1.3% of the US GDP in 2010 despite the fact that the corporate tax rate in the US is 35%; that figure is down from 2.7% in 2006, and indication that a growing number of companies are taking advantage of this peculiarity of corporate taxation.

Dog Days for Kardashian

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Which would you pick?

It was a hard decision for the ad men at Skechers, but after much thoughtful deliberation they decided to pick a French bulldog to don the brand’s GORun shoes during this year’s Super Bowl game over the infamous star of her very own reality television series, Kim Kardashian.

Last year Kardashian featured prominently in the Skechers Super Bowl ad for their Shape-Up shoes in what was a bit of a hot advertisement for Super Bowl fans.  But Leonard Armato, the president of Skechers Fitness said that the choice of dog over woman has nothing to do with any backlash caused by last year’s commercial or her quickie marriage/divorce of recent days. Armato explained the choice of dog over Kardashian as follows: “Kim got us more attention than we ever dreamed. We have to establish Skechers as more than a lifestyle company.”

Armato went on to explain that although Kardashian’s contract with Skechers ended as of December 2011, she had a huge influence on the popularity of the brand. Armato believes that Kardashian’s presence in the commercial last year could be responsible for as much as a 400% increase in the number of fans on the Skechers Facebook page after the Super Bowl.

Nestea to Be Phased Out in US Market

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A joint statement issued by Coca-Cola Company and Nestlé announced that they will be

Nestea Iced Tea

refocusing their efforts selling their soft drink known as Nestea, which is now sold as a partnership between the two companies.

By the end of the year 2012, the statement said, the emphasis of their joint venture Beverage Partners Worldwide (BPW) will be in Europe and Canada, where they hope to sell more of their ready-to-drink tea.

Coca-Cola, based in Atlanta, will sign an agreement with Nestlé for the rights to market the Nestea brand in Taiwan and Hong Kong. Everywhere else the BPW Company will be shut-down.

“Both partners believe a concentrated focus on Europe and Canada will accelerate the growth and bolster the market presence of BPW where the joint venture is most effective,” read the statement.

Qualcomm Sells Communication Licenses To AT&T

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Qualcomm Inc. (Qcom) has received permission from the Federal Communications Commission (FCC) to sell its Lower 700 MHz D and E Block (Channels 55 and 56) unpaired spectrum licenses to AT&T. In return, Qualcomm will receive $1.925 billion. This deal will effectively enable AT&T to reach another 28 million customers. It will also help AT&T to develop their long term 4G network plans.

Qualcomm Inc. designs, develops, produces, and sells digital communications services and products. The company has four major divisions. Among many other services the Qualcom provides communication services to the United States Government. It also provides 2-way terrestrial based and satellite based location reporting services for logistics and transportation companies. The company holds many licenses for technology. It often rents the technology under these licenses. It is some of these licenses that AT&T purchased for the 1.925 billion dollars.

Some of the Qualcomm managers are Dr. Craig H. Barratt, Rob Chandhok, Matt Grob, Rich Sulpizio, Norm Fjeldheim, Kimberly M. Koro, William F. Davidson Jr., and Margaret L. “Peggy” Johnson

Disclaimer: The information in this article is insufficient to base investment decisions on. All decisions should be based on a thorough analysis of the investment.